Culture, tourism fund drop leads city to furlough 79 employees

Dickies Arena

Rick Mauch and FWBP Staff

The COVID-19 pandemic has caused a projected $14 million drop in the city’s Culture and Tourism Fund revenues for the current fiscal year, and the city’s Public Events Department will furlough 79 employees between May 16 and July 31.

The city announced the furloughs on Wednesday, May 6.

- FWBP Digital Partners -

In March and April, hospitality and venue tax collections collapsed, which in turn had a significant impact on the city’s Culture and Tourism Fund. Public Events Director Mike Crum estimated that it may take two to three years for the fund to recover to 2019 levels.

The future of meetings and conventions is unknown, with Crum predicting a 50% drop in attendance through the end of the current fiscal year in September, then a 30% drop into the following year. Also unknown: attendance at future sports and entertainment events as limits on mass gatherings continue. This could affect bookings and revenue for venues like Dickies Arena, the Fort Worth Convention Center, Will Rogers Memorial Center, Bass Hall and others.

For the next two fiscal years, the Culture and Tourism Fund will be able to meet its debt service obligation. However, future capital projects assisted by the fund will be suspended until a recovery is seen.

To help handle the significant decrease in funds, the Public Events Department is eliminating discretionary spending (part of a citywide effort), focusing on reducing labor expenses, eliminating temporary labor and forbidding overtime pay.

- Advertisement -

In addition, City Manager David Cooke said the city “has made the difficult decision to declare a continuous furlough period for employees in the Public Events Department. The designated furlough period will begin on May 16, 2020, and is expected to last through July 31, 2020. At this time, this is the only department that is part of the furlough.”

Crum said the city will rely on “maintaining Visit Fort Worth’s capacity to lead the recovery through effective sales and marketing.”

During Tuesday’swork session, the Fort Worth City Council received an update on how COVID-19 has affected culture and tourism in Fort Worth.

    In March and April hospitality and venue tax collections collapsed and indications are it may take two to three years for the culture and tourism Funds to recover. For Fiscal Years 20-22, the CT funds can meet their debt service obligations. However, future CT-funded capital projects are suspended until tax revenue recovery estimates are developed.

- Advertisement -

    Also among takeaways, the report stated the Public Events Department must reduce its reliance on occupancy tax as part of CT funds recovery strategy. It also stated it is imperative to maintain Visit Fort Worth’s capacity to lead the recovery through effective sales and marketing.

    The projected total impact on Fort Worth’s culture and tourism is down 32% from 2019.

    There is a lot of speculation on the recovery, but no firm data yet. Transient business is being touted as the best opportunity to start recovery.

    Meanwhile, the future of conventions and meetings business/attendance is an unknown, as is the future of sports and entertainment event attendance when those do return.

    The Fort Worth Convention Center has 67 events booked so far for Fiscal Year 2021 and the Will Rogers Coliseum has 132 events booked.

    Hospitality tax collections have dropped from over $2.6 million in March to an estimated $846,000 in April and $282,201 in May. Also, projected finance zone collections have dropped significantly, from March’s $622,726 to an estimated $220,000 in April and $55,000 in May.

    The story is the same across the U.S. Studies show in March 16.9% of hotel staff was terminated, while resort hotels showed a 90% reduction of employees per hotel.

    Fort Worth, however, has fared better than numerous other large cities. The city has seen a reduction of 45% in occupancy, compared to 62% for Houston, 65% for Dallas and Phoenix, 70% for Chicago, 82% for New Orleans, and 85% for Orlando.

    As part of an effort to help, Visit Fort Worth requested a funding decrease. The organization is being positioned to lead recovery and preparation is being done to resume sales and marketing activities, taking advantage of Fort Worth’s strength as a drive-in market.

    To account for the funding decrease, VFW reduced its full-time employees by six; reduced its visitor center operations and eliminated part-time staff; implemented a new program initiative to generate more local leads in medical, aviation and logistics and Hispanic segment initiative; and made a 90% reduction in international marketing efforts.