Local business, events, tourism taking economic hit in pandemic, hopeful for recovery
The community is preparing for reopening businesses, but uncertainty remains and the economic impact of COVID-19 closures and restrictions is likely to be felt for sometime to come.
Over the last few weeks ,The Electric has been talking to local event hosts, the tourism office, business owners managers and independent operators about the impact they’ve felt during the closures and what recovery might look like.
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Great Falls is coming into prime tourism and event months.
It’s a quarter where Great Falls would see on average 250,000 overnight visitors, it would be closer to 50,000, according to Rebecca Engum, Great Falls Montana Tourism director.
Annually, overnight visitors typically inject about $184 million into the local economy through spending on fuel, retail, shopping, dining, grocery/snacks, etc.
Without overnight visitors, that could equate to a loss of an estimated $44 million not being spent locally from April to June.
With cancellations of major events in March through at least June, it will be a “huge impact,” Engum said.
For the Mansfield Convention Center and theater, 29 major events have been scheduled from March 14 through June 14.
As of the end of March, all but seven of those had postponed or canceled. The Great Falls Symphony later canceled the rest of its season as well.
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The Russel Art Auction cancellation alone was a loss of $17,000 for the city’s event budget, according to Owen Grubenhoff, the Mansfield event manager.
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The total loss from cancelled or postponed events was at least $65,000 for March through June, he told The Electric in late March.
Most of those events are set up and staffed by on-call employees, so if an event is canceled, they don’t work and don’t get paid, he said.
Many of those events will be returning to the Mansfield in the fall, he said, so the current fiscal year will show losses, but the next fiscal year should rebound as long as the COVID-19 pandemic has ended or stabilized by then.
The BMW Motorcycle Owners of America Rally was scheduled to be at Montana Expo Park in June, but recently announced they’re pushing that to June 2021, equaling an estimated loss of $70,000 for the fairgrounds budget, according to Susan Shannon, Expo Park manager.
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The Great Falls Turf Club also canceled their event this year and 29 other events had been affected by the end of March. Shannon told The Electric.
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Some have already been rescheduled, others were in a holding pattern depending on the public health situation, she said.
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Cancellations included AAU Wrestling, Prairie Sister’s Vintage Market, UP Rodeo Practice, Gun and Western Collectable Show, State FFA Convention, and Skunkwagon Swap Meet, Shannon said.
The estimated revenue loss is about $81,500.
The event cancellations, stay home orders, pandemic fears and quarantines for incoming travelers are hitting hotels hard. That hit will also impact Great Falls Montana Tourism since some of their budget is derived from taxes and assessments on bed stays.
“We’re going to be hit this year, then hit a lot in fiscal year 2021,” Engum said. Since tourism gets those revenues the year after their collected, it will take them longer to recover, she said.
Engum is projecting that the Great Falls tourism’s 2021 budget will be down about 48 percent.
Since tourism is impacted worldwide, every tourism entity will have budget hits, but they have bigger budgets, Engum said.
“When people are able to travel again, the onslaught of messaging will be thick and many luxury resorts, bucket list experiences will all be clamoring for what might be left of the discretionary spending for travel and offering insane deals,” Engum said. “The paid media message Great Falls Montana Tourism will deliver will have to cut through all of that and with less financial push behind it. We will be scrappy and focused on our best options to secure convention and leisure travelers for Great Falls.
Bob Dompier, general manager of the Heritage Inn, said the hotel was on its way to a bumper year, but “it’s just dropped off the charts.”
The hotel has been open since 1972 and he’s been the manager for 25 of those years, from 1983 to 2002 and then came back in 2014 and has been the manager since, he said.
In terms of room reservations, the hotel had had its second best January ever and the best February ever. They’d had a larger than normal year for booking conventions. By the first week of March, they’d lost everything through the end of May, he said.
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“This year, it’s like the planets lined up, we had a lot of conventions booked. But we’ve lost a lot of them,” he said.
