Rebounding visitor stats generate optimism in hospitality industry

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If downtown’s pandemic recovery had a report card, its tourism grade would be a B.

And that’s not a subjective assessment. It’s based on newly released 2022 convention and tourism data.

Consider that:

The hotel occupancy rate in 2022 was 86% of the number it was in 2019, the year before the pandemic.

The number of conventions, meetings and events was 82% of the number in 2019.

Attendance at the attractions at White River State Park—which includes the Indianapolis Zoo and the Indiana State Museum—was 87.5% of 2019’s figures.

The number of visits to downtown, as measured by location intelligence software, was 85.5% of 2019.

The metrics fall short of a champagne-popping “return to normal” proclamation—or an A+ on the proverbial report card—but they’re close enough for tourism and hospitality experts to be bullish about downtown as a place where people visit for work and play.

In fact, Michael Cranfill, owner of The District Tap, 141 S. Meridian St., offered an even stronger assessment.

“I would say downtown Indianapolis is 100% back and open for business,” he said.

Cranfill represented restaurants and bars on the Indy Tourism Recovery Task Force formed in April 2020. He said the city’s ability to host more than a dozen events in July and August of 2020—making Indianapolis one of the few U.S. cities to consistently welcome youth basketball events and other gatherings during that era of the pandemic—signaled a commitment to bouncing back.

“When other cities were saying, ‘Sorry, we can’t,’ Indianapolis figured out ways to make things happen,” Cranfill said. “We showed people how great of a city Indianapolis is to host an event of any kind. How convenient it is. How economical it is. How walkable everything is.”

Mandy Hazlett

But even as the overall comeback statistics seem remarkably consistent, the impact on specific restaurants, entertainment venues and organizations has been inconsistent.

For example, Mandy Hazlett, associate director of convention and events at the Indianapolis-based National FFA Organization, said 2022 topped 2019 for attendance at the massive gathering of adolescents annually downtown.

But Indianapolis Symphony Orchestra CEO James Johnson said that, while his organization is on the comeback trail, it’s still some distance from its destination.

And Gen Con, another of the city’s biggest conventions, reported attendance of roughly 50,000 in 2022, up from 35,000 the year before but less than the 70,000 in 2019 when the event hit a record.

Chris Gahl

When gauging the health of tourism downtown, though, Visit Indy Vice President Chris Gahl said he checks the pulse of hotel occupancy rates.

The measurement of “heads in beds” translates into a significant chunk of time spent in Indianapolis, he said.

It’s good for the local economy when someone bounces in to catch Giannis Antetokounmpo and the Milwaukee Bucks play the Pacers before driving home after the game, but it’s even better when people make arrangements for spending mornings, afternoons and evenings here.

“If individuals are arriving either by car or by plane and checking into our hotels, they are going to be generating visitor-related spending,” Gahl said. “They’re more likely to eat at restaurants, shop, and take Ubers and Lyfts. They’re more likely to take in an attraction or a show.”

In 2022, the occupancy rate for downtown’s 8,488 hotel rooms was 61.7%. In 2019, it was 71.7%.

A stronger comeback for Indianapolis conventions would boost the occupancy rate, said Mike Wells, president of Carmel-based REI Real Estate Services, co-owner of the Indianapolis Marriott Downtown with White Lodging.

The hotel occupancy rate in Indianapolis has fallen behind other cities where REI does business, Wells said.

“We all know that Indianapolis is very much dependent on conventions, and conventions have been one of the slower segments of the market to come back,” he said. “It’s not necessarily surprising, but it’s not exactly helpful.”

Wells said he’s optimistic about convention business in 2023. According to Visit Indy projections, Indianapolis will host 575 conventions, meetings and events after hosting 558 in 2022.

“We’re seeing a trend where more groups are getting the confidence to put meetings back on the agenda,” Wells said. “It’s just taken longer than many of us had hoped.”

The number of hotel rooms downtown grew by 900 from 2019 to 2022, and visitors paid an average of $13.97 more for a nightly stay in a downtown hotel in 2022 than they did in 2019 ($180.68 vs. $166.71).

Among the new hotels, Bottleworks Hotel, 850 Massachusetts Ave., opened with 140 rooms in 2020, and Hotel Indy, 141 E. Washington St., opened with 90 rooms in 2021.

“It’s a good sign that we’ve added hotel rooms into the inventory, and they’re being absorbed and being occupied,” Gahl said.

Hotels commanded a higher average nightly rate in 2022, he said, because Indianapolis hosted high-profile events such as the College Football Playoff National Championship and the NFL Scouting Combine, which allowed fans to watch the player workouts for the first time in the event’s 40-year history. Hotel rooms for the events are significantly higher, driving up the average.

