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- Spring breaks and summer vacations usually spell the beginning of good summer fun and good feelings about what's to come.

I'm Chris William, and welcome again to the most widely watched and longest running program on Carolina business policy and public affairs, seen every week across North and South Carolina for more than three decades now.

In a moment, we do it about this time of year and that's bring together the tourism chiefs for North and South Carolina.

It's Wit Tuttell and Duane Parrish, we sit down and start a dialogue about all of the challenges around what will happen in the tourist season given all of our current challenges, and we start right now.

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(upbeat music) On this edition of Carolina Business Review, Duane Parrish, director of the South Carolina department of parks recreation and tourism, and Wit Tuttell, executive director of Visit NC.

(upbeat music) - There is always a good sense and a good feeling as we head into, just not Easter and spring break, but also we know that right around the corner, it is going to be toes in the sand at summer vacation.

So, we always like right around this time of year, have the dynamic duo in tourism, excuse me gentlemen, that's not meant to be anything disparaging, but they are not just friends but competitors in a friendly way and heads of tourism by the way, for the Carolinas.

From North Carolina, Wit Tuttell, from South Carolina, Duane Parrish.

Gentlemen, welcome to the program.

Are you excited this year?

- Yes.

- Yes.

It feels normal.

- It feels normal, yeah.

Well good, it's kind of good to be back to normal, except, for this rate of inflation and the cost of fuel, while it's run up quickly, I don't get the sense from anyone, it's gonna drop quickly.

Duane will we'll start with you, is this gonna be a pretty stiff headwind for tourism, is the cost of fuel?

- It's a concern, it's a psychological impact, it pretty that shows up on the front page of the newspaper or the lead story on the news, you know the consumer, additional to $30 is not gonna make someone not take a trip but what it is is the impact psychologically of maybe we shouldn't go as far, maybe we shouldn't take this trip, maybe we shouldn't do this, you know, I think that's where it has more impact than it does the actual dollar someone has to spend, but, we've been at four, we've never been at five, at least not in the Carolina.

- Wit, what do you think?

- Yeah, I'd say the same thing, you know, it's interesting, traditionally we do well when gas prices increase because we're closer than Florida, we're closer than some of those other places, but I just saw a study from Longwoods International that actually showed it was not gas prices that were worrying people, but it was also inflation, so you've got this one, two punch, you know, that's not that bigger part of your span on a trip like Duane said, but it does place a mental block on some people and maybe causes some hesitation, and we don't want people hesitating, we want them out spending.

- Yeah, when you both talk to your internal teams and you model out, okay, this is where inflation is, this is where the cost of fuel is, this is what we know is coming this year, is there a general sense that there will be tighter travel as you guys both talked about that, that people are gonna be staying closer?

It won't be as much international because of, of wars or cost?

- I think definitely.

So, you know, we were a little worried the international markets would open back up and we would lose some of those domestic visitors who had been traveling domestically instead of traveling internationally, I think the war and, you know, just the fear of what's going on in Europe and those kind of things, will keep some of those people in the US, and I think the inflation will keep them, you know, traveling closer to home, and since we're so close to New York and DC and those areas, let's hope they come down and select us.

- I think you saw, when COVID started we saw it with the tighter travelers you put it not going as the domestic leisure traveler, particularly the drive market, really what has exploded over the last year in 2021 and into 2022 as well, I think that will continue through most of this year as business travel is still down and international travel is still for the most part missing, but I think international travel starts to come back at the end of this year, barring someone foresee new variant of the virus.

- You know, guys for besides the repressive nature of what COVID has done in a lockdown economy, and the fact that we're not in a triage mode, if you will anymore, because of in large part, at least because of COVID.

What's different this time for tourism, what do you think this year will be?

- Yeah, I think we're still not back on group travel, meetings, business travel, not quite there yet.

I also think there's sort of a bit of a new normal in that, vacation rentals went through the roof during COVID, a lot of people tried that type of a stay, and they're sticking with it, and those numbers are still growing.

