georgia tourism forecast scenarios
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Georgia Tourism Forecast ScenariosSeptember 2020
W W W . T O U R I S M E C O N O M I C S . C O M
Pictures courtesy of Travel Alberta
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STUDY OVERVIEW
Georgia’s Department of Economic Development engaged
Tourism Economics to provide forecast scenarios for the tourism
sector’s recovery during and after the COVID-19 pandemic.
The analysis is organized into ten parts:
1. Report Highlights – reviews major findings;
2. The COVID-19 Pandemic– examines the current state of the
crisis;
3. Scenario Overview– provides an overview of three possible
scenarios;
4. The Upside Scenario – reviews key metrics in the Upside
Scenario;
5. The Baseline Scenario – reviews key metrics in the Baseline
Scenario; and
6. The Downside Scenario – reviews key metrics in the
Downside Scenario.
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TABLE OF CONTENTS
• REPORT HIGHLIGHTS 4
• THE COVID-19 PANDEMIC 9
• SCENARIO OVERVIEW 19
• THE UPSIDE SCENARIO 24
• THE BASELINE SCENARIO 29
• THE DOWNSIDE SCENARIO 34
REPORT HIGHLIGHTS
5
REPORT HIGHLIGHTSWe developed three scenarios to determine a range of possible impacts
Summary of COVID-19 related tourism losses in three scenariosDollar figures in millions
Baseline Scenario
Total tourism spending losses reach $10.9 billion in
2020, a 33% drop compared to 2019. 67,000 jobs
supported by tourism spending are lost.
Downside Scenario
Total tourism spending losses reach $11.6 billion in
2020, a 35% drop compared to 2019. 71,200 jobs
supported by tourism spending are lost.
Sources: Tourism Economics; STR; US Travel
Upside Scenario
Total tourism spending losses reach $10.1 billion
in 2020, a 31% drop compared to 2019. 62,500
jobs supported by tourism spending are lost.
2020 2021 2022
Upside
Lost visitor spending, $ $10,144 $4,231 $2,116
Lost visitors spending, % 31% 13% 6%
Lost jobs 62,537 26,085 13,042
Room revenue $1,859 $744 $373
Baseline
Lost visitor spending, $ $10,864 $5,411 $3,228
Lost visitors spending, % 33% 17% 10%
Lost jobs 66,974 33,359 19,899
Room revenue $1,921 $952 $567
Downside
Lost visitor spending, $ $11,557 $8,195 $5,322
Lost visitors spending, % 35% 25% 16%
Lost jobs 71,245 50,523 32,811
Room revenue $1,975 $1,440 $934
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REPORT HIGHLIGHTSScenario overview
Georgia’s COVID-19 related traveler spending in three scenariosDollars, billions
Sources: Tourism Economics; STR; US Travel
$0
$5
$10
$15
$20
$25
$30
$35
2016 2017 2018 2019 2020 2021 2022
Historical
Upside
Baseline
Downside
The recovery will be a
multi-year process, and
visitor spending will
not fully recover until
2023 or 2024.
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REPORT HIGHLIGHTSLost spending by month
Georgia’s COVID-19 related traveler spending losses in three scenariosPercent losses compared to 2019
Sources: Tourism Economics; STR; US Travel
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
J F M A M J J A S O N D J F M A M J J A S O N D
Upside
Baseline
Downside
2020 2021
Losses peaked in
April but remained
at around 30% in
August.
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REPORT HIGHLIGHTSLost room revenue by month
Georgia’s forecasted room revenue in three scenariosDollars, billions - losses compared to 2019
Sources: Tourism Economics; STR; US Travel
2019 2020 2021 2022 2023 2024
Forecast
Upside $4.8 $3.0 $4.1 $4.4 $4.9 $5.4
Baseline $4.8 $2.9 $3.9 $4.2 $4.7 $5.2
Downside $4.8 $2.8 $3.4 $3.9 $4.3 $4.8
Losses, $
Upside -- $1.9 $0.7 $0.4 -- --
Baseline -- $1.9 $1.0 $0.6 $0.1 --
Downside -- $2.0 $1.4 $0.9 $0.5 --
Losses, %
Upside -- 39% 15% 8% -- --
Baseline -- 40% 20% 12% 2% --
Downside -- 41% 30% 19% 10% --
THE COVID-19 PANDEMIC
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This section will briefly review the COVID-19
pandemic.
This pandemic will continue to be the
dominate force in shifting the world’s
economic prospects for the foreseeable
future. In the US, cases and deaths increased
in June and July, before beginning to decline
again in August.
Georgia has seen a significant increase in
cases and death through July and August.
