Airport could see lower-than-expected activity for up to 3 years, leader says

The executive director of the Indianapolis International Airport predicts its flight activity will be 45% less than originally expected for the year and that it will likely see lower-than-normal activity for up to three years.

Mario Rodriguez, who oversees the airport authority, said Thursday that since the virus outbreak hit Indiana in March, airport activity has dropped to as low as 5% of typical operations, with the the facility serving only 14 of its 53 destinations.

Rodriguez made his remarks during Visit Indy’s annual State of Tourism event, held virtually this year with nearly 700 people watching at its peak. The airport has been among the many parts of the tourism industry hit hard by the pandemic and subsequent economic shutdown.

A graphic displayed during Rodriguez’s presentation showed travel could currently be at its lowest point since the mid-1980s.

But Rodriguez said he expects activity to bounce back to 80% of normal in 2021. Still, he said, the next three years could be challenging, as only 33 to 35 of Indianapolis’ catalog of non-stop flights are expected to be active in that period, with most international travel shut down. The non-stop flight between Indianapolis and Paris has been shut down until at least next year.

He said it will be a “transformative period” for the industry.

Rodriguez did not share what the reduced traffic could mean for the financial health of the airport, although IBJ reported in March that IAA said it is “confident in our financial situation.”

Indianapolis International received $52.2 million in funding from the federal CARES Act.

Rodriguez was one of a handful of central Indiana tourism officials who talked about what the industry could look like after the coronavirus pandemic subsides—including expectations that certain sectors will lose tens of millions of dollars in losses and take anywhere from a few months to several years to fully recover.

Leaders from the Indianapolis Motor Speedway, Indianapolis Arts Council, Indiana Restaurant and Lodging Association also participated in the meeting, which included remarks from Visit Indy CEO Leonard Hoops and Indianapolis Mayor Joe Hogsett. 

“It has never been more important in our city’s history to come together in settings like this one to both offer support to each other, but to remind us that … our city’s unique talent for welcoming guests never leaves us and will endure,” Hogsett said.

The city has already lost 175,000 room nights and more than 100 conventions to cancellations because of the virus.

Hoops said a new recovery task force—established April 28—includes leaders of the Indiana Convention Center & Lucas Oil Stadium, Indianapolis Airport Authority, Indiana Restaurant & Lodging Association, Pacers Sports & Entertainment, the Indiana Sports Corp, Downtown Indy and Visit Indiana.

The group is collectively trying to find ways to move the city forward in its recovery efforts, which Hoops said could take between two and 18 months.

“The mission of this task force is to speed our recovery and to maximize our market share at the end” of the virus, Hoops said.

Gov. Eric Holcomb has set July 4 as the target date to begin Phase 5 of the state’s reopening plan, which would allow all sporting events with fans, and events with more than 250 people, to resume in most of the state. That date could change depending on the number of virus cases and whether the area continues on a downward trajectory.

But Indianapolis—with the most cases in the state and its own stay-at-home order—is running two weeks behind that schedule.

The arts sector is also suffering major losses, said Julie Goodman, executive director of the Indianapolis Arts Council.

She said local arts organizations could collectively lose about $220 million in revenue by September, despite the continued efforts to reopen the economy this summer.

“It’s far more damaging to our organizations if they plan, invest and then have to cancel,” Goodman said, referring to the possibility of a second wave of the virus occurring later in the year. “It might be a while before it’s feasible and safe.”

Several arts organizations have worked to cut their expenses and have canceled events well into the summer. For example, Indianapolis Symphony Orchestra on Monday announced it would not hold its Symphony on the Prairie event or any other summer concerts because of the virus.

Patrick Tamm, president of the restaurant and lodging group, said the drop in tourism activity is nothing short of devastating for local restaurants and hotels. He added the CARES Act won’t “do a darn thing” to help those industries. That’s because because the paycheck protection program only covers about one month of operating expenses for those businesses.

“The CARES Act is great for many that have customers, consumer demand and inventory that doesn’t perish,” he said. “It doesn’t work for hotels and restaurants that well.”

He cited a National Restaurant Association’s study from April that found the state’s restaurant industry lost about $920 million throughout the month because of the virus. Tamm also offered a variety of other national figures for both industries and expressed concern over the next few months for both industries.

“Working together, trying to figure out how we move forward, is going to be very key,” he said. “But at the end of the day, I’m concerned about jobs.”