Summer Tourism Outlook

It’s gonna be a bummer summer and a big economic hit, but Santa Fe aims to survive

It feels like the reality of the pandemic for summer is just starting to sink in now that the weather is finally warm enough to wear a sundress and businesses have cautiously begun to reopen.

Life might be slowly starting back up again, but it will never be the summer we had planned.

There will be no family pool parties under the red and white mushroom caps of the Bicentennial Pool, no free concerts at the Railyard and no fancy nights out at the Santa Fe Opera. No stuffing our faces with fry bread at Indian Market or buying hats at the International Folk Art Market. No Pride. No Fiestas. No soccer games on the Downs or movies in the park. Zozobra still wants to party, but he might be kind of lonely.

COVID-19 has burst all of our bubbles and rained on all our parades.

Some of these highlights primarily benefit locals, but some also serve as star -attractions for the estimated 1.2 million visitors who usually flock to Santa Fe between May and October whose dollars fuel the economy and provide stable jobs.

The list of canceled events is so long that many owners of hotels, restaurants and galleries anxiously await whether enough visitors will show up to keep them in the black this summer. It's going to be a bummer, they all agree, but at the same time, the region is repositioning its marketing toward remoteness and relative safety, as well as a focus on visitors who are more local.

"Is it going to be like it's been any other summer before? Heck, no. It's going to be fewer people and there will not be big crowds. There won't be big festivals and concerts. But, you know, there's a lot of ways to still have art displays. People are going to be innovative in how they respond, and most importantly it's still a beautiful place to be," says Jenny Kimball, the chairwoman of the board of the La Fonda hotel on the Plaza. "I think Santa Fe hopefully will fare better than a lot of other places just because of our safety practices…and it being more of a drive destination than a plane destination. But, you know, only time's going to tell. There is no playbook for this."

Recovering the Santa Fe economy this summer will largely depend on how willing people are to venture out into the world and spend money on vacations.

It also matters how and when the city's businesses reopen and what the overall state strategy becomes in the coming months. Officials don't want to lure too many people here but, without them, a major economic driver is missing.

Local compliance with public health orders, and probably some measure of good luck, means Santa Fe has managed to keep the numbers of infections to a minimum. As of Tuesday, Santa Fe accounted for only 133 of the 7,130 positive cases reported in the state. And luckily, COVID-19 can't take away Santa Fe's mountains, sunsets or history. The city's tourism industry aims to leverage these attributes in a strategy that paints the city as a tranquil and safe retreat from the chaos of the COVID-stricken world. But for now, small local businesses are just trying to survive long enough to see what the new normal might be.

Keeping heads above water

In the absence of the crowds that usually clog the sidewalks and cars moving at a snail's pace down the street, the quiet of the Sunday afternoon lends a fresh appreciation to the architecture of the historic adobe buildings that line Canyon Road. It's easy to imagine this street as it was decades ago when it was still just a neighborhood with a general store and a hardware shop. A bit later, artists began to take up residence here, living and working out of their studios before many of these, too, were replaced by galleries and art dealers in the area that gained acclaim as one of the most iconic art markets in the Southwest.

For Brad Smith, one of a handful of artists who still operates his own gallery and studio on Canyon Road, the shutdown has been both financially harrowing and artistically productive.

Large canvases with works he has completed since the shutdown are spread across the floor and hang on the walls of the front room. Out back, a partially completed painting lies in the driveway surrounded by pots and tubes of paint. His front door still has a "by appointment only" sign attached to it, despite state rules that allowed retailers to open at 25% capacity last week.

Smith says it's been hard to keep up with the frequent changes in national and state ordinances, and in the turmoil of trying to understand eligibility requirements and apply for government aid, he hasn't had the bandwidth to reopen. He's also struggled setting up an online store and virtual gallery tours like some of the larger galleries have done.

"I'm an artist, and so that's kind of almost out of my area of expertise. The way I've been able to be successful is people come here and they see my work and they buy it," he says. Yet, Smith is nervous about visitors who seem to ignore rules about face masks. The contradiction of relying on tourism and also being afraid of it makes this summer's prospects particularly daunting.

He's also felt discouraged watching his friends at El Farol restaurant next door go through several cycles of gearing up to reopen and bring employees back, only to be stalled once again by an extended closure order. Now, the restaurant is preparing to open its patio and dining room to half capacity on June 1.

El Farol employs 35 people who are all still on payroll due to a PPP loan, says restaurant manager Monica Walsh. She says the restaurant intends to keep all employees on board after it reopens, but that ultimately depends on the early days. The restaurant will offer a pared down menu of customer favorites and is training employees on new health procedures such as a daily temperature check.

"Just to break even to get by is our goal for the first two weeks of June… We have a good feeling that people are wanting to get out and that people are wanting to dine again," she says, noting that in the hours leading up to the interview with SFR, four people stopped by the restaurant to check when it would reopen. And while El Farol, like all the businesses on Canyon Road, relies heavily on tourists, it's the restaurant's base of Santa Fe regulars who Walsh is counting on to carry the business through, she says.

