A ‘Normal’ Summer? Traverse City’s full slate of events begs a few questions

A “normal” summer.

It’s a prospect that local residents, businesses, event organizers, and tourism professionals have been hoping for since COVID-19 first waylaid Traverse City’s economy in 2020. 2022 may just be the year where “normal” and “summer” coalesce once more.

But after two years of safety protocols, depressed travel patterns, down revenues and misplaced optimism, does a 2010s kind of “normal” even still exist for Traverse City? And if so, will it be as easy to revert to as everyone hopes? Below, the TBCN explores the hopes and dreams of summer 2022.

How much ground is left to make up? A year ago,  the TCBN mused over whether the summer of 2021 might just prove to be the biggest tourism season in Traverse City’s history. At the time, there was reason to be optimistic. Vaccination rates were soaring, and a true light at the end of the tunnel seemed to be in sight for the pandemic. A red-hot spring tourism season – thanks to a historically early post-winter warmup – and the return of key events like the National Cherry Festival and the Ironman triathlon also seemed to point toward a return to normal. Those factors, combined with huge levels of pent-up demand, made the sky the limit on what summer 2021 could be.

The reality of last summer was a little less rosy than the expectations. The arrival of the delta variant in the second half of the summer put an end to any “pandemic is over” talk. The Cherry Festival only came back at partial strength (sans key staples like the Cherry Royale Parade and the air show), while other top tourism events – such as the Bayshore Marathon and the Traverse City Film Festival – took a second consecutive year off. And while heavy traffic and perennially gridlocked streets had some local residents proclaiming 2019 the busiest summer ever, the actual numbers seemed to tell a different story.

“Last year was a decent year,” said Trevor Tkach, president and CEO of Traverse City Tourism. “We did not get back to 2019 level occupancy levels for the hotels in Grand Traverse County. But it was definitely much better than then 2020. We were off by more than 25% (in 2020). Overall occupancy for last year was still down 9.1% compared to 2019.”

Those figures are for the entire year, not just summer, but the takeaway is the same: Traverse City’s tourism sector still hasn’t fully recovered to its pre-pandemic levels. Tkach expects that occupancy numbers and overall tourism activity will continue to rebound this year, but he’s hesitant to predict a full rejuvenation just yet.

“Interest is still there, and people have become more comfortable traveling again, so (a busier season) is inevitable,” Tkach said.

Other variables – such as gas prices, inflation and a workforce shortage – are limiting Traverse City’s rebound, he said.

“I think there are a lot of things that could work against the travel and leisure industry as we roll into the summer months,” he said. “So, it’s hard to totally anticipate what will happen this summer.”

While those obstacles could indeed get in the way of Traverse City making up the 10%-or-so gap it still needs to clear in order to get back to 2019 tourism numbers, there are big positive notes, too. The biggest one? The full return of Traverse City’s festival and event slate.

Where last summer only had a partial lineup of events, this summer’s calendar looks a lot more normal. The Bayshore Marathon marked a grand return – for its 40th anniversary no less – by drawing more than 8,000 runners on Memorial Day weekend.

Interlochen Arts Center is back to a full concert schedule this summer after a truncated August-and-September slate last year. The Traverse City Film Festival is scheduled for July 26-31. And according to Cherry Festival Executive Director Kat Paye, Traverse City’s flagship festival will restore all of its biggest traditions this July, including an air show featuring the Blue Angels, a big parade on Front Street and concerts at the Open Space.

How will travel challenges impact tourism? As Tkach noted above, one of the big questions about summer tourism this year – not just in and around northern Michigan, but everywhere – is the price of gas. Nationwide, gas prices averaged $4.17 per gallon nationwide in April – more than a dollar per gallon higher than the $3.06 that was last summer’s average. The U.S. Energy Information Administration is predicting that regular-grade gasoline prices will drop a bit this summer, averaging $3.84 for the season. But even that price is significantly higher than what travelers saw a year ago, and it would still be the highest summer average for gas prices since 2014.

It’s not just gas prices: The United States air travel market also has yet to adjust fully to a post-pandemic ecosystem. Early on in COVID, airlines incentivized many aging pilots to take early retirements as an aggressive cost-cutting measure. But air travel bounced back faster than airlines had planned for, leaving every airline short on pilots. According to CNBC, major U.S. airlines are scrambling to hire more than 12,000 pilots this year alone.

Crew shortages are also a problem. The airline JetBlue announced in mid-May that it was looking at trimming its summer flight schedules by 8-10%, thanks in large part to a lack of people to crew the number of flights on the docket. In a statement, JetBlue reports it has hired more than 3,000 crew members already this year but still hasn’t been able to catch up with heavy demand.

These factors, collectively, could make 2022 a summer of endless flight cancellations and delays for American travelers – a factor that could discourage travel or make it more challenging for travelers to make it to Traverse City on time for pre-scheduled events and festivals. Per flight tracking site FlightAware, there were nearly 6,000 flight delays “within, into, or out of” the U.S. on May 16, and more than 1,000 flight cancellations.