COVID-19 deaths per capitaDaily deaths per million residents
Source: IHME
State of the pandemic
0
1
2
3
4
5
6
7
8
Mar Apr May Jun Jul Aug
Georgia
USA
Countries have had different levels of
success combating the spread of
COVID-19.
THE COVID-19 PANDEMIC
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THE COVID-19 PANDEMIC
Georgia’s GDP will recover slightly
faster than the US.
GDP growth in Georgia and the USIndex (2019 q4 = 100)
Sources: Tourism Economics; STR; US Travel
The pandemic created an acute recession,
but growth has already resumed. We
forecast that Georgia will reach its 2019q4
GDP level in 2021q3 while the US will
recover by 2021q4.
Employment will recover more slowly,
causing the unemployment rate to remain
above 5% until 2023.
Economic impact
85
90
95
100
105
110US
Georgia
12
The pandemic creates three broad areas of
uncertainty in the outlook.
The underlying issues for travel
THE COVID-19 PANDEMIC
Decrease in travel
Actual limits on travel are only part of the
problem. Fear of the virus, economic
uncertainty, and loss of income will linger
after travel restrictions are eased and
hamper the travel sector’s recovery.
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Return to “normal” levels of travel will be a
multi-year effort, with domestic travel
leading followed by regional international
and finally long-haul international.
Anatomy of a recovery
THE COVID-19 PANDEMIC
Initial recovery
• Leisure
• Drive
Secondary recovery
• Essential business
• Small- and medium-size groups
• Regional international (intra-Americas, intra-Europe)
Final recovery
• Long-haul international
• Large events
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THE COVID-19 PANDEMIC
Rural and outdoor destinations are
outperforming urban destinations.
Weekly travel spending (week ending July 25th)Percent year-over-year change
Sources: Tourism Economics; US Travel
Impacts by state
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Atlanta
Boston
Chicago
Dallas
Denver
Detroit
Oahu
Houston
Los Angeles
Miami
Minneapolis
Nashville
New Orleans
New York
Anaheim/Santa Ana
Orlando
Philadelphia
Phoenix
San Diego
San Francisco
St Louis
Seattle
Tampa
Norfolk/Virginia Beach
Washington, DC
Montreal
Toronto
Vancouver
40%
50%
60%
70%
80%
90%
100%
55% 60% 65% 70% 75% 80% 85% 90%
Do
mes
tic
Shar
e
Transient Share
THE COVID-19 PANDEMIC
Recovery rates will largely depend on a
destination’s market mix.
Hotel room demand by customer typeShare of 2019 room nights sold
Sources: Tourism Economics; US Travel
Impacts by destination
Most resilient mix
Least resilient mix
Destinations with high share of domestic and
transient visitors will recover faster, along
with destinations with recreation
opportunities that allow for social distancing.
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THE COVID-19 PANDEMIC
Mobility data shows the impact the
pandemic has had on consumer
behavior.
Google mobility data for retail and recreation areasPercent change compared to a five-week period in January and February
Sources: Google Community Mobility Report
Mobility impacts
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
Mar Apr May Jun Jul Aug
GA
USAGoogle mobility data shows the impact the
pandemic has had on consumer behavior.
Visits to retail and recreation venues remain
well below their pre-pandemic levels*, and
while Georgians were more mobile than the
average US resident for much of the year,
they have fallen slightly behind recently.
*note that this comparison is to a five-week period in January and February, so in a typical year visits to retail and recreation would be much higher than 0%.
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THE COVID-19 PANDEMIC
Room revenue has fallen sharply, but
Georgia is doing better than the US.
Room revenue in Georgia and the USPercent change compared 2019
Sources: Google Community Mobility Report
Hotel impacts
-100%
-80%
-60%
-40%
-20%
0%
20%
Feb Mar Apr May Jun Jul Aug
Georgia
United States
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THE COVID-19 PANDEMIC
Room revenue will not recover until
2023 or 2024, a much slower recovery
than the prior recession.
Room revenue recovery comparison – 2008 vs 2020Quarters relative to trough, level relative to prior peak
Sources: Google Community Mobility Report
Hotel impacts
SCENARIO OVERVIEW
20
THE SCENARIO OVERVIEW
The scenarios vary in the degree of virus
containment and the rate of economic
recovery.