- Yeah, same thing in South Carolina, we've seen an increase in, as we've put it in the short term rentals, they did extremely well during the pandemic and that will continue afterward, but I think the preferred engagement for a lot of travelers now is form of outdoor recreation, that's a broad spectrum from golf to fishing, to boating, to paddle boarding, to hiking, so many of those things now are so popular, and particularly in North and South Carolina have a lot of those opportunities, I think that's what we've taken advantage of that in 2021, and we'll continue through this year.

- So, and any, let me go back to something you've both just talked about, and that's just the idea of lodging and booking, and price per unit, there was a bit of a sticker shock last year, and there seems to be, that seems to be holding up, is that forever at a new high level, or do you see some abatement in lodging prices, maybe not this year, but maybe at the end of the year, is this all about supply and demand, and either one of you, please.

- Oh, demand was extremely strong in 2021, people had money, the demand was there, hotels saw that, coming off a year where they had lost a tremendous amount of money in 2020, they drove rates very high in 2021, I think that increased levels off this year, does it go back down in a bay?

Not in 2022.

I think it will stay up, but not have that rate of growth that it did last year.

- Yeah, you know, and as Duane said, North and South Carolina, we have exactly what people are looking for coming out of COVID, so when you've got that supply and we still don't have the demand, due to the labor force shortages, I think you're still gonna see some of those rates pretty high up there.

- Yeah, but, does that mean that you're resetting to a high water mark now on lodging, in your case North Carolina?

- I think so, I think we've hit this new era where we're gonna see a little higher end lodging cost going forward.

- Duane, how do you back out the idea in a, and I promise, I'm not asking you being an economist here, but, given the pressure, given the liquidity in the system, dollar is looking for a place to go, both discretionary, but also corporate and institutional, that is, at some point that money is going to be spent or allocated, so, how do you model out, again, longer term to say, well, we think tourism is gonna do X or Y over a three or five year period, but we know we've got all of that money that looking to be spent, but we know at some point it's going to be gone, is that an element you're even concerned about?

- No, not a lot.

I think we've had, you know, if you look at what we've had, what's changed and particularly in coming out of COVID is that, that shorter leisure traveler trip, but some people even use the term revenge tourism, I think that that's settled and gone away now, there's more of a sense of normalcy, but it's still changed, business travel is still down, you know, virtual meetings have caused business travel to, quite frankly I don't believe we'll get back to the level they were pre pandemic, because two years ago no one heard of zoom, and so I think that's changed the business travel, we've talked about the meetings market is still not back yet.

It's slowly coming back, but it has a lead top, you know, meetings typically book a year in advance, so I don't think we see that fully come back until 2023, but I do believe that, yes, in regard to that liquidity, you know, people have all that money and they've spent it, and it's, you know, a bigger issue quite frankly now is not so much, it's certainly marketing in terms of who we market to, but it's demand, I mean, excuse me, it's supply of labor.

Creating supply of enough tables available or enough staff to service the tables available in a restaurant, enough staff available to service the rooms in a hotel, those are as bigger issues today, as trying to create demand.

- Really that still execute?

Wit does that still execute, is the worker?

- Exactly, and that's gonna be the key with these dollars we have available now from the feds and from the state, if we can leverage them correctly to help get that labor force back, to help those small businesses, you know, the ones typically, like the individual unique, distinct restaurants, that had trouble, if we can help have those federal funds go to them, get them back up and rolling.

That's really gonna help get that labor force back in and get those, get the ability and, places that people can spend money, get those back open and running.

- When you both compare the idea at the depth in 2020 of what the public health crisis was, COVID, and what it did to hospitality, can you say that now we have completely gotten all of that back, have we gotten it back in a different form?

How do you characterize where we were 24 months ago to where we are now, specific to hospitality restaurants?