When asked how Cherry Capital Airport (TVC) is holding up amidst these industry-wide growing pains, CEO Kevin Klein said the airport is taking the bad with the good.

“There’s a lot of good news, and there are a lot of challenges,” Klein said. “The good news is all the cities that we had last summer will return for this summer.”

Klein said all the different nonstop routes will be back, but with alterations in schedule, such as the nonstop Atlanta, Georgia and Charlotte, North Carolina flights, now scheduled to be on weekends only instead of daily.

Positive changes are on the horizon, Klein said, with the Denver flight moving from once daily service to twice a day. The United Airlines’ Chicago route has increased the number of seats in the morning.

“In past years, we only had 50-seat regional jets flying that route; now, they’re flying a 737-900 with 176 seats,” he said. “So we’re seeing a lot of challenges be offset – whether it’s with larger aircraft or different time.”

Ultimately, Klein expects that TVC’s overall capacity for June and August “will be very similar to the number of passengers flown through last year” – a positive hold, given that 2022 was a record year for TVC.

“July, our capacity will be a little reduced, compared to the number of passengers last year,” Klein added as a caveat. “But all in all, when you look at the first quarter of the year, balancing out some of the summer numbers, we’re still trending pretty positive.”

TVC is also underway on multiple projects that could make life easier for travelers, including a parking expansion and a new TSA checkpoint lane. The latter improvement, Klein said, should reduce security wait times from 20-30 minutes to “the 10-20 minute range.”

How hard will staffing issues hit summer tourism? Virtually anywhere you look in the Traverse City business community, you are bound to hear something about staffing shortages. From healthcare to manufacturing to construction, those shortages are having significant impacts on local residents.

But as the city stares down the possibility of a pre-pandemic level of summer tourist traffic, one important question is: Can the region’s labor-strapped businesses withstand the massive crowds of people that a once-typical northern Michigan summer brings?

That question, in particular, is one that is concerning Traverse City Film Festival Founder Michael Moore as he prepares to bring the festival online for the first time since 2019. While talking with Downtown Development Authority CEO Jean Derenzy, Moore said it dawned on him how much downtown Traverse City’s labor struggles might affect the logistics and experience of TCFF for festivalgoers, filmmakers and volunteers alike.

“Jean told me that, at least right now, many of the downtown restaurants don’t open until 5pm because they can’t get the workers,” Moore said. “Well, how do you think the Traverse City Film Festival is going to run? We start showing movies at 9am. There’s not going to be places for breakfast? Or lunch? Clearly, there’s a problem here, and it’s a hurdle that we’ve got to figure out how to get over.”

At the moment, it’s not necessarily that there are no restaurants open for lunch. Rather, it’s that different restaurants are picking their spots and focusing on specific days or times of day, versus trying to tick every box. The result is that the downtown Traverse City restaurant scene is now split more definitively into categories than it was before – a brunch and lunch restaurant here, a cocktail hour and dinner restaurant there.

Dave Denison, owner of the long-running downtown TC establishment Amical, thinks that split might be the new normal for the local restaurant scene – at least until such a time that restaurants like his can find more help.

Once a popular lunch-and-dinner destination, Amical scrapped its brunch and lunch service early in the pandemic and has yet to bring it back. While Denison said that adding lunch back into the rotation is “on the radar” for Amical, he doesn’t see it happening in 2022. Instead, his team is going all-in on dinnertime – a focus he thinks has helped Amical ensure both consistency of service and quality control in a chaotic time.

“We know the summertime is going to be busy, but we’re not thinking ‘Oh, it’s going to be busy, so let’s open for lunch in June,’” Dension said. “Trying to wedge that in, I don’t think that’s a great idea for our brand. We don’t want to just throw more money and time and energy at something that might not work, and screw up what we do at night. We’re really interested in protecting our brand when it comes to the consistency, and the service, and the quality that we’ve been delivering for 27 years. If the biggest complaint is ‘I can’t get a table when I want one,’ versus ‘It took 45 minutes to get my cold food,’ I’ll take the first complaint.”

Denison says he thinks that most restaurants in town have a similar mindset. In other words, if the choice is between excelling with a limited schedule or burning out staff with a busier all-day-every-day approach, the former option is preferable.

“You see this all around town,” Denison continued. “For instance, Towne Plaza has opted for breakfast and lunch, no dinner. Some places have said, ‘Ok, we’re not going to be open Monday and Tuesday,’ or ‘We’re not going to be open Sunday and Monday.’ At Amical, we’re seven nights a week, and we’ve been that way since February 1 of 2021. We have not arbitrarily shut down for a day here or there because of staffing, or sickness, or whatever. We’ve been able to manage that and be consistent, and we’re really proud of that. So we’re open; we’re just not open late, and we’re not open for lunch.”

Will Airbnb’s impact continue to grow? While hotel occupancy in 2020 and 2021 was down from pre-pandemic times, there is one asterisk that is important to point out when considering how big tourism has been for the past two years – and how big it could be this summer. That asterisk is Airbnb, which has only grown in Traverse City since the start of the pandemic.