Dining and the arts are the city's most popular attractions and will suffer the most obvious losses if tourists decide to stay home this summer. The city's outdoor industry loses too.

Andrew Eagan, the owner of Santa Fe Jeep Tours, takes tourists out on adventures into places like Diablo Canyon and Elk Mountain.

At the height of a normal summer, he says, he gets about 20 customers a day, mostly retired couples who fly in from surrounding states. Since March, he's had to refund almost all of his summer bookings and is scrambling to shift his marketing toward RV drivers who arrive towing off-road vehicles.

Eagan tells SFR he's struggling to pay rent, utilities and the loans on his vehicles. Though he, too, applied for federal aid, he hasn't gotten any yet. Eagan says he knows of a couple other tour companies in town that don't expect to reopen at all.

"It's just really hard, you know, really emotional," Eagan says. "You put everything you have into one small dream and you think you're getting somewhere, and then out of nowhere that's just all gone. It's hard to wrap your head around it."

The economic driver

Eagan and Smith employ themselves and just a few other people. But the loss of tourist dollars at small businesses like these is multiplied exponentially across the city, state and tribes.

Santa Fe has more small businesses per capita than most cities in the country. Partly that's because the city's robust tourism industry can support them, says Bridget Dixson, president and CEO of the Santa Fe Chamber of Commerce. It's these small businesses that she's most concerned about when it comes to recovery.

The chamber recently conducted a survey of 262 establishments and found that among all businesses, including those not related to tourism, 29% said it would take them over six months to recover from the economic losses of the shutdown, even if everything went back to normal immediately.

According to a report by the New Mexico Tourism Department, the tourism industry employs 10,514 people, or 17.2% of the workforce in Santa Fe County. Lodging and accommodations, including second homes, made up 41% of visitor spending in 2018. Food and beverage came in second at 24.1%, followed by retail, transportation and recreation. Even more people are employed in industries indirectly boosted by tourism.

That translates into a significant chunk of change for local and state governments in the form of gross receipts, lodgers' and property taxes. Hotels and motels alone generated $10.5 million in lodgers' tax last year, and short-term rentals, which are still not permitted to house out-of-state residents as per the governor's orders, added nearly $2 million more. Randy Randall, the director of the city's tourism department, says he expects Santa Fe will lose $3 million in lodgers' taxes in fiscal year 2021 due to COVID-19.

Santa Fe city leaders say the budget for the year that starts July 1 has as large as a $100-million dollar hole between planned spending and new revenue estimates—and that could affect services, road and building projects and workers. 

The city's dependence on tourism is higher than the state overall, though the industry's impact on New Mexico is still significant. In 2018, 38.5 million visitors spent $7.1 billion in New Mexico. Officials say this spending sustains 8.5% of all jobs in the state.

"I'm greatly concerned about the economic impact of COVID-19," says state Tourism Department Secretary Jen Paul Schroer. "Tourism is the second largest industry of an economic driver for the state of New Mexico. The majority of visitor spending happens during spring and summer months in New Mexico."

Schroer, who has said it's not likely New Mexico will allow mass gatherings for a year or 18 months, notes the state conservatively estimates $6 billion in total visitor spending will be lost in 2020.

Gov. Michelle Lujan Grisham has said the state is on pace to reopen restaurants and hotels at 50% capacity on June 1. Spas, bars and casinos are also likely to open at that time, but there's no news yet about state museums.

Since mid-March, the state has also ordered anyone arriving by plane to isolate for 14 days. Tripp Stelnicki, a spokesman for the governor, tells SFR on Tuesday there's no word on whether that rule would soon to be lifted. In addition, he says,  "anyone arriving by car is strongly encouraged to self-isolate for 14 days; that hasn't changed either."

The administration released industry-specific guidelines and rules that include requirements for all employees and customers at all businesses to wear masks and maintain proper social distancing. Restaurants are required to keep logs of guests to aid in contact tracing if a patron tests positive for the virus. Hotels may only allow guests who live together to share rooms, and must shut down communal and spa areas. Guidelines for other businesses such as salons, theaters and casinos are supposed to be released later.

Mayor Alan Webber believes restoring visitor spending will be a key to the city's financial recovery from a major budget deficit. Public health policy, he says, plays a crucial role in restoring visitor confidence in the city. He's supporting a measure, heading for a final vote before the City Council in June, to make masks mandatory in public as a way to keep residents safe and encourage a tourism rebound.

"Because [the situation we are in] -derives initially from a public health emergency, that tells me that the right way to have a campaign that restores the economy is to demonstrate that we continue to do an excellent job of keeping a lid on the spread of COVID-19," the mayor said at a news conference on May 18. "Those two pieces are inextricably connected and the more we produce confidence in our ability to provide safety, health and security for residents and visitors, the more I think we can see the return of the economy being more robust."

A Safe Haven

Jennifer Madison and Dawne Lakey drove to New Mexico from Kansas City to pick up a bracelet they had commissioned from a local Navajo silversmith. Originally, they'd planned to meet up with the artist at an annual powwow in Kansas. When the event was canceled due to the pandemic, Madison and Lakey wanted to come to Santa Fe for Indian Market.