We developed three scenarios to determine a range of possible impacts
Scenario Virus-related inhibitions on travel Key economic indicators(forecast current as of August 27th, 2020)
Economic
dragVirus drag
Upside• Virus moderately contained, travel restrictions continue to ease • Peak national unemployment rate 13.0% - 2020 Q2
• Traveler risk aversion remains moderate to high through 2020 • National GDP declines 3.2% in 2020
• GDP returns to 2019 Q4 level in 2021 Q1
• Virus contained in some regions, however many restrictions and containment measures remain through 2020
• Peak national unemployment rate 13.0% - 2020 Q2
Baseline • In some areas, groups permitted to meet with modifications, but risk
aversion reduces attendance• National GDP declines 4.0% in 2020
• GDP returns to 2019 Q4 level in 2021 Q4
• Virus not well contained, many restrictions and containment measures remain in place in 2021
• Peak national unemployment rate 17.0% - 2021 Q1
Downside • Very limited group travel, greater risk aversion, many public places
closed/limited, restaurants more limited• National GDP declines 4.6% in 2020
• GDP returns to 2019 Q4 level in 2024 Q2
• All scenarios assume that a vaccine will be widely available in 2021.
• Downside risks are greater than upside possibilities, so the Upside
scenario is closer to the Baseline than the Downside.
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THE SCENARIO OVERVIEW
Key guideposts for the next 18 months
• Recovery has begun (notwithstanding the risks).
• Economic recovery has plateaued but will accelerate as virus is contained.
• Performance by destination will be incredibly disparate for the next nine months.
• Georgia will approach normalcy in the second half of 2021 with full recovery in 2024.
• Recovery timeline in individual regions will be largely a function of:
1. Pandemic exposure;
2. Travel market exposure (drive, leisure); and
3. Ability to pivot to recovering market segments.
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THE SCENARIO OVERVIEW
In all scenarios, recovery will be a multi-
year process, spending will not reach
2019 levels until 2023 at the earliest.
Room revenue in Georgia and the USPercent change compared 2019
Sources: Google Community Mobility Report
Spending overview
$0
$5
$10
$15
$20
$25
$30
$35
2016 2017 2018 2019 2020 2021 2022
Historical
Upside
Baseline
Downside
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THE SCENARIO OVERVIEW
In the Upside and Baseline Scenarios,
recovery continues, albeit at a slower
pace than the summer months. In the
Downside Scenario, the recovery
stagnates.
Room revenue in Georgia and the USPercent change compared 2019
Sources: Google Community Mobility Report
Monthly losses
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
J F M A M J J A S O N D J F M A M J J A S O N D
Upside
Baseline
Downside
2020 2021
THE UPSIDE SCENARIO
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THE UPSIDE SCENARIO
Losses in 2020 amount to 31% of all
spending or $10.1 billion.
Upside Scenario COVID-19 related losses in GeorgiaDollar figures in millions, comparison to 2019 figures
Sources: Tourism Economics; STR; US Travel
Summary data
2020 2021 2022
Economic impacts
Lost visitor spending, $ $10,144 $4,231 $2,116
Lost visitors spending, % 31% 13% 6%
Lost jobs 62,537 26,085 13,042
Lost wages $2,848 $1,188 $594
Lost state and local taxes $653 $272 $136
Hotel impacts
Lost room demand (000's) 11,303 2,120 905
Lost room demand, % 25% 5% 2%
Lost room revenue,$ $1,859 $744 $373
Lost room revenue, % 39% 15% 8%
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THE UPSIDE SCENARIO
Visitor spending losses peak in April at
63% of their 2019 level.
Upside Scenario COVID-19 related visitor spending losses in Georgia, 2020Losses compared to 2019
Sources: Tourism Economics; STR; US Travel
Monthly impacts
-4%
-10%
-38%
-63%
-52%
-41%
-33%-29%
-26% -24% -23% -21%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Losses peak at 63% in April
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THE UPSIDE SCENARIO
Room demand and room revenue
recover in 2023.
Georgia room demand and revenue in the Upside ScenarioRooms, millions Dollars, billions
Sources: Tourism Economics; STR
Monthly impacts
44.8
33.5
42.7 43.946.2
48.6
$4.8
$3.0
$4.1$4.4
$4.9
$5.4
$0
$1
$2
$3
$4
$5
$6
0
10
20
30
40
50
60
70
80
2019 2020 2021 2022 2023 2024
Th
ou
san
ds
Th
ou
san
ds
Room demand (000's) (left axis)
Room revenue (right axis)
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THE UPSIDE SCENARIO
ADR recovers in 2023, while occupancy
rate and RevPAR recover in 2024.
Georgia hotel sector KPIs in the Upside ScenarioDollars Occupancy rate
Sources: Tourism Economics; STR
Monthly impacts
65%
48%
59% 60%62%
65%
$107
$88$95
$101$109
$116
$70
$43
$56 $61$66
$72
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2019 2020 2021 2022 2023 2024
ADR (left axis)RevPAR (left axis)Occupancy rate (right axis)
THE BASELINE SCENARIO
30
THE BASELINE SCENARIO
Losses in 2020 amount to 33% of all
spending or $10.8 billion.