The 2023 NFL Scouting Combine will return Feb. 28 to March 6. Other big Indianapolis gatherings this year include the Fire Department Instructors Conference (April 24-29) and Gen Con (Aug. 3-6).

‘Clamoring to come back’

Downtown Indy Inc. uses location intelligence software to tally the number of visits to downtown, with boundaries roughly defined as 16th Street to the north, I-65/I-70 to the east and south, and the White River and Miley Avenue to the west.

Excluding downtown residents and members of the workforce, 49.1 million visits were documented in 2022. In 2019, the number was 57.4 million.

White River State Park—which includes the zoo, state museum, Victory Field, Eiteljorg Museum, TCU Amphitheater, Imax Theatre and NCAA Hall of Champions—had 2.8 million visitors last year, compared with 3.2 million in 2019.

Jake Oakman

To Jake Oakman, who began his tenure as executive director of the White River State Park Commission in January 2022, that’s a win.

“I think people were clamoring to come back,” Oakman said of the first full year without pandemic restrictions. “We didn’t have to do too hard of a sales job to get people to come back to any of our events.”

The Indiana Convention Center and downtown sports stadiums have also experienced a bounce-back.

Last month, about 20,000 people gathered downtown for a youth volleyball event.

Out-of-state visitors told IBJ that Circle Centre Mall “seems a little abandoned” and that restaurants such as Primanti Bros., which closed near the intersection of Illinois and Maryland streets in June 2020, are missed.

But Adam Speight, a volleyball coach from suburban Columbia, South Carolina, said downtown resembles what he encountered during visits for tournaments before the pandemic.

“There are other tournaments we could go to, and we come to this one for a reason,” Speight said. “We love the tournament, and we actually like the downtown area. It’s everything we liked pre-pandemic.”

Terry Anthony, who owns The Block Bistro & Grill at 115 W. Market St., less than three blocks from the convention center, said those kinds of events have kept him in business.

“Almost every weekend, if not every weekend … we have something that’s coming through here that gives us an opportunity to go out and gain some revenue,” Anthony said.

But on days when the convention center doesn’t host events, concerts aren’t scheduled at Gainbridge Fieldhouse, or the Colts and Pacers aren’t playing at home, business can be challenging for restaurants, including The Block. So, too, for Social Cantina, which opened six months ago along Georgia Street in a spot formerly occupied by Mikado Japanese Restaurant.

Social Cantina—which customers can see as they exit the convention center—is owned by Finney Hospitality Group, a company that also owns The Tap, at 306 N. Delaware St.

Chris Martin

Chris Martin, Finney’s vice president of operations, said The Tap has thrived since the end of pandemic lockdown, thanks in part to the craft beer bar’s proximity to a booming residential population near Mass Ave.

But at Social Cantina, day-to-day activity varies, Martin said.

“You can tell right away that the residential stability is not there,” he said. “Office population is not consistent for lunches. Conventions are kind of the same way. It depends on how Georgia Street is activated during those events.”

Martin said the goal is to build a consistent following among people who live within the Indianapolis metro area.

“I don’t think the business model will work if you’re dependent solely on [out-of-state] visitors coming to downtown Indianapolis,” he said. “It has to be an important part of your overall business plan, but if you’re saying, ‘Hey, I’m going to survive because of that,’ you shouldn’t be downtown.”

Indianapolis Symphony Orchestra is an organization that relies on central Indiana audiences.

Johnson, the orchestra’s CEO since 2018, said some patrons remain hesitant about attending performances at Hilbert Circle Theatre, on Monument Circle.

When comparing ticket revenue for fiscal years that ended in August 2019 and August 2022, the ISO can’t claim a “B” grade for its comeback. The difference between 2019’s $11.1 million in sales and $7.1 million in 2022 is a 36% decrease.

James Johnson

Yet Johnson said he’s encouraged by the 33,000 tickets purchased for December’s “Yuletide Celebration” shows and a January sellout at the 1,600-capacity Hilbert venue for a show that brought together music by Beethoven and Coldplay.

“We’re seeing some very nice signs of return,” Johnson said. “If we had this conversation six months ago, I’d have been more pessimistic. But people are coming back. We’re definitely on an upswing.”

Having people in seats is imperative, he said.

“We are about live events,” Johnson said. “For us, it’s about being in person, and the power of live music speaks to being in the room with the musicians. There’s no substitute for that.”

Perceptions of safety

But the orchestra and other organizations that rely primarily on a regional audience are dealing with another problem: perceptions about crime.

