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Hotels go dark across St. Louis, region's tourism office furloughs almost half its staff

Hotels go dark across St. Louis, region's tourism office furloughs almost half its staff


ST. LOUIS — Kathleen “Kitty” Ratcliffe was in the tourism and convention business in New Orleans when Hurricane Katrina hit 15 years ago.

“This is like Katrina on steroids,” said the chief of the St. Louis Convention and Visitors Commission, known locally as Explore St. Louis.

In just two weeks, the hotel industry — whose room taxes fund a good portion of the CVC’s operations — has all but shut down as the coronavirus pandemic forces events to cancel and people to stop traveling. That’s forced layoffs and furloughs of CVC staff who have nothing to market and no events to prepare for. America’s Center, the convention center operated by the CVC, is dark.

It’s a hit few saw coming, especially after a good start to 2020, with occupancy at area hotels up about 3.6% year over year in January and February.

“We believe that those metrics are all going to be down 80%, maybe even a little more for last week,” Ratcliffe told her board during its bi-monthly meeting Wednesday. “And this week it’s likely to be 90%. As a result, hotels have laid off or furloughed thousands of workers in the St. Louis area. They have closed off entire floors or wings of hotels. They have closed food and beverage operations. And in some cases, they are simply closing their doors.”

Ratcliffe knows of three or four hotels in the region that have closed — the Post-Dispatch has confirmed one, in St. Charles — and she suspects more will follow suit.

In an interview after a nearly three-hour board meeting, a large portion in closed session to discuss personnel and other matters, Ratcliffe said the CVC eliminated four full-time positions and asked 51 full-time employees to take a 30-day furlough — about 40% of its full-time staff.

All staff, herself included, have taken a 20% pay cut with a one-day-a-week furlough. Yet, with the rapid change in the market, she and other top administrators are busier than ever.

“We’ve had hundreds of layoffs of our part-time staff, and all the contractors in the building laid off hundreds more,” Ratcliffe said.

Many of those part-time employees would have worked events such as a major volleyball tournament scheduled for the weekend of March 14. Convention staff had already set the whole event up before organizers canceled. A large Halloween costume and attraction expo scheduled for the next weekend also pulled the plug.

“We’re not covered by insurance on those events, either, because they were canceled by an infectious disease that wasn’t actually in our building,” Ratcliffe said.

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The XFL’s BattleHawks canceled the team’s final three games scheduled for the Dome at America’s Center. At least there, Ratcliffe said, the strong showing of St. Louis fans at the first two games helped the organization meet its budget projections ahead of schedule.

The loss of other events through May, though, will be tough to absorb, as will the shutoff of hotel tax revenue. Asked whether the CVC’s reserves can sustain it amid the virtual event and hotel tax shutdown, Ratcliffe said “it really will depend on how long this lasts.” The organization’s unrestricted cash reserves are “pretty minimal,” she said.

The uncertainty comes as the CVC prepares to embark on one of its biggest projects in a generation: a $210 million expansion of America’s Center.

It was just a month ago that the CVC received the final approval it needed from top St. Louis officials and the St. Louis County Council. The CVC’s own board gave its final stamp of approval to the agreements on Wednesday.

But the bonds financing the massive expansion that was first announced nearly 18 months ago, still need to be issued. And investors may be wary of debt backed by taxes from the industry that’s among the hardest hit by the coronavirus.

“The credit markets are in a little bit of turmoil right now, so the exact timing of when the city will issue is unclear,” said Thompson Coburn attorney Michael Lause, representing the CVC. “We’re hoping it will be quickly and anticipating it will be quickly.”

Ratcliffe said the organization hopes the bonds are issued sooner rather than later, partly because of loans it extended to the city to acquire downtown real estate for the expansion and partly because some events are already booked for 2023 and expecting the new amenities. Wrangling among city officials over which city office would issue the bonds has already put the project behind schedule.

“We are on a very tight timeline to get this project done,” she said. “To delay would be detrimental.”

Ratcliffe and other CVC officials are trying to be ready for recovery. Most staff have been furloughed so “they can spring back into action,” said CVC Chief Marketing Officer Brian Hall.

Already, some event organizers have called St. Louis to see about scheduling events here that can’t be rescheduled in the cities where they were originally planned. There could be some opportunity there in a few months, Hall and Ratcliffe hope.

“Everyone is in crisis mode at the moment, but we need to have a plan for the recovery period,” Ratcliffe said. “If we’re not ready to do that, we’ll be left in the dust.”

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