- Yeah, I'd say we've gotten 98% of spend back, we've lost a lot of the unique distinct restaurants need them to come back, we're still down about 100, 000 on the employees in hospitality and tourism in the state, so we're not quite there yet, but we're working on it.

- Yeah, Chris labor was an issue going into the pandemic, people forget, the pandemic just exacerbated it, we still do not have, I believe in anywhere in any state in the country, the number of employees we had prior to the pandemic back in the workforce, yet businesses back to pretty close to normal levels for most states, particularly for North and South Carolina, so, restaurants and hotels are trying to have to figure out how to do things with less people, you know, it used to be the standard, your room was cleaned on the second day you stayed in a hotel, unless you put the do not disturb card out, I think in five years, it's the opposite, you'll put the card out because you request your room to be cleaned, because the standard will become, someone is not coming in your room the second day because the hotel doesn't have enough staff in some case.

- And I know this is anecdotal to some degree, but back to the restaurants though Duane, when you look across, and I'm not just talking about the coast, the grand strand of the low country, but in general when, the restaurant business, what percentage of those have come back and of that percentage, what would you say those are new restaurants and not the old players.

- We lost about 25% across the state during the two year, roughly of the pandemic, we've had probably 10% reopen or open as a new concept, open in some different form or just brand new, and quite frankly, they're all doing very well now, business is really not an issue for the restaurant, people have gotten cabin and fever and want to go out to eat now, and so labor has become their big challenge now.

- So who has creative ideas, who do you both talk to, that are finding ways to get workers to stay besides just paying them the most, I mean, what are the smart businesses, what are they doing?

- Yeah, they're being innovative I think, they're offering different things for their employees, we've seen restaurants in Charlotte that do a tip for the back of the house, as well as the waiter that serves you, and I think it's those sort of entrepreneurs who are finding the way to get the labor force and get it to come, we're seeing some restaurants that are closed between lunch and dinner, to give the staff a break and those kind of things.

- Yeah, we're seeing less shifts basically, you know, restaurants closed on some days just to give the staff that time off, and there's not, you know, there's not enough staff, and so the staff they do have, they don't wanna burn them out, and so working less shifts, they're finding different ways to do that, I see more family oriented restaurants now, bringing in family members to help out, they're, you know, they're resilient, they'll figure out how to manage it over time.

- There are obviously policy issues that bubble up, in South Carolina, Duane, the general assembly, the state house, if you will, is floated this idea, and looks like it's indeed going to happen, if it hasn't already, if I got my numbers wrong, but about 9 million annually will actually be put into a permanent fund around beach renourishment, which is always a battle whenever it comes up, PRT is gonna be the deployer of that, talk to a little bit about us, how that is a good thing, or that is just being fulfilled finally.

- Well, it's a very good thing, the beaches to tourism that is our infrastructure in any case, it is to us what the interstate system is to transportation, it is a critical part of our infrastructure, it is quote unquote, be hooked for the coast, and so it's critical that we renourish, you know, our state portion that funds, and it varies by beach, by location, with combination of federal funds, local funds, state funds, but to know that we have that state funds there and not have to make that large ask, like we've done in the past, which could be upwards of $50 million, not have to make that ask at a one time and know that there's a recurring funding system in place each year is critical quite frankly, for planning purposes, you know, there's a way to do beach renourishment less expensively, and that's to set up mobilization to do different municipalities or different counties the same time and save costs, knowing that funding is zero, you're in a better position to allow that to happen.

- How, does North Carolina tourism come down on that, what do you do?

- What do we do?

Well, we're trying to do as much as we can for everybody, and I think really our general assembly and our administration have done a fantastic job of trying to drive those dollars back into the businesses that need them, we've got $500 million program that's coming down to help grants for small businesses that we've impacted across the state, and really excited about a program to help develop workforce that's coming through the state, to get folks in the high school level, to talk to them about joining the tourism industry and the future in those careers, that they can have there.

