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Laguna Beach

 Volume 12, Issue 25  |  March 27, 2020


The impact of the COVID-19 health crisis on the hospitality industry in Laguna Beach

By DIANNE RUSSELL

The American Hotel and Lodging Association (AHLA) reports that 4,000,000 have already lost their jobs in the hospitality industry since the coronavirus health crisis began. The association also said that the economic impact on the hotel industry is already more severe than the 9/11 and 2008 recessions combined. 

Chip Rogers, AHLA president and CEO, said the burgeoning COVID-19 health crisis is unprecedented in its size and scope, and it represents the single largest decline in travel in modern times.

Local effects

Two leaders in the hospitality industry here in Laguna explain how this is affecting the hospitality industry in Laguna Beach, what short and long-term results we will experience, and the challenges facing us in the future.

Ashley Johnson, CDME, President & CEO of Visit Laguna Beach®, says, 

“Initially we planned to utilize the post-recovery methods instituted for 9/11 and SARS, but this is worse than both of those events. The community hotels that remain open are in the single digits for occupancy and, of course, that will affect city revenue. We are doing everything possible to be a resource for local hotels and partner with them to come in strong for post-recovery. We are working to build up Laguna Beach again as a destination (within a 300-mile drive), and a major focus is to make it outshine other destinations, in order to get immediate visitors here. We have in mind to create packages; price is not a factor. We want to let our community and consumers know that once we get past this, we will welcome them back with open arms.”

Hotel closures 

The following hotels have closed: 

--Casa Laguna: closed until April 1, 2020

--Hotel Joaquin: closed until further notice

--La Casa Del Camino: closed through mid-April

--The Ranch at Laguna Beach: closed until further notice

--Surf & Sand Resort: closed until further notice.

Johnson says, “We have developed a Health Advisory page (click here for the button on our homepage) on our website that is updated in real time as we receive any new information and/or breaking news.

They are also sharing daily “Moments of Zen” on their social media pages to bring some sense of positivity into other’s lives.

 “Our Visitors Center has closed, indefinitely, as the health and safety of our employees, as well as the public, remains first and foremost,” says Johnson. “If anyone from the public needs anything, they can continue to reach us on our @VisitLaguna social channels, via phone at (949) 497-9229, or via our individual emails. 

The impact Ashley

Click on photo for a larger image

Photo by Mary Hurlbut

Visit Laguna Beach® Team

Circumstances constantly changing

Johnson says, “A lot seems to be changing every minute, so we will continue to be nimble in our efforts. We are a resilient industry, and this difficult cycle will come to a close. Education and preparation are key to the safety and security of public health during this outbreak. Our partnership is key to Laguna Beach’s ability to be positioned for renewed growth come the recovery period. I believe the COVID-19 situation is going to underscore the importance of tourism to Laguna Beach as our community relies so heavily on the revenues generated by the hospitality industry.”

Landscape of Laguna will change forever

General Manager of The Ranch at Laguna Beach Kurt Bjorkman feels that the community needs to be aware of the massive financial impact this has had on the hospitality industry in Laguna Beach (and every city for that matter). He says, “Hundreds (near a thousand) people have lost their jobs overnight (including Monarch Laguna Beach). TOT taxes are going to be basically non-existent for the next quarter, and that will have an impact on the cities’ budget and resources. This is going to change the landscape of Laguna Beach forever – not everyone will weather this storm. I have seen a lot of stories in other publications about how hotels and restaurants are helping others, giving away food to pantries, cheap take-out and delivery for locals, etc. 

“But what needs to be also told is the story of all the newly unemployed, the small business that will probably have to close for good, and how they are trying to navigate through this moment by moment situation we find ourselves in – with nobody really to blame.”

On a recent video message, Arne Sorensen, the CEO of Marriott said that the impact so far for their hotels has been worse than 9/11 and 2008 combined. Click here to watch. 

Global reports

In an open letter from Gloria Guevara, president/CEO of the World Travel & Tourism Council (WTTC), the association reiterated that the global travel and tourism industry is in a fight for survival with an estimated 50 million jobs globally at risk due to the pandemic.

 “Travel is the backbone of economies around the world. It brings in essential currency and inward investment, creates jobs, and stimulates every sector. WTTC figures show travel and tourism contributes to 10.4 percent of global [gross domestic product] and 320 million jobs. It is responsible of creating one in five new jobs and, for eight successive years, has outpaced the growth of the global economy,” the association noted.

  Bjorkman says, “Our Ranch Laguna Beach team members, having just learned that their jobs are on hold for a while (almost 200 full and part-time team members), are trying to figure out what to do – the only resource we really have for them is to give them information from the EDD on unemployment benefits. We are maintaining their health benefits for as long as we can. As we learn more about newly launched assistance programs we will communicate that to them immediately.” 

The impact ranch

Click on photo for a larger image

Submitted photo

The Ranch at Laguna Beach 

Bjorkman emphasizes that the effects are far-reaching. “Not only is our resort, team members, and owners suffering – but our suppliers, many of them local fishermen, farmers, artisanal cheese makers, etc. have seen an abrupt halt in orders.” 

 Some numbers from Visitors Laguna Beach (of which Bjorkman is a board member) 2019 report:

 --Visitors spend on average $1,524,932 a day in Laguna ($556,600,000 annually) 

--Hotel guests spend $234.54 a day in Laguna Beach, not including the hotel stay costs 

--The visitor economy in LB generated 17.8 million in local tax revenues 

--Tourism supports 5,002 jobs in Laguna

He says, “That is all going to be gone for the foreseeable short-term (hopefully) future. Everyone is suffering and it’s nobody’s fault. But in these circumstances, the only way any of us are going to make it through is with help from our local, state, and federal government. It starts local – our city should be leading the charge on helping the local small business with relief – many small businesses would benefit from local sales tax deferments, hotels will need relief of TOT payments due in April (the same month property taxes are due). Our state representatives, like local Harley Rouda, joined members of the Orange County congressional caucus Friday to ask the Orange County Board of Supervisors to push the deadline for property taxes to July 1 to address financial fallout from the coronavirus.

“I cannot speak for anyone else in town – but I do know that most hotels are planning on closing and that those who stay open will have to lower prices to levels that will be difficult to rebuild from.”

Industry faced with moment-to-moment decisions 

On Saturday, Bjorkman said, “Aliso Beach is packed. The parking lot is completely full, and the beach looks like a typical spring break – as though nothing is wrong. We closed Lost Pier Café in an effort to discourage this, but we do know that if we were open (and technically it is a take-out restaurant – even liquor is OK to be take-out right now under revised ABC guidelines!) – we could benefit financially. But we won’t in an effort to discourage large crowds gathering. These are the quite literally moment-to-moment decisions all of us in this industry are faced with. 

“Many of our favorite LB hotels and restaurants are going to be gone forever – and if they do manage to re-open, many of the amazing employees with hearts full of hospitality will have had to move on – it will be strange days ahead.”

 

Shaena Stabler is the Owner, Publisher & Editor.

Dianne Russell is our Associate Editor & Writer.

Michael Sterling is our Webmaster & Designer.

Mary Hurlbut is our Chief Photographer.

Alexis Amaradio, Barbara Diamond, Dennis McTighe, Diane Armitage, Lynette Brasfield, Marrie Stone, Maggi Henrikson, Samantha Washer, and Suzie Harrison are our writers and/or columnists. Scott Brashier is our photographer.

Stacia Stabler is our Social Media Manager & Writer.

We all love Laguna and we love what we do.

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