U.S. Cities Fight to Win Back Tourists

Skift Asia Editor Peden Doma Bhutia interviews Global Tourism Reporter Dawit Habtemariam about the series of articles he’s written recently for Skift.com that detail the plight of U.S. cities, how they are coping, and what they are doing to encourage both domestic and international tourists to return in the wake of the pandemic.

You can find all of the articles referenced in this episode, as well as Dawit’s continued reporting on the subject at Skift’s tourism hub.

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Bhutia: I wanted to ask you about the articles you’ve written recently on Skift. They are strung together by one common theme, and that’s the plight of U.S. cities, how they’re coping and how this trend is kind of slowing the overall pandemic recovery. Now what happens in the U…S market is of immense interest to us in Asia, and specifically, like I said, in India, where I live, as India has become the U.S.’s second largest international source market behind I think UK in me, according to according to the US National Travel and Tourism Office.

But then, of course there’s this “small” visa processing time that Indians are experiencing for U.S. visas. And we recently also carried news that top U.S. lawmakers have been urging the Biden administration to address the visa wait time issue in India on a priority basis. Could you talk about the articles that you have been working on lately?

Habtemariam: I’ve covered a particularly good amount of major cities in the U.S. that are very popular. Essentially what happened with the pandemic is cities were hit with huge COVID 19 cases. People left to work from home. They left their downtown offices. Tourism numbers dropped. Fast forward, we’re here at this point. The downtown workers have not returned to their offices.

Those people have been slow to come back. And that has somewhat hurt the city economically in many ways, whether it’s, you know, just tax dollars to support the city business for the city, whether that’s spending on local businesses, for example, like New York City.

But it’s missing the amount of of the office workers who spent a lot of money and who spend a lot of time going to Broadway shows after work. So cities are losing a lot of money and at the same time, I guess to go back again during the pandemic period of 2020 to 2022, you know, there was all this unrest happening in cities with a spike in public safety issues.

Those images are still stuck in the minds of a lot of people who are not commuting back into the downtown and largely a lot of the suburban people. So what’s going on is a lot of cities are just losing a lot of money that should go into supporting the tourist infrastructure that really makes cities so great for tourism as well as not having a strong morale among the locals or the suburbanites who live outside the city.

Bhutia: If I have to go article by article, the first article that I want to discuss is the one which is titled New York City’s Post-Pandemic Tourism Recovery Must Face Long-Term Challenges. In it, you’ve made several data points that that would seem as positive indicators of tourism, that the city was at 85% of pre-pandemic volume last year and expect it to make a full recovery probably by next year.

And the tourism workforce is also at 85% of pre-pandemic levels. So what are the long-term challenges that you your title is hinting at and what strategies have been implemented to revitalize New York tourism sector? And talk a little bit about how it’s performing in comparison to other cities.

Habtemariam: Yeah, So New York City, you know, they’re recovering faster than a lot of other large cities in America, faster than San Francisco, Seattle, Portland. They are very fine. They’ll be back to their full pandemic level next year, right? And a big part of that is, you know, European tourists. The big problem, though, is that the underpinning stuff that supports New York City that makes it so great for tourists is having is losing a lot of, I would say, structural things.

One big thing is the downtown areas, right? They are not back at their pre-pandemic level. People are working remotely. People used to commute in the city, are still working in their suburbs, basically from Westchester to downtown to work, you know, in jobs like finance, real estate, office jobs. So people spent a lot of money.

You know, I think Bloomberg said that about $12 billion is being lost in workers spending because workers spent money on entertainment, food. We spent time in the city. Right. And they’re not there as much as they used to be. And that’s causing a problem. That city needs that money to support infrastructure like trains, maintenance, as well as pay police officers services is all that depends on worker spending.

So that’s going to hurt long term wise. That may hurt the city’s ability to just make it a great tourist destination down the road. Another big part is that there’s a perception, you know, that the city’s not safe, as it used to be among suburbanites. Right. They’re getting a lot of the local news. They saw a lot of news during the pandemic of somewhat unrest.

And they see videos repeatedly, imagery of like crime, you know, and that’s somewhat scaring them from coming back a little bit. That image is still lingering in the public mind and in their minds. Not so much internationally, but domestically. It’s still somewhat there. Other things I mentioned was about the local morale. Right. So a lot of locals that feel this is going in a negative direction.

And the two big things were affordability and public safety. I think it was 70% of them said they were. They felt negative about it. And a lot of that is due to them seeing a lot of crime on the news or maybe near them or seeing homelessness and whatnot. And that and that’s not good for city morale because you want your locals to promote your destination.

