From Napa Valley to Tuscany, this would normally be peak wine tourism season, a chance for wineries to build revenue by welcoming drop-in visitors for tours and tastings, booking advance dinner reservations and overnight stays, and prompting purchases of wine cases or club memberships. In 2020, the pandemic has changed much of that.
Travel bans, border closures, and concerns about safety have decimated the tourism industry this year, and wineries are feeling the effects. Most producers are reporting decreased tourism numbers for the 12-month period ended in July, which is particularly difficult for businesses that rely heavily on direct-to-consumer (DTC) sales.
However, the wine tourism outlook isn’t all bad: With consumers hesitant to hop flights between states or countries, many wineries have noticed an uptick in local tourism. By implementing and communicating new safety standards, attracting more domestic tourists, and garnering DTC business through e-commerce, wineries can weather the storm to prepare for better tourism conditions ahead.
Assessing the Damage
While tourism worldwide has taken a hit due to the pandemic, regional and winery-specific effects vary. For some, the effect has been devastating. At Pala Wines in Sardinia, tourism has been almost nonexistent since the pandemic hit, since 90 to 95 percent of the winery’s tourists are international. “We had less than 10 people coming [to the winery] in the past two months,” says Fabio Angius, the sales director for Pala.
Though it is currently winter in the Hunter Valley region of Australia, the pandemic just compounded an already-difficult year, shuttering cellar doors for two months during the fall tourism season. “The Hunter Valley has had a horror start to 2020 with the triple threat of drought, bushfires, and Covid wreaking absolute havoc on our industry,” says Christina Tulloch, the CEO of Tulloch Wines and the president of the Hunter Valley Wine and Tourism Association. The wine region is Australia’s most visited, attracting 1.4 million visitors per year, but international and state borders remain closed.
Diminished tourism isn’t just an immediate problem; it could have lasting effects on winery businesses, Tulloch explains. “Cellar door is a really important driver of future revenue as this is where we have the best success in recruiting members to our wine club and mailing list,” she says, “so when visitation drops our future earning potential also takes a hit.”
However, the spring’s bleak outlook, stemming from the sudden closure of nearly all hospitality and tourism businesses, has resulted in a common refrain from many wineries and regions: It could be a lot worse. Most agree that the summer months have not been as bad as originally anticipated.
“While for the first few months of the pandemic we weren’t able to host [visitors], I feel tourism has picked up,” says Ximena Orrego, the owner of Oregon’s Atticus Wine and a board member of the Yamhill-Carlton Growers Association. “We have hosted both local and out-of-state guests regularly in the last few weeks.” Atticus’s sales largely stem from DTC sales at the winery, and summer tourism is very important to Yamhill-Carlton wineries as a whole.
Down the coast, in California’s Santa Barbara County, wineries have also noticed an uptick in visitors as consumers seek out safe, socially distant, outdoor activities. Tourism typically generates 60 to 70 percent of Santa Barbara wine sales, so although the region is projecting that will be up 1 percent in volume, there is expected to be a 4 percent decline in supplier revenue and a 9 percent decline in supplier growth profit. “At this point, break-even should be considered a success this year while dealing with the pandemic,” says Alison Laslett, the CEO of Santa Barbara Vintners.
In mainland Italy, an early Covid hotspot, wineries are experiencing an influx of tourism as well. “Compared to 2019, our hospitality is down 67 percent — which is not bad considering the 80 percent decrease in Italy in general,” says Gianmaria Cesari, the owner of Umberto Cesari in Emilia-Romagna. The winery’s July numbers were better than expected, and overall revenue was up 22 percent year-over-year.
Looking Local
Much of this better-than-expected tourism can be credited to local or domestic tourists who can reach wine regions by car. Since many consumers are avoiding air travel, road trips to nearby destinations are seen as safer alternatives.
“We are seeing a flight to the wine country to both visit and buy when they are allowed to travel,” says Laslett. “People want an escape.” She adds that wine tasting is a relatively safe social activity, given that tastings are conducted outdoors, with plenty of space for visitors to spread out.
Cesari has noticed a distinct reversal in tourism demographics, compared to previous years. While the majority of Umberto Cesari’s visitors have been from the U.S. or northern Europe, locals from Emilia-Romagna have accounted for 67.4 percent of visitors in 2020, and 15 percent of the remaining tourists are Italian. “It is unfortunate that we will be unable to welcome guests from the U.S. this year, since Americans make up a large part of our international visitors,” he says, “but we are very happy to see an influx in domestic travel.”
In Provence, where tourism is only estimated to make up 20 percent of wine sales, tourism is down 26 percent based on hotel reservations, according to the Conseil Interprofessionnel des Vins de Provence (CIVP). However, the region has welcomed more French tourists, particularly since mid-July. “The only thing we can say for the moment is that the economic and touristic recovery is going faster than we thought, for the moment,” says Brice Eymard, the director of the CIVP.
Regions with an existing base of local or domestic tourism have had an advantage on this front; about 90 percent of Mendocino County’s wine tourism is domestic, so visits are only down 20 percent, largely due to reduced lodging capacity. “Mendocino County is a ‘drive destination’ for the San Francisco Bay area and the Sacramento region,” says Bernadette Byrne, the executive director for Mendocino Winegrowers. She says this helps because “people will continue to be wary of air travel and international travel.”
As overnight or day trips become lifelines for city dwellers weary of apartment living, other wine regions located within driving distance of major metropolitan areas have benefited. Much of Hunter Valley’s recent tourism has come from Sydney, which is located just two hours away. “The travel restrictions have meant they don’t really have as many options [for travel], so they’ve been rediscovering the Hunter Valley,” says Tulloch. “It’s been a great opportunity to show them how sophisticated and diverse our offering in-region is.”