Baseline Scenario COVID-19 related losses in GeorgiaDollar figures in millions, comparison to 2019 figures
Sources: Tourism Economics; STR; US Travel
Summary data
2020 2021 2022
Economic impacts
Lost visitor spending, $ $10,864 $5,411 $3,228
Lost visitors spending, % 33% 17% 10%
Lost jobs 66,974 33,359 19,899
Lost wages $3,050 $1,519 $906
Lost state and local taxes $699 $348 $208
Hotel impacts
Lost room demand (000's) 11,733 3,717 1,704
Lost room demand, % 26% 8% 4%
Lost room revenue,$ $1,921 $952 $567
Lost room revenue, % 40% 20% 12%
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THE BASELINE SCENARIO
Visitor spending losses peak in April at
67% of their 2019 level.
Upside Scenario COVID-19 related visitor spending losses in Georgia, 2020Losses compared to 2019
Sources: Tourism Economics; STR; US Travel
Monthly impacts
-5%
-11%
-40%
-67%
-55%
-43%
-35%-30% -29% -27% -26% -25%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Losses peak at 67% in April
32
THE BASELINE SCENARIO
Room demand recovers in 2023 while
room revenue recovers in 2024.
Georgia room demand and revenue in the Upside ScenarioRooms, millions Dollars, billions
Sources: Tourism Economics; STR
Monthly impacts
44.8
33.0
41.1 43.145.5
48.0
$4.8
$2.9
$3.9$4.2
$4.7
$5.2
$0
$1
$2
$3
$4
$5
$6
0
10
20
30
40
50
60
70
80
2019 2020 2021 2022 2023 2024
Th
ou
san
ds
Th
ou
san
ds
Room demand (000's) (right axis)
Room revenue (left axis)
33
THE BASELINE SCENARIO
ADR recovers in 2023; RevPAR and
occupancy rate do not recover by 2024.
Georgia hotel sector KPIs in the Upside ScenarioDollars Occupancy rate
Sources: Tourism Economics; STR
Monthly impacts
$107
$87$94 $99
$107$114
$70
$42
$53 $58$64
$69
65%
48%
57% 59%61%
64%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2019 2020 2021 2022 2023 2024
ADR (left axis)RevPAR (left axis)Occupancy rate (right axis)
THE DOWNSIDE SCENARIO
35
THE DOWNSIDE SCENARIO
Losses in 2020 amount to 35% of all
spending or $11.5 billion.
Baseline Scenario COVID-19 related losses in GeorgiaDollar figures in millions, comparison to 2019 figures
Sources: Tourism Economics; STR; US Travel
Summary data
2020 2021 2022
Economic impacts
Lost visitor spending, $ $11,557 $8,195 $5,322
Lost visitors spending, % 35% 25% 16%
Lost jobs 71,245 50,523 32,811
Lost wages $3,244 $2,301 $1,494
Lost state and local taxes $744 $528 $343
Hotel impacts
Lost room demand (000's) 12,221 8,651 5,242
Lost room demand, % 27% 19% 12%
Lost room revenue,$ $1,975 $1,440 $934
Lost room revenue, % 41% 30% 19%
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THE DOWNSIDE SCENARIO
Visitor spending losses peak in April at
70% of their 2019 level.
Upside Scenario COVID-19 related visitor spending losses in Georgia, 2020Losses compared to 2019
Sources: Tourism Economics; STR; US Travel
Monthly impacts
-5%
-12%
-42%
-70%
-57%
-45%
-36%-32% -30% -30% -29% -29%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Losses peak at 70% in April
37
THE DOWNSIDE SCENARIO
Room revenue recovers in 2024; room
demand recovers in 2025.
Georgia room demand and revenue in the Upside ScenarioRooms, millions Dollars, billions
Sources: Tourism Economics; STR
Monthly impacts
44.8
32.636.1
39.542.0
44.5
$4.8
$2.8
$3.4
$3.9
$4.3
$4.8
$0
$1
$2
$3
$4
$5
$6
0
10
20
30
40
50
60
70
80
2019 2020 2021 2022 2023 2024
Th
ou
san
ds
Th
ou
san
ds
Room demand (000's) (right axis)
Room revenue (left axis)
38
THE DOWNSIDE SCENARIO
ADR recovers in 2024, while RevPAR
and occupancy rate recover in the later
half of the decade.
Georgia hotel sector KPIs in the Upside ScenarioDollars Occupancy rate
Sources: Tourism Economics; STR
Monthly impacts
$107
$87$93
$98$107
$115
$70
$41$47
$53$58
$64
65%
47%50%
54%57%
59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
2019 2020 2021 2022 2023 2024
ADR (left axis)RevPAR (left axis)Occupancy rate (right axis)
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