NewsCovering Kentucky


Financial recovery from the pandemic

Rupp Arena.jpg
Posted at 8:27 PM, Mar 06, 2021
and last updated 2021-03-06 20:36:49-05

LEXINGTON, Ky. (LEX 18) — The pandemic didn't just lead to restrictions on businesses.

Events, in general, were canceled across the Commonwealth. That has meant big cuts to a lot of cities' bottom line.

The Lexington Opera House had a new marquee installed along the South Broadway side on March 4, 2020. The excitement of the lights burned out quickly.

"Day by day, the picture became more bleak and we realized we were going to be closed for some time," said Luanne Franklin, director of performing arts at the Opera House.

For months, the lights stayed dim and seats remained vacant at arenas and theaters across Kentucky.

"Backstreet Boys, Journey, JoJo Siwa, Jim Gaffigan just to give you a few that were all up on sale, and moving forward," said Carl Hall, director of Rupp Arena management.

All of those shows, scheduled for 2020, were postponed.

According to VisitLEX, at least 224 meetings or events were canceled due to the pandemic. The impact is directly reflected in hotel room vacancies.

In the year 2019, the occupancy average was 63.5%. But in 2020, that rate dipped to 37.7%. Hotel prices also decreased, from an average daily rate (ADR) of $106.19 in 2019 to $83.13 in 2020.

The full-year hotel revenue total in 2019 was $195,509,613. In 2020, it decreased by 52.3% to under $100 million.

The VisitLEX operating budget was affected by more than $4 million.

"So when you look at the financial impact that this pandemic has had on our industry right here in Lexington Kentucky, the statistics are just staggering," said Mary Quinn Ramer, VisitLEX president.

No month perhaps more staggering than April, the one full month of the shutdown. The Keeneland meet was postponed and any spring festivals were canceled.

In April 2019, the ADR was $120.59 and occupancy was 71%. In April 2020, the ADR was $64.66 with an occupancy rate of 16.1%.

But the impact of cancellations goes well beyond the city of Lexington.

The mayor of nearby Midway, Grayson Vandegrift, says merchants in the town rely on big months in April and October due to Keeneland, and business from Kentucky Derby fans as well.

The good news for 2020 is that Midway's economy actually grew by 7% thanks to an industrial park. But for the shops and restaurants in the unique downtown, the lack of festivals and traveling meant a big hit.

"Their occupational tax revenue receipts that come to the city are down 27% and 38% respectively between those restaurants that we pulled," said Vandegrift.

With fewer people wandering through in the spring and summer, JP Gibson, the owner of the Brown Barrel, added more labels to the shop's liquor selection and looked for other ways to evolve.

"So we turned into a grocery store, doing beef, fresh-cut chicken, seafood, we expanded on everything to make sure that the locals were covered," said Gibson.

2020 was a year of loss but also resilience. Thanks to the surplus from the industrial park, Vandegrift helped launch a Midway Bucks program, a mini-stimulus voucher for families to spend money at local businesses.

"The resident gets to choose how to reinvest their own money in the city," said Vandegrift.

There have been no shows for a year at the Lexington Opera House, but the lights inside the theater are on once again. Right now, the players on stage aren't actors. They're mini golfers.

"We cheer everybody on. I love it when someone gets a hole in one. And then they get their name in lights on the Broadway marquee. Love that, that's the best part of our weekend," said Franklin.

Down Broadway, small crowds are making it loud inside Rupp Arena once again for UK basketball.

The arena also hosted an acoustic concert in January, which Carl Hall says was a big success for the city.

"And that one night, that one event, in January, the Hyatt Regency Hotel went from 10% booking to 50% booking that night," said Hall.

Ramer says the team is promoting a Lexington 2021 campaign that's focused on people supporting local businesses and being ready for a better year.

"So when we're able to get back to 100% capacity. When we're able to bring people back into this community. When we're able to attend a seminar, symposium, that's when I'm sure we'll be on our way to recovery," said Ramer.

With every vaccination, we are one step closer to recovery and the normal we all enjoyed before March 2020.