In the orchestra’s recently published annual report, Johnson devoted part of his CEO’s letter to the issue, saying, “We cannot overlook the impact of perceptions about the safety and security of downtown. This remains a focus of our ongoing work with city leaders.”

To help concert attendees feel at ease, the orchestra added security screenings in 2021, and security personnel are present at all events.

“There are incidents that are part of being downtown in close proximity,” Johnson said of crime in the area. “Sometimes those get magnified, and it creates an atmosphere of some fear and trepidation. Whether that’s accurate, it happens. We don’t want any patron to feel uncomfortable at any time. We do everything we can to make our facility and our events inviting and where you do feel safe.”

White River State Park leader Oakman said he would encourage area residents to visit downtown to gain a first-person perspective of the safety situation.

“We’re located in the middle of an urban area,” he said. “We have some of the challenges that a number of large cities face. But I think the perception [of crime] may be worse than reality when it comes to the downtown area.”

Martin said crime isn’t prevalent near The Tap or Social Cantina.

“I do not see or hear of a lot of random acts of violence in this downtown area,” he said. “Crime that’s happening on the fringe of downtown Indianapolis gets associated back to the streets of true downtown. We’re very comfortable with our managers and team members living and working downtown.”

Robert Leitner, a resident of suburban Louisville, has attended at least five years of Indianapolis volleyball events in the role of father of a player, and said he’s comfortable when visiting here.

“I feel I can take my kids out at night and enjoy the scenery,” Leitner said.

Indianapolis Metropolitan Police Department statistics show that downtown is one of the safest areas of the city. But crimes that happen downtown tend to attract more attention—especially when they involve visitors.

Last year, a Dutch soldier died and two others were injured when they were shot in the 100 block of South Meridian Street near the Hampton Inn where they were staying. The incident, which took place at about 3:30 a.m. after the men visited a downtown club, made international news.

Police arrested a 22-year-old Indianapolis man and charged him with one count of murder and two counts of attempted murder.

The shooting happened just a couple of blocks from a bar district that has become notorious for fights, recreational drug use, underage drinking and other problems. The site is also just blocks from Gainbridge Fieldhouse and the Indiana Convention Center.

The District Tap is at the corner of Meridian and Georgia streets, which connects the convention center to the fieldhouse. Cranfill, The District Tap’s owner, praised police efforts to improve late-night conditions in the area.

“So much improvement has occurred in the last year to push out people who are looking for trouble downtown,” he said.

Two South Meridian Street bars—Taps & Dolls and Tiki Bob’s Cantina—exited the nightlife scene. The Indiana Alcohol and Tobacco Commission revoked the liquor license of Taps & Dolls last March.

After shots were fired outside Tiki Bob’s this month, the bar’s ownership contacted police and shared their plans to cease operations, IMPD officer Genae Cook told IBJ. No one was injured in the incident, Cook said.

“I think Tiki Bob’s is rather notorious as a problem spot for the South Meridian Street area, and I think its closure is not only warranted but probably helps go a long way for the continued revitalization the city is making along South Meridian Street,” Indianapolis Mayor Joe Hogsett told IBJ. “I welcome the news that a problem spot may be remedied.”

The 9-to-5 world

The convention and events schedule remains key for The District Tap, The Block Bistro & Grill and other restaurants as remote work has kept the office return at something lower than a B grade.

But Cranfill said he’s also seen a midday upswing at The District Tap’s cash registers.

“On the days when there isn’t something going on downtown, what would have been a $5,000 or $6,000 day a year ago is now a $7,000 or $8,000 day,” said Cranfill, who opened The District Tap’s downtown location in September 2019. “It’s part of people figuring out who we are, and there does seem to be more people downtown.”

Gahl said Visit Indy seeks a busy downtown as part of his organization’s role as a caretaker of the city’s brand. At the same time, he said in-office work isn’t a significant influence on tourism.

“Through the lens of a visitor, the Indianapolis Symphony Orchestra has the same caliber of performance on their stage, day in and day out,” Gahl said. “To a visitor, the JW Marriott’s hotel rooms and restaurants are welcoming and delicious, regardless of how many people are coming downtown to work.”

That’s true for the FFA, which had nearly 69,600 people—mostly students wearing trademark blue corduroy jackets—attend its national convention last fall, compared with about 68,400 in 2019.

Hazlett, the FFA’s associate director of convention and events, said downtown’s atmosphere last October resembled the atmosphere of past years. The national convention will be held in Indianapolis through at least 2033.

“We take over so much of the city that our attendees probably don’t notice that there are businesses that aren’t operating back in person,” Hazlett said. “They’re not going to notice that people aren’t downtown working at Anthem or Salesforce. They’re only going to notice if they can’t get a hamburger at Steak n Shake.”•

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