Tax tale of two cities: Wisconsin Dells dominates other cities in hospitality comeback

Published: Jun. 7, 2021 at 10:33 PM CDT|Updated: Jun. 8, 2021 at 10:08 AM CDT
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MADISON, Wis. (WMTV) - Mask mandates lifting, vaccine rates rising; there are different ways to measure progress in the fight against the COVID-19 pandemic. And while things are looking up, many businesses are far from out of the woods when it comes to finances.

Even a carefully designed hotel renovation plan couldn’t account for the most devastating pandemic in modern history.

“It started and we were like, oh, this is going to be a tough six weeks. Oh no, it’s going to be a tough three months. Oh no, it’s going to be a tough year,” says Eric Rottier who runs the Double Tree Hotel on Madison’s East side.

COVID-19 caused his occupancy to go from 90% to 15% in a matter of days.

“It was pretty much 100 percent of all meetings canceled for a good 9-month period,” says Rottier explained.

“Given so much of Madison’s hotel room occupancy is driven by conventions, meetings and events, we’ve already taken a pretty big hit for 2021,” says Rob Gard with Destination Madison.

Out of the 93 events they had to cancel last year, many didn’t reschedule in Madison. Gard says they moved to nearby counties instead.

“Some we were involved with, some we weren’t, went to other places that didn’t have the same COVID-19 restrictions like Dane County had, so some of them went to other places in Wisconsin,” says Gard.

To get those visitors back and to attract even more Destination Madison is shifting their marketing focus to capitalize on post-pandemic hospitality trends that aren’t event driven.

“The latest data in the travel industry is showing that 87 percent of the population is interested in travel. A lot of that is leisure travel. So that’s the area we will pursue this year is that leisure travel. Families if they haven’t seen each other in a year, college friends getting back together,” says Gard.

Through about a dozen open records requests, NBC15 Investigates analyzed years of city tax data. We found that Madison’s room tax revenue fell from almost $19M in 2019 to less than $6M in 2020, a 68-percent drop. The City of Wisconsin Dells went from $1.9M in 2019 to $1.1M, about a 42-percent drop. Gard says, in part, the less steep drop in The Dells reflects looser covid-19 restrictions there compared to Dane County.

Then NBC15 Investigates looked at money coming in so far in 2021 from the first quarter compared to the two years previous. Madison’s first quarter numbers are still falling compared to quarter one last year and the year before where Wisconsin Dells quarter one earnings in 2021 were practically double what they were pre-pandemic in 2019.

“Business now is great,” says Tara Nelson, spa manager at Sundara Inn and Spa.

Sundara specializes in health and wellness in The Dells. During 2020 the resort closed for two months, but Nelson says an emphasis on leisure travel, drivability and space to spread out are all factors that set them up for success.

“We don’t rely on conferences. We don’t have big conventions. We’re an easy, short drive away from Madison, Minneapolis, Chicago,” explains Larson.

For Sundara it’s more than a pandemic comeback story. To keep up with demand, they’re building new rooms to expand the resort, the second expansion in three years.

“We’re doing our best to get people here,” says Gard.

Meantime in Madison business owners are doing their best to jump on that leisure travel trend and get more guests in rooms, now.

“We do market differently when leisure is a main driver,” says Rottier.

Rebuilding from the pandemic at different speeds, it’s a tax tale of two cities.

“We are not back to 2019 numbers by any means, but we are expecting a really great summer, a really great occupancy,” says Rottier.

NBC15 Investigates also requested tax data from Rock County. Janesville’s room tax went from $1.1M in 2019 to about $678K in 2020. That’s a pandemic hit of about 40 percent.

Every quarter, NBC15 Investigates will be tracking this data until all our southcentral Wisconsin graphs tell the story of a pandemic comeback.

correction: The original version of this story mistakenly identified Tara Nelson as Tara Larson. It has since been corrected.

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