You want them to tell people they do great city to come in, come visit it, come enjoy it. You want your locals to help sell your city? They are somewhat they are ambassadors to your destination. So yeah, these are definitely problems that he is trying to deal with. They’ve had campaigns, for example. They had a funny, I guess now I’d say funny, but a very creative one that played off “I Love New York,” the very famous slogan, very famous image that we all know of with the I Heart and why they’re trying to tell people to say, you know, we love New York City is what they played off there. And it was meant to just inspire civic pride and get people to feel happy, excited about their city again.

Bhutia: Are you saying that a lot of the safety is to do with news items or do you think that, you know, the tourism administration and the New York administration should be doing something to kind of instill confidence among people seeing that the city is safe enough? And, of course, “I Love New York” is a great term.

It’s been there for quite some time. And even Philippines, you know, recently, after 11 years, they decided to revamp the tourism campaign. It’s more fun in the Philippines has now become “Love the Philippines.” I think the love factor is very big when it comes to tourism campaigns. So would you also talk a little bit about the safety thing?

Habtemariam: When I talked to New York with a tour guides or tourism officials or whatnot, the concerns about safety are mostly a domestic thing, right. I mean, they would argue is overblown, a misperception. I’ve heard people say – not from the tourism officials of New York – but just in general from other cities, that there’s this keyboard warrior thing where people who’ve not been the city we’ll talk bad about go find a video or a news story and just promote it and push it on on large Twitter accounts.

Large social media or news outlets will focus on it. But the reality is that city is actually it’s pretty much a safe place to be. But that image is just still stuck in people’s minds. Right. And people are still thinking about what happened a few years ago. So the point is when people come here, they’re surprised how the city was safe.

The issue is you got to get them to come here and see it for themselves and not believe what they’re being told by outsiders who don’t really have not been here or don’t know it or who were who have not been here since the pandemic. So that that’s been the the big drive when it comes to the safety problem is to remind people just come and see it for yourself.

Bhutia: Yeah, that’s an interesting point. In the next article that I wanted to discuss with you and that I found this really interesting, especially for, you know, for a company like us, which is completely remote, about the fact that major cities are valuing tourism more as office vacancies remain high. So obviously, this real estate crisis represents an issue. But your article, you know, in the article you seemed to say that this might actually represent an opportunity for the tourism industry.

You’re saying the tourists are making up for some of the work spending gaps. So, you know, how are cities adapting to the changing dynamics of remote work and the resulting vacancy rates and offices? And what are the strategies that they’re employing to attract tourists and of course, fill the spending gap left by workers?

Habtemariam: Yeah. So what’s interesting, you know, as downtown areas, right. They they were usually the prime location for business activity, for tourists, for everything. Right. So what’s going on, for example, in New York City? Right. A lot of the tourist spending is making up for the loss of worker spending that I mentioned earlier. Office workers who aren’t coming into town to spend as much on food, restaurants and entertainment that’s being made up by tourists right there, sort of closing that gap for sure.

Right. I mean, it’s not the gap. They’re filling the gap, but there’s still a gap there. Right. But another interesting part also is that a lot of these office workers, the ones who live actually in major cities like San Francisco, you know, New York, Chicago, they are staying in their neighborhoods to work remotely, but they are spending their time and money in their local neighborhood more than they did before.

Right. So if you if you’re used to do 9 to 5, you know, say in downtown, now you’re doing it in your neighborhood. So what’s happening is you’re spending your time and money on local businesses, at coffee shops, doing other activities, you know, that you would not have done if you were at your office. So what’s going on is that it’s encouraging more business investment businesses to open up.

They they’re making more money. They’re coming up with new ideas to service these new at home workers. Right. So these become somewhat more lively neighborhoods. They get more energy, more people hanging around shopping, doing activities. And that looks very good for for tourism. You know, one, you get new hidden gems, new assets to promote, and you also get new services and you also get that energy that people want to see when they’re tourist.

When you’re tourist, you want to see a lively atmosphere. So these are opportunities for for cities to promote. They can say, hey, you know, our downtown businesses, some of them are closing down. They aren’t where they used to be. But you can hang out in our neighborhoods that are hidden gems, right. That that are not the local tourist attraction that everyone knows of, but they have fun things you’ve never done before.

For example, San Francisco’s downtown has had a rough time with, you know, the hotel closures and the businesses leaving. But they’ve had neighborhoods like it was like North Beach that are opening up, you know, nice Italian restaurants, new activities. So these are new new tourism assets. And so I was saying that these are places that you can promote and push toward tourists to see to help not only support your city, but also make your destination even more diversified of what it can offer.