Bracing for coronavirus fallout: Sonoma County businesses anticipate deep impact
GEYSERVILLE - Corey Beck stood at the entrance of Rustic, the restaurant at the Francis Ford Coppola Winery. Every other table was occupied. That was by design, said Beck, the winery's CEO.
The idea was to create space between parties. “What we're learning about the virus,” he said Friday, “is that space is our friend.”
A day earlier, in a morale-boosting email to the winery's 400 employees, Beck touched on other crises the nation, county and wine industry have weathered: 9/11, the 2008 recession, the floods and fires that have beset the North Bay in recent years.
“At least with the fires,” he said the next day, “you knew how much or how little they were contained.
“This one is different. It's like a ghost.”
Like a valley fog that obscures the road ahead and won't soon lift, the coronavirus pandemic - declared a national emergency by President Donald Trump on Friday - threatens to strike at one of Sonoma County's economic pillars: the tourism industry that pumps $2.2 billion a year into the local economy. Wineries, hotels, restaurants, wedding venues and visitor attractions are bracing for a steep downturn just as spring arrives, a time that ordinarily signals a welcome upswing in visitors arriving from around the country and world.
As anyone knows who watched the stock market crater last week, the financial toll ultimately extracted by COVID-19 likely will inflict pain on the county economy far beyond the realm of tourism.
Susan Gorin, chairwoman of the Sonoma County Board of Supervisors, expressed concern the local virus-related economic fallout could be three or four times greater than that seen by the 2019 Kincade fire and rolling PG&E power shut-offs, a hit pegged at $725 million. From Petaluma to Geyserville, at businesses ranging from wineries and hotels to bakeries and bowling alleys, the anxiety last week was palpable.
$50,000 loss in one day
At the Coppola winery, Rustic was half full - not bad, considering just a day earlier the 43rd annual Wine Road barrel tasting event had been canceled. That came as a painful blow to the event organizer, which now must refund $150,000 to ticket holders, and for the 100 participating wineries, including Coppola, which will miss out on much of the $3 million in sales generated by the event.
Cancellations are mounting swiftly at area hotels and lodging properties. The Flamingo Resort & Spa, a fixture in Santa Rosa since 1957, lost $50,000 in revenue in one day last week, said Michael Gibson, director of food and beverage, who called it “a fraction” of the resort's losses.
“Cancellations keep coming in,” he said, noting that some were from Europeans planning to arrive in April, May and June.
After wiping down the coffee station counter in the stylish lobby of Healdsburg's Harmon Guest House, front desk supervisor Dylan Sanders spoke of his ominous inkling that “bigger wheels are starting to turn.” On Thursday alone, he said, that hotel and its two sister properties, the h2hotel and Hotel Healdsburg, had gotten around 100 cancellations.
The occupancy rate at standalone lodging properties in Sonoma County during the week of March 1 to 7 was down 5.6% from the same time last year, according to the latest report from STR, which tracks the hospitality industry worldwide. The rate declined a whopping 16.9% at hotels and motels considered to be full service.
Restricted air travel will “definitely knock down occupancy rates,” said Robert Eyler, an economics professor at Sonoma State University. The hotel losses, he said, will ripple through the local tourism industry, hitting restaurants, wineries and retailers.
The loss in hotel tax revenue alone could be staggering. Taxes on tourist spending in 2018 amounted to $194.8 million and the tourism/hospitality industry supported 22,300 jobs, one in 10 jobs in the county, according to a study by Dean Runyan Associates, a Portland, Oregon, economic specialist.
The pandemic's effect on the broad tourism sector will be “significant,” agreed Claudia Vecchio, president and CEO of Sonoma County Tourism, a nonprofit that promotes the county as a destination. “It's not something we can market our way out of.”
“It would be irresponsible of me not to be worried. It's an uncertain time,” said Joe Bartolomei, co-owner of the upscale Farmhouse Inn in Forestville.
The 25-room inn, with its Michelin-starred restaurant chef, has received some cancellations and a larger number of requests from guests to move their reservations a week or a month ahead, he said.
“There is a lot of fear out there and a lot of concern, but there isn't much data,” said Bartolomei, vice chairman of Sonoma County Tourism, regarding a full measure of COVID-19's effect on tourism.