Some have rebooked for later dates, but many canceled, he said, several weddings also canceled.
He said they closed the restaurant, bar and casino the day before the health order dictated the closures in mid-March.
“We just hope that this ends and we don’t lose everything that we have in June,” Dompier said. “Our feeling is it will take a long time to get back to normal, a new normal.”
The Heritage and neighboring Motel 6 are under the same management and Dompier said they’d had to lay off a number of staffers. By early April, there were 70 unemployment claims among their staff, he said.
“We’re down to a skeleton crew,” Dompier said in early April.
Occupancy was “dismal,” but they still have some flight crews and others in early April.
The Heritage Inn has 230 rooms and most conventions fill the hotel with spillover at the Motel 6, Dompier said.
“There’s no way we can make up for the loss of conventions,” he said, and if they don’t rebook, “that’s really sad for our business” but that’s a lots of people coming to town that buy gas, eat, drink, gamble, shop, etc.
When they stay in hotels, visitors don’t just hole up in a hotel, they go out and do things and spend money, Dompier said, and that’s all money coming into the local economy.
“That’s huge. It’s a loss for the city, it’s a loss for almost every single business here in town,” Dompier said.
Since many of the conventions book at the hotel annually, those attendees know the area and their favorite attractions each time.
“That business is lost until next year and you hope that the conventions come back strong,” he said.
Downtown at the O’Haire Motor Inn, Sandra Thares said room occupancy was between 5 and 15 percent in early April. That was down from their average of 72 percent over the last three years for the same timeframe.
By early April, Thares had furloughed 42 full and part time staff.
Thares said they were operating off savings trying to keep the doors open so that when people start traveling again it may not be as difficult to get employees back. She said they had some cashflow from a few room rentals and the Clark and Lewie’s restaurant, but that wasn’t covering expenses.
Thares said the summer business from out-of-state travel will hinge on the ability of airlines to put people and planes back in the air and that people will either be sick of staying indoors and ready to take trips, or still hesitant due to COVID-19 fears. She said there could be stronger than normal number of in-state tourism this summer.
Several local hotels closed in March due to COVID-19, but some like the O’Haire stayed open though largely empty.
“Honestly, we’re all just hoping to survive the next four weeks to see what the next four weeks after that brings and the four weeks after that. I wouldn’t be surprised to see smaller business operators not be able to keep their businesses open or reopen. This will forever shape our communities,” Thares said. “Small businesses are huge contributors to nonprofit fundraisers. Will we be able to do that? Will we have to cut down no other expenses? What’s the trickle down effect? There’s how many thousands of beer trucks not moving right now. How does that affect the revenue from gas tax? How does that ultimately affect the state coffers? Does that in turn make the legislators raise the bed tax on us again? So many what ifs.”
For downtown retailers, many have had to drastically shift their operations since the governor’s stay home order shut down businesses that were considered non-essential.
Many of them increased their online and social media presence in order to keep sales alive while their doors were closed to shoppers.
For Kristina Remsen at Klover, she started offering new online incentives, such as a nightly “happy hour” with special deals and more products available online.
Kattie Meyer at Motifs for the Home shifted to a Facebook group Motifs Silver Linings, which is her business’ actual legal name.
“I want to be a bright spot in downtown Great Falls,” Meyer said. “The customers have been so supportive. Shopping the page and sharing online.”
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She’d had a website previously, but never saw much business from it.
“I am so glad I stated the group page. I feel that it is just a great community spot for people to shop,” Meyer said.
She also sold Great Falls Strong and Montana Strong shirts and sweatshirts on the page with 20 percent of those sales going to purchase meals from local restaurants for healthcare workers.
Tracy Perry at Blue Rose Styles has had a website since 2016 and have decent sales since the governor shut down non-essential businesses. In February, she had started a private Facebook group called Rose Rack, where she’d been selling slow moving, or just one size left inventory at discounted prices.
Perry said her customers were “jacked. Everyone is home self-isolating and they love getting on their computer and I feel they want to keep retail alive and well in Great Falls, so the support has been heartwarming.”
