FARGO - The Fargo-Moorhead Convention and Visitors Bureau board of directors agreed by consensus to maintain its full-time staff through at least the start of May, when the nonprofit might have a better idea when restrictions on businesses and sporting and other events will be lifted in the metro area, CEO and President Charley Johnson said Monday, April 13.
The CVB will also be mulling whether it should offer no-interest loans available to some area attractions to help them recover from the shutdowns meant to stall the spread of the COVID-19 pandemic, Johnson said.
The CVB has 13 full-timers. With the south Fargo visitors center closed and no conventions going on, all of the part-time workers have been let go, Johnson said.
The decision to maintain staffing for now was determined in an executive session of the board on Monday.
“We’re just trying to determine how that’s going to be going forward,” Johnson said. “We might have a better idea” by May.
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Every hotel room rented in the area produces - conservatively - about $225 in direct visitor spending, Johnson said.
He said the Fargo-Moorhead-West Fargo area has certainly lost $1 million in direct visitor spending due to the loss of a variety of events and tournaments and will soon approach a $2 million loss.
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Johnson estimated that if the CVB kept all of its staff on the payroll through Aug 31 (the end of its fiscal year) that it would cost about $650,000, bringing the agency’s liquid funds down to about $526,000, assuming that a small percentage of the lodging tax that funds the CVB will be collected.
Hotel occupancy rates stood at 56% for the 63 hotels in Fargo-Moorhead-West Fargo area for the 2019 calendar year. Johnson’s best guess is that they are in the 5% to 7% range now.
“The bottom line of this is the hospitality sector is deeply wounded by this issue,” Johnson said, with hotels running five to six months far below capacity, “that’s devastating to that sector.”
Bars and restaurants, even as they scramble to offer take-out and delivery options, are also “among the hardest-hit people in this economic shutdown.”
The ramp up in hotel occupancy will probably be slow when stay-at-home orders and advisories are finally lifted, he said.
He estimates a 13% occupancy rate in June, 16% to 17% in July, perhaps rising to 30% by August, if business travel picks up and the Fargo Marathon is rescheduled.
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“The big challenge will be forecasting for our next fiscal year. What’s the world going to look like in September 2020. If you know, let me know,” Johnson said.
In the public part of Monday’s board meeting, Johnson suggested that the board consider using part of the $2.6 million it has available in its capital funds account to provide no-interest loans to the area’s non-profit attractions, including the Plains Art Museum, Fargo Air Museum, Bonanzaville, Fargo Theatre and Heritage Hjemkomst Interpretive Center, among others.
Johnson said he wasn’t asking for an immediate decision, but he asked the board to consider making $500,000 to $600,000 available that could be lent out in chunks of $50,000 to $75,000 that the nonprofits could pay back in a year or so.
The CVB’s capital funds are generally reserved for supporting large projects, such as the construction of an extra sheet of ice at the Scheels Arena in south Fargo, and the Hulbert Aquatic Center in West Fargo.