- One other policy issue that obviously is an important one is transportation, DOT, not surprising, again, we look at the Palmetto state, Duane, there is a, and I'll call it and not a battle brewing, but there are clear defining lines between a different way to approach this idea, that South Carolina finally seemed to be funding the idea to finish the I73, the interstate corridor to the grand strand, those along Horry county and the grand strand, businesses have a different idea than maybe those who make policy, two questions, how does that end up, what do you think that looks like finally, will they get that I73 terminus down there at the grand strand, and what does that say about broader transportation policy?

- Well, yes, I think they'll get it done, the state had a surplus in its recurring funds and the governor has proposed a portion of that going to it, as well as some of the federal ARPA funds going to that, to help finish I73, it's critical to get that first leg completed from Myrtle beach, if you will, out to I95 that's leg number one, once that happens, I think there's a lot of finishing all up into North Carolina.

The other part of this from a tourism perspective, Myrtle beach is the largest destination in the United States without really an interstate system to it, it's critical not just for tourism, but it's critical for emergencies as well, look at, you know, hurricane evacuations, the number we have over a 10 year period now, it's critical to be able to get you out in a fast manner, interstates play a big part of that.

- Yeah, I'm not trying to put words in your mouth Duane, is this, again, this difference of opinion between Horry county commission, Horry county policy makers and the business community down there, it sounds like you feel like they're going to work through these differences and all be on the same page about this ultimately, is that fair to say?

- Ultimately they will, you know, Myrtle beach and Horry county at the end of the day will always work together, it is about tourism, it is what drives the economy there, and I think they'll all come together at the end, yes.

They both finish the interstate, and quite frankly also they help, the funds are there now, in terms of not just finishing the interstate, but repairing and widening roads existing that are not part of the interstate, that are existing in Horry county in the Grandstream.

- What DOT, how do you work with DOT that's different now, Wit?

- You know, we're working with them actually a lot on things like litter, which has become an issue, you know, we're a state that's known for our beauty, so we're trying to make sure, you know, people are taking care of the state, taking care of what's going on with the highways, we work with them on a lot of bike and pedestrian safety, because, you know, I think the key to a strong future is not just great transportation, but also having these alternative transportation available, we want to be a bike friendly state, we want to allow people to get around, you know, either in multi multimodal ways with bikes, pedestrian and vehicles.

So, we've done a lot of work with them on planning the future electric vehicles, if people are going all electric, we want to have charging stations, so people can feel like they can travel in those cars, that's gonna be key to our future, a lot going on with DOT, and I think there's a lot of great things about to happen because of a lot of those funds that are coming.

- And Wit not to put you on a spot about this, but when you come about, when you talk about transportation, a big part of that is public safety, and this is not just an urban core issue, but transportation has identified and specifically law enforcement in transportation have identified the idea of the speeding and the deaths on the highways, and it's not just urban, but it happens along the coast as well, and in tourist destinations, is there a policy that tourism ought to have, a leadership role in that?

- I think that's possible, yeah, you know, I think we always try and encourage people to do the right thing, during the pandemic we started an outdoor NC program in combination with Leave No Trace, to try and get people to behave when they were in the outdoors, not only just for the protection of the outdoors, but for the protection of those people as well, you know, we say nature is beautiful, but mother nature can be dangerous, you know, you have to be careful, and I think it's the same thing when you travel, you have a tendency to forget, you know, all the rules and all the regulations, so we have to try and be mindful to people who are coming, that they need to be good stewards of the land, and protect themselves as well as the people who are there to help them.

- And that's not just a North Carolina problem, Duane, I know you know that, the idea of public safety and especially those who are in the vacation mode, and again, I talk about speeding because that's been the fly that's raised here is speeding and deaths on the highway, how does PRT wade into that?