Per data provided to the TCBN by Airbnb, hosts in Grand Traverse County collectively earned $24 million through the platform last year. For perspective, Airbnb reported at the end of 2018 that hosts in Grand Traverse County had netted some $8 million in short-term rental income that year. In other words, in the span of three years, income from Grand Traverse County Airbnb rentals tripled. By itself, Grand Traverse County accounted for some 9.6% of the more than $250 million that all Michigan Airbnb hosts made in 2021.

According to Haven Thorn, who works in communications and public policy at Airbnb, the pandemic has proven to be huge for short-term rental interest in rural Michigan communities. Since March 2020, 30 cities and towns throughout Michigan have received their first-ever Airbnb guests, all of them rural.

Airbnb tracked about 6,000 hosts in rural Michigan counties in 2021, who collectively earned about $150 million in income. It’s not just Grand Traverse County that have felt the boom, either. Other northern Michigan counties saw big Airbnb host earnings figures in 2021, including Antrim ($8 million), Benzie ($6 million), Charlevoix ($10 million), Emmet ($7 million) and Leelanau ($13 million).

Those dollar numbers likely translate to tens of thousands of guests, but there’s no local mechanism for tracking them in the way that Traverse City Tourism tracks hotel occupancy numbers. So, even if Traverse City were to have its busiest tourism summer ever this summer, it wouldn’t necessarily be easy to quantify.

“We represent some short-term rentals,” Tkach said of Traverse City Tourism. “But in the report that I get from Smith Travel Research (tracking occupancy rates), it doesn’t include short-term rentals. Unless (Smith Travel Research) is sampling from a property manager who’s representing short term rentals, I don’t get that data. So I don’t think (Airbnb) is well-addressed in these numbers that I’ve been sharing.”

Combine the lack of local tracking with the fact that Airbnb mostly reports geographic-driven data after the fact, and it becomes clear that short-term rentals are not just northern Michigan’s asterisk when it comes to assessing any given tourism season, but also the biggest wild card.

Traverse City could break records for summer tourist traffic and even local experts might never know it because so many visitors stay in rentals distributed across hundreds of local neighborhoods. With the local housing market more chaotic than ever before – in terms of inventory, pricing and sheer demand – and with state legislators considering bills that would limit local communities in their ability to regulate short-term rentals, the summer of 2022 could prove to be a crucial season to watch for Airbnb activity in the region.

What impact will COVID-19 have? So far, every point in the pandemic that has spurred hopes for “a return to pre-pandemic normal” has been followed by a reckoning with the cold hard reality of COVID-19 and its continued nagging presence. Per Grand Traverse County Health Department data, the county had tracked about 6,000 total COVID cases as of May 1, 2021. As of mid-May this year, the county’s total cumulative case number is up to 18,000.

Summer 2021 started with optimism about rising vaccination rates and a prevailing feeling that northern Michigan – and the world at large – had seen the worst of the pandemic. If the numbers above show anything, it’s that those proclamations were premature. The question is whether attempts at full “back to normal” behaviors are still premature, or if the story this summer will be different.

Nationally, most health experts say COVID-19 is not yet in the endemic stage. With a virus, endemicity occurs not when the virus disappears, but when enough people have immune protection that transmission rates, hospitalization, and mortality all decrease significantly. An endemic virus is something more like the seasonal flu, with less devastating – and more predictable – impacts on day-to-day life than COVID has had so far.

Per a recent USA Today article on endemicity, U.S. health experts aren’t ready to label COVID-19 an endemic just yet. According to the article, those same experts do expect cases to rise this summer, but are also predicting a less devastating wave than the last two summers or this past winter’s omicron surge. The reason is that, between vaccinations and prior infections, a substantial portion of the population now has some level of immune protection against COVID-19.

Still, rising COVID case numbers in Grand Traverse County have pushed the county into the high-risk tier again, per the Centers for Disease Control and Prevention (CDC). CDC data from May 12 shows that the county has 238.48 cases per 100,000 people, and 16.6 COVID hospitalizations per 100,000. High risk of transmission comes with recommendations from the CDC to wear masks in indoor, public places. As of mid-May, Grand Traverse County was one of 16 counties in Michigan with high transmission rates and masking recommendations, though several other northern Michigan counties – including Antrim, Benzie, and Kalkaska – also fall into that bracket.

The CDC’s recommendations clash with the plans that most event organizers have for this summer. The National Cherry Festival and Traverse City Horse Shows, for instance, have announced no plans to require masks, proof of vaccination, social distancing, or other COVID precautions among attendees. Traverse City Film Festival, meanwhile, is planning to require temperature checks and proof of vaccination and booster shots for anyone attending screenings at indoor venues, but likely won’t reduce theater capacities to allow for social distancing. Michael Moore has said that he will make a call on masking requirements closer to the festival’s late-July start date.

 

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