Original Reporting: Local financial fallout of COVID-19

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(WSPA) – Just weeks into South Carolina’s pandemic response, the financial fallout has been massive.

The Upstate lost hundreds of millions of dollars in business revenue and new city and county budget projections show that damage will take years to recover.

It was March 18 when South Carolina restaurants closed their dining rooms, sent staff home and began a desperate fight to survive.

“This situation has been devastating. It’s been dire,” Chris Stone, of Visit Greenville South Carolina, the city’s tourist bureau, said. “It’s had real impact on workforces and ownership groups. It’s a fragile industry to begin with.”

Normally this time of year, travelers fill about 75% of Greenville’s hotel rooms. That’s down to about 25% now. Those visitors are clustered mostly around the interstate as they pass through.

The decline represents about 7,500 fewer visitor a day, costing the city about $1.8 million a day and $54 million each month.

Even when the dining rooms reopen, it will take a long time to break even.

“In 2001 with 9/11 we had about a 12-month period to get back to even. With the last financial crisis it took us about 36 months, about three years to get back to even, and we could be looking at least on that scale,” Stone said. Even people not affiliated with the hospitality industry will likely suffer the losses. That’s because city and county governments will lose millions in tax revenue from “hospitality” and “accommodations” taxes. In Greenville, the “hospitality tax” is valued at 2% of prepared meals and drinks.

Losing that money will delay some public projects.

In the current Greenville budget, the city planned to bring in more than $12 million in hospitality tax. New projections show that revenue down about $24%, a loss of about $3 million.

Projections for the next budget year are even more dire. The city expects revenue from that tax to drop more than 42%.

“The city understands that the way we do business may be permanently altered when it comes to large events when it comes to conventions,” city spokesperson Beth Brotherton said.

Large events doesn’t just mean conventions and parties. Think of public parks.

Greenville is already planning to stall development of “unity park.” Most cities and counties are making similar contingency plans.

In Spartanburg County, the hospitality tax paid for things like the new lighting at McMillan Park in Boiling Springs. It promotes tourism by attracting soccer or lacrosse tournaments.

The county expects to fall about $1 million short in hospitality tax revenue this budget year, representing about $50 million dollars lost in restaurant revenue.

There may be steeper declines ahead.

“We’ve gone through and reevaluated the timing of those projects and effectively we have delayed the scheduling of those kinds of projects by a year or so,” Cole Alverson, the Spartanburg County Administrator, said.

“We’re not ready. We’re not open for tomorrow or the day after that or the day after that, but one of these Mondays, one of these weeks, the coast will be a little clear and maybe we’ll find people want to get out,” Stone said.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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