Topics: Miller College of Business, Research

June 30, 2020

It only took a few months, but COVID-19 has damaged Indiana’s tourism, vacation, and hospitality sectors to the point where strong government intervention is necessary, says a new policy report from Ball State University.

The Recovery After COVID-19: Travel, Tourism, and Hospitality Industries of Indiana,” a report by Craig Webster and Sotiris Hji-Avgoustis, management faculty in Ball State’s Miller College of Business, found that these sectors have come to a near complete standstill during the first half of the year due to the pandemic.

They cite the World Travel & Tourism Council’s report that the pandemic caused over 100 million job losses in these areas of across the globe.

“The estimates for the losses of jobs in the sector are substantial for many reasons,” Webster said. “There is little to be done in terms of moving to virtual tourism that can benefit the labor that works in bricks and mortar tourism and hospitality establishments. So, while software engineers, accountants, and university professors can easily move their operations to their home offices, many in tourism and hospitality do not have that option.

“Also, because of health risks, travel has been curtailed. In addition, travel, tourism, and hospitality suffer from the issue of perishability. While a shoe manufacturer, for example, may stockpile finished products, hoping that a boom will occur later to sell the finished goods, hospitality and tourism products cannot be treated in the same way. A lost night in a hotel room cannot be sold the following day.”

Their research found that 2018 data on tourism suggests that one in 23 Indiana workers is employed through the various hospitality industries. The same data also shows that the Indiana tourism industry directly supported more than 152,000 jobs in Indiana in 2018 and that if tourism did not exist in Indiana, each Indiana household would have to pay around $566 more in sales and local taxes to keep the current level of tax receipts.

Despite not being in a major hub of international tourism, Indiana’s travel, tourism, and hospitality industries are important to the state’s economy, providing significant revenues, the report noted.

“The economic recovery for the industry in Indiana will require a strong governmental response, funneling funds into improving the tourism infrastructure and ensuring visitors in Indiana that they will be safe to travel to and in Indiana,” Webster said.

The report offers a number of coordinated policies with the state government taking the lead:

  • funding of market research for the industry
  • coordination of policies across the state for the industry
  • training workers and encouraging workers to return to the industry
  • developing a state-level recovery strategy

Webster said the pandemic of 2020 will likely have significant and lasting effect upon government and the travel, tourism, and hospitality industry for years to come.

But the crisis provides an opportunity to rebrand, he said.

“Many places will have a chance to have a fresh start,” Webster aid. “This is an opportunity for Indiana to rebrand itself in any way that it wants; however, timing is key. Those destinations that recovered from major cataclysms used the period as a time to rebrand themselves, taking advantage of the opportunity and communicating this to the general public and potential visitors.

“Even in the state of Indiana, there is a precedence for this. In 2015, Visit Indy rebranded Indianapolis as a welcoming place in the wake of the controversy over discrimination and religious freedom. A notion that Indianapolis is a safe place will resonate well with many. In addition, the promotion of local venues and sites of interest will be important, since visitors will likely not want to take airplanes in the near future, preferring to stay in their automobiles to reduce health risks to themselves.”