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All Signs Point To A Tough Winter For Indiana Restaurants And Tourism

A new study shows the dire straits faced by the hospitality industry as winter sets in.

Photo by Marina Shemesh

It doesn’t take an expert to observe that more than nine months into the pandemic, amid closure after closure of beloved local shops and restaurants, the Indiana hospitality industry is in crisis. But new research from Ball State University shows exactly how convention tourism, an industry that brings in $725 million in state and local taxes annually, has suffered major blows.

Sotiris Hji-Avgoustis, a professor of hospitality and food management at Ball State University, has been researching the pandemic’s effects on the restaurant and events-tourism industry in the Indianapolis area and across the state. He’s found that pandemic safety guidelines and plunging demand have kneecapped a crucial state industry, with staffing levels at a paltry 70 percent of their peak. 

“When people say they’re going to go out of business, they’re really going to go out of business,” Hji-Avgoustis said. “It’s not just an empty threat. It’s going to happen.”

Hji-Avgoustis said that because some counties and municipalities have enforced more stringent pandemic restrictions than others, the losses have been uneven. If neighboring local governments communicate and work to standardize their guidelines, he said, both the restaurant industry and the general public would stand to gain.

When neighboring counties enforce different COVID-19 restrictions, Hji-Avgoustis said, the discrepancy undermines those public health measures and arbitrarily punishes businesses. “You don’t want a restaurant in Hamilton County to attract people from Marion County because of the restrictions there, and then they go back to Marion County, and in reality, nothing changes,” he added. The researcher said that ultimately, Indiana needs to get transmission levels under control, and that as long as the threat of COVID-19 looms many potential customers will be reluctant to dine out.

He pointed out how the local food scene in downtown Indianapolis has long been an engine of tourism, with Indiana’s restaurant and dining industry injecting about $13 billion into the state economy each year. But beyond that, he added, local dining is a source of community pride. “We, as residents,” Hji-Avgoustis said, “become proud of what our city has to offer.”

When beloved local restaurants shut down, he said, unique new joints aren’t guaranteed to crop up in their place. Local restaurants are often run by industry veterans who have risen through the ranks of restaurant work and staked their personal savings on the venture. According to a survey from the Indiana Restaurant and Lodging Association, 41 percent of restaurant owners said they might shut down by the end of 2021.

Hji-Avgoustis said he’s heard from former students who have since graduated and devoted their careers to the restaurant industry of restauranteurs fleeing the industry en masse, opting for more secure fields of work. He worries that Indianapolis’s distinctive local restaurant landscape will give way to run-of-the-mill chains and franchises.

And when would-be tourists opt to stay home, it’s not just the hotels that suffer. Demand for restaurants dries up and museum attendance declines. Visit Indy estimates that each year Indianapolis’s convention tourism generates about $5.5 in revenue and $725 in state and local taxes, but this year a series of notable conventions were called off to prevent COVID-19 super-spreader events.

Still, Indianapolis has gained an unexpected tourism edge from a business that’s flourished during the pandemic: delivery services. Amazon and FedEx operations, housed just south of Indianapolis, are attracting truckers to the area, Hji-Avgoustis said, especially as the pandemic drives people to online shopping. When those drivers need somewhere to stay for the night, they’re often turning to nearby hotels, filling up rooms that would’ve otherwise sat empty. The unexpected bump in visitors has mostly been contained to economy hotels, he noted, with drivers just passing through being unlikely to book rooms in mid-scale or luxury hotels.

Hji-Avgoustis understands that lawmakers face tough tradeoffs amid the pandemic, tending to their constituents’ physical wellbeing as well as their financial security. But he worries the concerns of the hospitality industry have fallen by the wayside, risking the community’s economic and cultural future.

“You need both,” he said. “You need to make sure everybody stays safe. But at the same time, we want to be able to allow our residents to make a living — to be able to afford to pay their rent or their mortgage or their insurance rates or their medical expenses. And right now, it’s imbalanced.”

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