As a city with an economy built around tourism, Solvang has been hit especially hard during the ongoing COVID-19 crisis.
During a City Council meeting on April 13, City Manager Xenia Bradford said the city will lose about $2 million in revenue related to this virus during the current fiscal year, which runs through June. She also said that if the city’s businesses remain closed through July and August, the city’s estimated revenue for the next fiscal year would be about $1.5 million less than officials had originally expected for this year.
The city is already beginning to feel the effects of these revenue losses, and announced it laid off eight employees on March 27.
Whenever the health orders that have led to these business closures are lifted, the city is relying on IDK Events—a firm hired to handle tourism marketing and event planning—to help jump-start the local economy. During the April 13 meeting, the council changed the scope of IDK Events’ existing contract and extended the agreement through the next fiscal year.
Under these contract changes, $100,000 the city has already paid the company will go toward future efforts, such as annual events when large gatherings are allowed, IDK Events Managing Partner Scott Shuemake said during the meeting.
As for next year’s contract, the city will pay IDK Events 12 percent of whatever it collects in transient occupancy tax revenue, which Mayor Ryan Toussaint said is a reasonable rate.
“Their proposal to council is exceptionally reasonable because … it gives us something that we can easily plan out, and on the downside if there is no TOT, then sorry Scott,” Toussaint said. “But on the upside, if there is, then they get something.”
Since the statewide stay-at-home order went into effect, the company has shifted to assisting the city with its response to the crisis, Shuemake said during the meeting. This includes launching a website with resources related to the virus for businesses and residents and taking over all of the city’s social media challenges, among other moves.
After these initial efforts, Shuemake said the company is beginning to plan for how to attract tourists to Solvang after the crisis is over. He added that he believes the city is well positioned for a rebound as recent tourism surveys have found people are eager to travel when it’s safe to do so and they’re more willing to visit places that don’t require air travel.
“Rather than planning big aspirational, international trips, [travelers have] down-shifted to be more drivable,” Shuemake said. “So we think that positions Solvang and the Santa Ynez Valley well to capitalize on this initial recovery push.”
The council unanimously approved the changes to its existing contract with IDK Events, as well as extending the contract through next year. Although Councilmember Robert Clarke recognized the city may receive some criticism for extending a marketing contract given the tourism industry has completely halted.
“I know that the council will probably take some heat because they think that all that IDK does is promote tourism when we don’t need that right now,” Clarke said. “But I think they’ve done a really good job, and the city has done a good job directing them which way to transition their resources to what we need right now.”
This article appears in Apr 23-30, 2020.
