As the COVID-19 vaccine slowly begins distribution in Nashville, there’s a hint of optimism among city leaders about a speedy economic recovery next year.
A forecast by the Nashville Area Chamber of Commerce, factoring in the wider dissemination of the vaccine, predicts the region will return to its pre-pandemic economic levels by the second quarter of 2021.
The hopefulness is tempered by the grim daily statistics, showing community spread of the virus in Nashville, and a post-Thanksgiving spike that could get even worse after the Christmas holiday.
In general, economic development leaders are cautiously optimistic as they chart out what steps the government can take to spur the recovery. The sight of frontline healthcare workers receiving the vaccine last week buoyed that optimism.
There’s consensus that recovery efforts should focus on the parts of town and economic sectors hardest hit by the pandemic. That will put an increased emphasis on helping Antioch, the working class area with a large immigrant population, as well as the hospitality and entertainment industries, which were booming prior to the pandemic.
Chamber President and CEO Ralph Schulz acknowledges that the forecast may seem optimistic, but he said the same model has correctly predicted recoveries in the past.
“We looked at 77 sectors,” Schulz said. “Without going into a whole lot of detail, the reason there is confidence in this model is both during the flood and the recession, this model was very accurate in predicting the emergence and the nature of the emergence. The one lag in the economy will be hospitality.”
Schulz said that the Nashville area economy had a gross domestic product of $132 billion in February. The anticipation is that by the second quarter, the GDP will be $123 billion, with the shortfall attributed to the hospitality sector.
Nashville has recovered from economic emergencies in the past because of a “strong entrepreneurial community” able to fluidly adapt, and because of its “general business climate,” which made the region a desirable location for corporate expansions and relocations, Schulz said.
“Business climate, regulatory environment, low taxes, geographic location – all of those things are contributing to businesses wanting to expand or relocate, and also will contribute to why a recovery is possible,” Schulz said.
Hospitality and music industries need help
The Nashville Convention and Visitors Corp. President and CEO Butch Spyridon said the arrival of the vaccine gives a light at the end of the tunnel for the battered hospitality industry. In response, Spyridon said the CVC is working on stockpiling creative content to launch a marketing campaign once the vaccine is widely distributed next year. The initial focus will be on leisure travelers who live near Nashville.
The CVC is seeking a grant through the Greater Nashville Regional Council to invest further in marketing, and the latest pandemic relief package agreed to by Congress allows 501c(6) nonprofits like the CVC to apply for loans.
Spyridon has overseen the city’s tourism industry through problematic chapters in the past. The flood and great recession were the closest to 2020 in terms of challenges. Nashville’s hospitality industry, which in recent years saw new boutique hotels pop up, the live music industry achieve exponential growth and critically acclaimed new restaurants regularly open, screeched to a halt. The latest stimulus package also included $15 billion for shuttered independent music venues.
The CVC wants to help as much as possible, as quickly as possible, Spyridon said. That’s why the marketing funds are so vital.
“All the research says the leisure drive (tourism) will be first to rebound,” Spyridon said. “Then it will move to leisure fly. At the same time we will be focusing on trying to keep as much convention business as possible currently booked for late June or early July into the second half of next year.”
Councilmember: Recovery efforts should focus on Antioch
At the same time the hospitality industry has been battered by the pandemic as a sector, the Antioch neighborhood has been especially hard hit. Many essential workers who kept the city functioning call the affordable Antioch area home. Antioch is also the part of town where many immigrants live, and the immigrant community has been disproportionately affected by COVID-19.
You have to address the fundamental concerns of the neighborhood. Those concerns are public safety, public health safety, also we need to provide resources for the educational system. When we do this economic recovery, these variables aren't siloed. They all work in tandem. – Councilwoman Tanaka Vercher, District 28
Metro Councilwoman Tanaka Vercher said economic recovery in Antioch and southeast Davidson County is critical for economic recovery of Nashville.
“What you have to do to stabilize the region and to rebuild the confidence in the region, we need to work on stabilizing our neighborhoods and employment stability,” Vercher said. “How do you do that? You have to invest in the area. We had prior administrations do this. Invest in the area, so it entices more small business investment in the area and also more corporate investment in the area too.
“You have to address the fundamental concerns of the neighborhood. Those concerns are public safety, public health safety, also we need to provide resources for the educational system. When we do this economic recovery, these variables aren’t siloed. They all work in tandem.”
Schulz: three strategies can help recovery
Schulz said that even with an optimistic economic forecast thanks to the speedy arrival of the vaccines, the Nashville economy will need to evolve. The pandemic kicked the automation of many jobs into hyperdrive. That trend will create challenges, and opportunities.
He listed the biotech sector, already growing in Nashville, as one of many that could be positioned for growth post-pandemic.
Chamber Chief Economic Development Officer Jeff Hite said that while economic development leaders were talking to 75 or 80 companies interested in expansion or relocation pre-pandemic, that number is still at 25 or 30 companies.
“Companies are still interested in coming to Nashville,” Hite said.
Schulz said three specific strategies can help Nashville recruit those companies and speed along the recovery. The first is promotional and marketing help for the hospitality industry, as described by Spyridon.
Next, Schulz said the chamber and government officials can focus on small businesses expanding by encouraging investors who have sat on the sidelines during the pandemic to commit that liquidity to Nashville’s successful entrepreneurs. And finally, Schulz said the government should prepare to help unemployed people returning to the workforce fit in the new economy by offering education and “reskilling” programs.
“Promote hospitality, focus on small business investment and retrain workers to meet the demand for more automated jobs – those are three things right there,” Schulz said.
Nashville Mayor John Cooper’s administration is in the midst of a recruitment process to hire a new economic development director.
“Nashville is well-positioned to attract new jobs and kick-start our economic recovery after the vaccine is widely distributed,” Cooper spokeswoman Andrea Fanta said. “We remain a destination city with one of the lowest tax burdens in the country. And a global shift toward employee flexibility and remote work means our existing strategy, which focuses on human capital and workforce development and investing in our neighborhoods, are more important than ever.
“Our small businesses and live music industry are vital to Nashville’s local economy. They will rebound as consumer confidence in our recovery grows and as the vaccine becomes more readily available in the months ahead.”