- We'll work with DOT on many of those issues, 1 of our best examples, I think for business coming from out of state is all of our electronic signs of the digital signs that we wheel on interstates, talk about being safe, slowing down, and actually gives you real time the number of deaths that have happened in vehicular accidents today each year, that's a startling, that gets your attention when you're driving down the interstate and you see there's, you know, whatever the number is, 343 deaths so far, it gets your attention, whether you're from South Carolina or a visitor, either one, I think that's effective in reminding people, particularly when they're only interstate.

- North Carolina, your boss, North Carolina's commerce secretary, Michelle Saunders, talks about diversity, equity and inclusion, and she, while she was on this program, she was very effective in, not just weaving it into the conversation, but making a solid case on inclusion and diversity and how effective it has been, and not just bringing new partners and new team members into commerce, so to speak, in North Carolina, but what it's been able to do with the outreach of North Carolina, in looking for new economic development projects, how does that factor into a strategic shift for you and for tourism, what does that mean to you?

- Yeah, well, there's several things that it means really for us, we wanna make sure we're reaching out to everyone, you know, travel, I think sometimes is limited based on people's economics, based on where they are, who they are, what they are, what they look like, or what language they speak, so, we are trying to take a broader approach and be more inclusive in everything we do, whether that's including Spanish language advertising in our campaigns, to who we reach out to, to the imagery that we portray, who's projected in that, who we represent, who our ads are served to, all those kind of things we're looking at them in a holistic approach.

We're also looking at our staffs, and who we hire and who we reach out to when we have openings, we've started a minority internship to try and get more people engaged in the tourism industry, because we think that's important, we've also done some inclusive research with advertising companies, and also have some great events coming up for people that are differently able, and we'll try and focus on all types of inclusion to make the campaign more broad for everyone.

- And Duane, you know I'm gonna ask it, and how does it change PRT and not just changed in that, in apologies, this is not meant to be disrespectful, because I don't know that you are doing, or you're not doing it, not just to become a box to check, but how does it become endemic and part of the DNA where you actually do see an effectiveness with DEI being included?

- Well, I think some of it happens organically just as change over and generational changes and staff, within state government, some of that have happens organically, but we've made concerted efforts, we recruited all the HBCUs in South Carolina every year, and then on the tourism side, state parks, traditionally not been a place that African Americans have visited frequently, we've made concerted efforts to go out there, we partner with a group called, literally called Black Folks Camp Too, 'cause the name of the organization, I believe they've done it in North Carolina as well, they've been very effective in sort of introducing state parks, we actually hired buddy pew who came in with Black Folks Camp Too who's the head coach at South Carolina State University one of our HPCUs, who actually camped for the first time at nearly, I won't see how old he is, but there's an older gentleman camp for the first time and send a great message I think so we've tried, and that's quite frankly where we can really make some headway, both on the staffing side in the state park system, as well as the visitation side.

- We have a minute left, Wit I'm gonna give you the last pitch here, and that's because you had a professional experience in history in Florida, and literally we have a minute left, and the Carolinas have become, my term frenemies, when it comes to competing with Florida for tourism dollars.

How would you characterize that?

- Yeah, I think it's a great sign for the Carolinas that even visit Florida, their state tourism office, their research team pin pointed us as their number one competitor, not California, not the Bahamas, it was good, old Carolinas, so I think that's a great sign that we're really making an impact, we've got what visitors want, and we're starting to get on some of the radar these really big players in the tourism industry.

- That doesn't surprise you, does it Duane?

- No, not at all, the drive market major feeder cities in the Southeast, we're a closer trip and sometimes less expensive, we provide beaches, outdoor race, golf, small towns, quite frankly, we have mountains too in North Carolina, so we have a lot of things quite frankly that Florida doesn't have.

- Yeah, and I'm not playing favorites, but come on, it's Florida.

Gentlemen, I'm sorry for any disrespect for Floridians, but, gentlemen thank you for being in our program, always nice to have you, and we'll have you back, best of luck, happy summer, happy Easter, good to see you both.

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