Alison Fried at Dragonfly Dry Goods was also posting more on Facebook and shipping items.
“Everybody’s doing a little bit of something to survive,” Fried said. “Retailers, if we’re selling anything right now, it’s not going to cover our expenses. There’s no way we can sell enough to cover what it costs to be closed.”
Fried said she’s hoping to lower expense and ride out the COVID-19 closures and that when stores are able to reopen, people will do events and support local retailers. It’s more of an experience and connecting with other people by shopping in downtown shops versus shopping online from Amazon or national chains.
Bighorn Outdoor Specialists was in a bit of better shape since they were allowed to do appointments and curbside pickup since they were considered a bike shop, which fell into the essential business categories in the governor’s directive. They could have stayed fully open, but felt it was best to take the steps to limit exposure for their staff and customers, according the Beth Leatham.
Bighorn also launched a new online shop section for their website and started the Backroom Bargains Facebook group, which has been successful though labor intensive, Leatham said.
Despite the online efforts and community support, sales have been down for many retailers during the COVID-19 closures and restrictions.
Remsen said in mid-April, her sales over the last month had been about a third of what they were at the same time last year. If things continue at the same rate, it will end up being a bigger loss, she said.
Vendors are also shutting down, making it harder to get new products in and production schedules had also been pushed back, Remsen said.
“Because of that, I feel like it’s going to take even longer for us small locally owned retailers to recover,” Remsen said.
At Blue Rose Styles, sales were down 11 percent compared to the same time last year. It would be worse, Perry said, “if I wasn’t busting my butt trying to push products online and on Facebook Rose Rack.”
At Ferrins Furniture, sales for this time of year are down about 90 percent, according to Andy Ferrin.
“We will survive long term as we have a solid financial background. We see a huge pent up demand for furniture once the shelter in place is lifted. We had a solid first quarter so the economy was good before this, which leads us to believe that the country will bounce back faster than if this would have been a “burst” instead of a “pandemic.” Having said that, if we are kept in place through May or June that could mean the end for many struggling businesses,” Andy Ferrin said.
Leatham said Bighorn was on “very solid footing going into March, and took some steps early to limit inventory expenses, etc. The end of March was a little down, and so far for April, we’re seeing less than half of regular revenue. I think this is in large part due to the fact that so much of April sales are focus on travel, everyone usually shops before their spring break trip. Long-term, we’ll be just fine.”
The local retailers are preparing to reopen, with social distancing guidelines in place, as the governor’s stay home order lifts on Sunday and retailers are allowed to begin reopening on April 27.
They impact of the closures and restrictions could continue to be felt through the coming months as the pandemic recovery plays out, but they are hopeful downtown businesses will support each other and that the community will think local.
“I think we actually need to do more as retailers to support each other. I’m not sure we are doing enough. Even if it’s just sharing each other’s posts on social media. Times like these is when it really has to be community over competition. We are all in the same boat as retailers, and whatever we can do to help each other needs to be done,” Remsen, of Klover, said. “Our community is doing such an amazing job of supporting our restaurants. But I think it’s kind of an afterthought sometimes to remember to support retailers, because it’s not instant gratification like ordering food is. Buying gift cards is a great way to support retailers. They get the money now to pay their bills which they are still incurring, and the buyer can look forward to a shopping trip when all of this is over. Inviting friends to join all the local boutiques Facebook groups and pages is another way. Spreading the word about your favorite shops. Sharing and liking their social media posts. Giving them positive reviews online, etc. I know many stores in town right now have Facebook groups where you can purchase their items: Daydream, Inge’s, The Blue Rose, Motifs, The Boutique, Sora, Bighorn and Klover all offer this. Everyone is offering free delivery and shipping, discounts, you name it. All to try and continue catering to our amazing customers and stay afloat ourselves.”
Meyer said that hopefully the community will focus on shopping local as things start to return to some form of normalcy.
