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| Virginia Beach boardwalk. |
Memorial Day weekend marks the traditional beginning of the summer tourism season in Virginia Beach which is critical to the economic survival of many hotels, restaurants, and tourism related businesses, many of which even have the loan repayment and/or rent schedules loaded into the summer months since revenues fall so sharply once fall and winter arrive. With a number of businesses reopening tomorrow under restrictions (the husband's salon will reopen on Tuesday with major restrictions on operations), Virginia's beaches remain closed and Virginia Beach tourism related businesses are frantic about the impact. A piece in the Washington Post looks at the situation and the pressure on Governor Northam to allow the beaches to open - I have had client calls since it is known that the husband and I know the governor - in what may be a catch-22 situation. While the City and business owners want to open with restrictions, the big questions are (i) whether or not tourists would comply with social distancing - probably not, in my view - and (ii) will tourists from outside the region visit and bring the virus to Virginia Beach which so far has had far less cases that parts of the state from which tourists will likely come. Here are article highlights:
Electricians wearing masks bustled around developer Bruce Thompson on the 23rd floor of his new hotel, its multimillion-dollar views of the oceanfront marred by one flaw: no people on the beach.
The coronavirus pandemic is wreaking havoc on businesses everywhere, but as most of the state prepares to start loosening restrictions on Friday, merchants in Virginia Beach are feeling left out.
Gov. Ralph Northam decided not to include beaches in his first phase of reopening, keeping the sand closed to everything but solitary exercise and fishing. With Memorial Day less than two weeks away, that spells trouble for all resort-city businesses, from hotels to the three-for-$10 T-shirt shops, henna tattoo parlors andpirate-themed minigolf courses on Atlantic and Pacific avenues.
“We’re in a really bad situation,” said Thompson, a major political donor who served on a panel of business leaders advising Northam (D) about ways to reopen the state’s economy. He said he was outraged when the beach wasn’t part of the reopening plan unveiled last week.
“I talked to the governor almost every day until last Friday,” Thompson said this week. “On Friday night, I asked him what the hell happened, and we haven’t had a lot of conversation since then.”
City officials are working with the state to put together a plan to get people back onto the sand by Memorial Day weekend. They feel caught in the middle, literally, as Ocean City, Md., partially reopened earlier this month and the Outer Banks of North Carolina prepares to welcome visitors this weekend.
Memorial Day is not off the table to have a phased-in reopening, but it’s got to be driven by the health data,” Northam’s chief of staff, Clark Mercer, said in an interview.
The pandemic has not hit Virginia Beach as severely as some other parts of the state, illustrating the challenge Northam faces as he tries to chart a consistent path out of the crisis. The city had reported 519 cases and 18 deaths as of Wednesday — a fraction of the toll in Prince William County in Northern Virginia, which has a similar population but 3,181 cases and 65 fatalities.
Yet the economic impact of the shutdown has hammered oceanfront tourism. Virginia Beach has canceled more than 500 licensed events in the past two months, officials said, from weddings to sports tournaments to Pharrell Williams’s “Something in the Water” music festival that was expected to draw 65,000 attendees.
The city has submitted a plan to the state for managing a reopened oceanfront, including a staff of “safety ambassadors” to break up large groups (in a friendly way), massive cleaning protocols and law enforcement patrols that would include drones and all-terrain vehicles.
Deputy City Manager Ronald H. Williams Jr. said employees are being hired and trained and could have been ready to go by this weekend.
“That was definitely a goal for the city,” Williams said. Now he’s working daily with state officials to find “what would give them the comfort level for a safe operating environment” by Memorial Day weekend, he said.
Virginia Beach is also a potential political flash point, a wealthy area with a large population of active-duty and retired military members that traditionally leaned red. Democrats have made gains there since President Trump was elected in 2016 but by extremely thin margins.
Northam has insisted that he won’t be swayed by political or economic arguments in deciding the state’s timetable. But Virginia Beach business owners say the damage there is becoming too great to ignore.
“It’s just kind of ghostly,” said Russell Lyons, walking past an empty hotel swimming pool, waterfalls silent and artificial rocks streaked and bare. Lyons’s family owns seven hotels in Virginia Beach, and he serves as president of the local hotels association.
The scariest part, he said, is the timing of the shutdown. Tourism is highly cyclical in Virginia Beach; most hotels operate in the red during winter months, taking out lines of credit to cover expenses, he said. They pay off loans as business ramps up during spring, then bank profits between June and mid-September.
But this year, occupancy has cratered since the state of emergency went into effect in mid-March. His family’s hotels are averaging less than 20 percent capacity. At times over the past few weeks, some got as low as a single occupant.
“We’ve had more staff than guests,” he said.
Trouble might hit in the fall, when owners can’t pay their debt and have to sell out. “It’s terrifying,” Lyons said.
Restaurants face a similar predicament. Rockafeller’s has been in business for 31 years in a waterfront neighborhood south of the oceanfront, fishing and pleasure boats lining the creek outside its plate-glass windows. Owner B.J. Baumann said she had to furlough employees who have been with her from the beginning.
With Northam expected to roll back some restrictions on Friday, Baumann has brought back half the staff to freshen up paint and stain the floors in anticipation of reopening for half-capacity, outdoor-only dining. But until the beaches reopen and tourists come back, she has no idea whether the restaurant will survive.
Farther north, no one has more at stake than Thompson, who had planned to open his $125 million Marriott a month ago. With its $7.5 million, 23rd-floor restaurant modeled after venues in Miami and Los Angeles, the tower anchors a vast beachfront complex that includes homes and condos and is only partly complete.
Now, Thompson said, he has had to lay off 400 workers, had more than 80 weddings cancel and watched condo buyers back out.
“We’re in a really bad situation. We don’t have our beach,” he said, noting that the mortgage payment on the new tower is $625,000 per month. If retailers are allowed to reopen, he said, the 28-mile-long, 100-foot-wide beach at the foot of his hotel should be able to do the same.
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