After Indian Market was canceled as well, they decided to take a road trip to pick up the bracelet directly from the artist and then swing by Santa Fe to see an old friend.

"We appreciate the safeguards the governor here has put in place. It seems like things are pretty responsive here and it feels pretty safe to be here," Madison tells SFR as the pair walked downtown Sunday.

Despite the notable absence of Native jewelers who normally line the portal and the empty bandstand that has been roped off to the public, visitors say the Plaza feels tranquil rather than abandoned.

"It's peaceful," says Modesto Melendrez, who drove in from Phoenix with his wife Yuritzy to visit family in Albuquerque. "Sometimes it's nice to have music and festivities, but sometimes you just want to come on a Sunday and walk around, sit down, eat an ice cream or something. It's beautiful just being here."

These words, "peaceful," "beautiful," "serene," were uttered at least a dozen times by the visitors who spoke to SFR on the Plaza, all of whom were here to see family or friends.

The qualities are exactly what make local business leaders and officials hopeful that people will still show up.

However, Schroer says the state department is not focusing on attracting tourists at the moment, but is rather reminding people what the state has to offer through an online experience campaign, while weaving the message about safety into marketing materials.

"Currently we are looking at just -normalizing the new social contract of wearing a mask, social distancing, focusing on the COVID-safe practices," Schroer says. The department is busy making these things seem like a normal part of life and culture in New Mexico, taking photographs of people in various tourist destinations wearing masks and standing the required distance apart.

Randall, of the city tourism department, thinks this strategy will attract people who are looking to get away from crowded urban areas or who want a change of scenery without putting themselves at risk—the apparent juxtaposition between encouraging tourism and encouraging only essential travel notwithstanding.

"People have a lot of choices of where they're going to go. I think right now, they clearly want it to be more enjoyable and different from where they are, but they also want to be sure that they're not getting themselves into a dangerous situation from the viral standpoint," says Randall. "We will be taking whatever efforts we possibly can on the city side to ensure that someone's visit here is not only enjoyable, but safe."

Hotels report interest from visitors in returning to Santa Fe. Lutz Arnhold, managing director of the Rosewood Inn of the Anasazi, tells SFR he's optimistic people will respond positively to branding about the luxury of peace and open space.

"I think guests come here in large numbers simply to retreat and to relax and get away from the large cities," he tells SFR.

Shroer tells SFR that a recent study by Lockwood International suggests most of the visitors Santa Fe can expect will be other New Mexicans or will drive in from neighboring states.

Even before the pandemic, Randall says, 80% of visitors drove to Santa Fe. He says the department's efforts are now entirely focused on regional drive markets which are dominated by Texas and Colorado but also include Arizona, Oklahoma and other nearby states.

The summer different

Dixson, who took over as Chamber of Commerce head in November, tells SFR she has received at least a dozen calls a day from people inquiring about coming to visit.

Like Kimball from La Fonda, who hopes the city will try things like closing off some small streets and allowing restaurant seating to spill out onto the sidewalks and into the street to give people more distance, Dixson sees a way through the pandemic by adapting to new circumstances.

"After this pandemic businesses are going to reemerge, but they're going to reemerge in different ways. And that's not necessarily a bad thing. Obviously, we -unfortunately are going to see a lot of businesses that are going to fold, and some will be the businesses that have been lucrative in the community for decades," Dixson tells SFR. "But I also think we have a lot of entrepreneurs that are strong and versatile and they'll find ways to adapt and we'll find ways to adjust to a new market."

Virtual events may become a trend that lasts beyond the closures. Performing artists and musicians, for example, will be some of the last to go back to their old routines and will need to find new ways to engage audiences via technology. There's no word, for example, about when entertainment venues will be permitted again.

"Losing Meow Wolf [this summer] is going to be a problem. It's going to hurt. We have all become very happy with the effect that Meow Wolf has had on our community," says Randall, naming the arts corporation that has drawn droves of visitors to its House of Eternal Return exhibition since it opened in 2016.

But Eagan, who owns Santa Fe Jeep Tours, is one person who is determined to make some money and give Santa Feans a new way to entertain themselves while he's at it, even if it's just in one small way. He tells SFR he's working on opening up a new drive-in movie theater at Santa Fe Place Mall.

At SITE Santa Fe, the plan is to reopen by the end of the fiscal year with the Displaced exhibition about immigration, forced migration and refugees that it began installing just before COVID-19 hit.

Phillips Director and Chief Curator Irene Hofmann tells SFR the museum has also learned something new from this period about how to engage patrons who live further afield. Most attendees of its virtual events are subscribers to the museum newsletter, but may live all over the country and can now participate in the activities of the museum in a new way.

The crisis has also made the museum very cognizant of the footprint left by its national and international resume of artists who have held exhibitions or events in the space. This year, she says, the museum will refocus its efforts toward the artists and art lovers who already call New Mexico home. "This year," she says, "I think, is really for the locals."

Note from the editor: An earlier version of this story misidentified the person walking with Charles Bennett and did not include the full title of the Rosewood Inn of the Anasazi.

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