“I feel like every local retail owners would jump through hoops to help their customers out,” Meyer said.
Salons are able to open beginning April 27 as long as they comply with health precautions laid out in the governor’s plan.
Hair stylists like Michelle Bebbington are self employed and everyone at the salon where she works, The Living Room, is either an independent contractor of booth renter.
Bebbington and other stylists and salons were mandated to shut down at the end of March. She had shut down her chair the week before “as I couldn’t ethically and morally continue to work knowing I was risking my health that of my family and clients by continuing to work despite taking the most extreme cautions. Plainly said, I am not working, I cannot legally pick up my shears and cut anyone’s hair at the risk of losing my license and risking my own health.”
Without being able to work, there’s no income. Bebbington said their salon was able to provide an e-commerce link so their clients could purchase items sold at The Living Room online to help offset some losses.
To her, the lack of work has been “a devastating loss,” she said.
Salons had petitioned the governor to allow them to reopen under strict cautions and the governor’s reopening plan allows for it.
“We are desperate to get back to work,” Bebbington said. “We are taking the most extreme precautions, going back to work will mean a different experience for both our clients and for us. I feel like we are doing everything we can to make everyone feel safe.”
For Bebbington, the shutdown has been a “depressing situation. We are especially effected in our industry because it’s not just about the money or our jobs. We are healers, we are in this business to help people feel good about themselves, but it’s a give/take situation as much as we give we look forward to that interaction with our clients, most of whom we call our friends, and we are missing them terribly.”
Her salon started the #beautywaits2020 campaign asking clients to wait for their stylists and estheticians do avoid box hair color and waxing kit disaster, she said.
Casey Kingsland typically brews four days a week at the Mighty Mo Brewing Company.
He’s brewed once in the last five weeks, due to COVID-19 closures and restrictions.
Normally, he’s selling about 10 barrels of beer weekly to Gusto Distributing and another distributor in Billings.
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Kingsland said they’re trying to use up the inventory on hand in the brew pub and bought some kegs back from the distributor to use it up.
He said he’s a bit worried that as things open back up there will be enough demand and they’ll run out of beer. Kingsland said as soon as he starts getting orders from the distributors, he’ll start brewing again and he’s trying to time it right to avoid having too much beer and not enough demand or vice versa.
“We don’t really know how customers are going to act,” Kingsland said of the lifting of COVID-19 restrictions. “It’s just of a wait and see.”
Jeremiah Johnson at Jeremiah Johnson Brewing Company is sitting on at least 500 kegs in his brewery in downtown Great Falls. Beer in the keg lasts six months, so he’s expecting to be able to move it as the COVID-19 closures and restrictions let up, but at a slower pace than anticipated.
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He had just signed a deal with the Glacier Restaurant Group, which operates the MacKenzie River Pizza chain, to have taps in their restaurants in seven states. They work with 19 distributors, so their inventory does normally move quickly.
Jeremiah Johnson Brewing Company has a taphouse in Coeur d’Alene, which is closed other than filling growlers and selling six-packs of cans, he said. The community there has been supportive.
Right now, all of the tanks in his brewery are empty. It was the first week they didn’t make beer and up until March 7, they hadn’t had an empty tank in months. Typically, they brew four batches per week. A batch is 60 barrels or 480 kegs weekly, he said.
“That’s what we’d expect to do in the summer,” Johnson said.
Can sales are still decent, he said, since they have Jeremiah Johnson beers in grocery stores statewide, but probably have 40 pallets of cans finished with nowhere to go right now. That’s about $100,000 worth of beer sitting in his cold storage.
“That’s the impact. It’s crazy,” he said. “It’s a weird situation. In some ways it’s better because we sell a lot in grocery stores, but on the flip side, we don’t have a retail location to do kegs locally.”
“We’re in a stand still,” he said. “It’s really a wait and see.”
Johnson is confident that his brewery will get through it, “but the future will be different. It will probably change the way we do business forever. We just had so much momentum and boom it stopped.”