In New York City, where weekend car rentals are a hot commodity, residents have been flocking to Long Island’s East End. “Judging by the size of our crowds, it is safe to say that yes, we have been able to attract additional tourism,” says Kareem Massoud, the president of the Long Island Wine Council and the winemaker for Paumanok Vineyards and Palmer Vineyards, who is quick to add that wineries are limiting capacities and spacing out tables per state mandates. Locals and other tri-state residents avoiding air travel have also prompted a bustling tourism season.
Recognizing this, some regions have launched initiatives to bolster local tourism. With borders closed to most international tourists until 2021, Tourism Australia has launched the “Australia, We’ve Missed You” campaign to encourage domestic travel with road trip itineraries. Santa Barbara Vintners is encouraging L.A. residents, who can get to the region in less than two hours, to visit with its campaign “West of France. Just North of L.A.”
Adding Safety Protocols
Of course, new health and safety standards have become important components of wine tourism efforts, with wineries enforcing mandates like social distancing, capacity limits, mask-wearing, and even temperature checks. Many wineries have introduced or expanded outdoor, safely distanced hospitality spaces, such as Boundary Breaks in the Finger Lakes, which constructed several new patios to add room for tables, or Charles Krug in Napa Valley, which added five new Wi-Fi-enabled cabanas to its property.
It’s also important to communicate these health standards to reinforce consumer confidence; Charles Krug produced a video of its safety precautions, while Discover Long Island has partnered with a physician as its official health and wellness ambassador.
Reservation-only policies have also been implemented at many wineries that previously welcomed walk-in guests. “This manages the flow and volume of guests at the estate, ensures social distancing, and allows time for thorough sanitization to maintain a safe environment for our employees and guests,” says Mark Matthewson, the vice president of hospitality for Sonoma’s La Crema, who predicts that this model will stay in place for the foreseeable future.
While reservations may cut down on the number of guests who may visit the winery at a given time, they also seem to increase guest spending. Byrne notes that Mendocino wineries have reported higher per-visitor sales recently. “The enhanced service with reservation-only, limited capacity, and a seated experience has resulted in increased sales,” she says. Charles Krug has experienced a similar boost; average spend per visitor is up 35 percent.
Safety-related changes to winery policies may result in other opportunities as well. At Cantine Florio in Sicily, which welcomed 50,000 visitors in 2019, the team now limits socially distanced tours to 10 people. “Smaller tours allow for more personal attention to each visitor, and they are really enjoying that experience,” says Giacomo Tarquini, the winery’s global marketing director.
Boosting Revenue Elsewhere
Even though wineries and wine regions are optimistic about the current state of wine tourism, they are still working to cope with lost tourism revenue, be it small or large. Luckily, it seems that few will resort to translating this into increased wine prices because they understand the need to be competitive in the overall wine market.
“In my eyes, increasing the prices in order to cover the losses is the worst reaction to have, so it’s one to avoid,” says Angius. Instead, wineries will likely take a long-term approach to recovery, viewing diminished tourism as they would a bad harvest and expecting to compensate with better sales in coming years.
For some, diminished tourism has underscored the importance of maintaining strong sales across diverse channels. “While we couldn’t open cellar door to the public,” says Tulloch, “the fact that we had wines listed with the major liquor retailers … combined with our wine club and mailing-list sales, plus export, meant we managed to make it through with all of our full-time staff intact.”
With less in-person DTC business, wineries have turned to remote revenue drivers, such as curbside pickup, low-cost shipping, wine clubs, e-commerce, and social media. Even in Provence, where online sales were not robust before the pandemic, e-commerce has emerged as an important revenue driver. “It has increased a lot,” says Eymard.
“The ongoing challenges are forcing wineries to use technology in new and improved ways,” says Laslett. At Landmark Vineyards, tasting room staff members are now conducting private virtual tastings with consumers.
Maintaining Resilience
Given the unpredictable nature of the pandemic, it’s difficult to know what the coming months and years hold for the state of wine tourism, and it varies from region to region and producer to producer. “The impact of Covid on all tourism industries will be far-reaching, and I suspect it will take a long time for recovery,” says Tulloch. “I suspect there is still a huge amount of damage to be done, and we will be counting the costs for many years to come.”
Regions that are relatively isolated without plane travel, including islands like Sardinia, face a tougher challenge. Angius expects that even Italians will stay in their respective regions through the end of the year, but he thinks that early avoidance of travel to Italy will fade. “People tend to forget, and we managed the pandemic very well, so now we have the image of a safer place,” he says. “We are already looking and planning for the new year with the eye of what’s good and what we have learned from this situation.”
Many industry members are looking at the potential advantages that the pandemic could lend to wine tourism, particularly the opportunity to connect with local consumers. “There may be long-term, favorable impacts for our industry,” says Massoud. “Since New Yorkers are not really traveling, the East End offers a culturally rich and naturally beautiful escape from the city.”
“We anticipate that domestic travel is where consumers feel the most comfortable,” adds Laslett. “We hope this resonates with would-be international travelers who want a beautiful wine country experience closer to home.” She also hopes that the increased amount of online wine sales will result in more consumers learning about wines and wineries from different regions and therefore planning wine country trips for the future. After all, the inability to travel might just make consumers want to travel to wine regions even more.
“We are sure that tourism will return to where it used to be, and eventually be even stronger,” says Cesari. “We believe that the months of lockdown have not changed people’s desire to travel.”
While 2020 has proven to be a difficult year for wine tourism, wine producers are used to staying tough in the face of challenges. “Covid has had a serious impact on our industry, to the point where some may have been questioning their survival,” says Massoud. “Lately, things have been looking up. Almost all of us are farmers, and farmers are resilient by nature. We know we will get through this.”
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