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Downtown Austin struggles to return to normal without people in offices

While daily office use is slowly increasing, office levels remain 57% below 2019 levels, according to data from Downtown Austin Alliance.

AUSTIN, Texas — New high rises and business offices may fill Austin's growing skyline, but it is a different sight inside some of those buildings, where vacant desks fill rooms.  

Since the COVID-19 pandemic shut down Austin a year-and-a-half ago, the city has inched closer to a full recovery and normalcy once again, especially with tourism returning and university students back in class. 

Yet, one essential piece of that puzzle is halting efforts to get back to normal: employees returning to offices downtown. 

Data from the Downtown Austin Alliance shows office occupancy is at 85%, a 4% drop since 2020. While daily office use is slowly increasing, office levels remain 57% below 2019 levels. 

This is not the case for all of Austin. Outside of downtown, the amount of people regularly going into or visiting an office is nearing 2019 levels. This is approximately 35% more than what is happening in Downtown Austin offices, according to Jennifer Wiebrand, chair emeritus of Downtown Austin Alliance.

"I think the companies are adapting to what works best for their workforce," Wiebrand said.

Another reason for this slow progression is the lack of conferences and events happening in the downtown area, which typically attract business people during the work week. 

Business owners in the hospitality industry say this is making it tough for them too stay afloat.

"Sometimes it worries us," said Stephanie Williams. 

Williams and her husband own Bennu Coffee Shop, including the location on South Congress. 

When COVID-19 hit, their operations changed significantly, cutting back employees and doing away with their popular 24-hour service. Their business took a hard hit since they catered mainly to students and commuters.

Wiliams told KVUE that Bennu is doing much better than it was in 2020, and they are starting to make a profit again. However, without commuters, they wonder how they will get back to 100%.

"The commuters really help coffee shops with their volume. As we see people return to downtown, we're hoping that those commuter numbers will increase," Williams said. 

Visit Austin Executive Vice President Steve Genovesi told KVUE it will take time, but downtown is headed in the right direction, especially when it comes to conferences and events.

"We are up to about 94% of where our leads were [compared to 2019] going into 2022 and 2023. We feel confident that this pent up demand for meetings and events will fare well for the hotel and the hospitality industry, in general," Genovesi said.

While the business side of downtown continues to recover, Genovesi and Wiebrand explained that Austin is booming in other areas, including tourism.

Passengers are filling Austin-Bergstrom International Airport (ABIA). Most recent data from Austin's airport shows nearly 1.4 million passengers traveled in June 2021. That is 16% shy of the airport's traffic in 2019. 

While hotels are still struggling to fill up on weekdays, tourists are booking up the weekends. Genovesi said that so far this year, citywide, hotels are back to 60% occupancy, a 15% rise since last year. 

While the way businesses operate may change into the future, Wiebrand said the city is changing too and finding new opportunities. 

"There will certainly be a change in the way offices, in general, function going forward as opposed to how offices functioned in the past. But we're not only seeing new office development, we're seeing new office leases," Wiebrand said.

This movement forward, even if slow, is giving business owners like Williams hope for a brighter future ahead. 

Now that students are back, Williams is going back to their old ways, meaning staying open 24/7 at the Austin Community College Highland Campus.

As the city evolves, she and her husband told KVUE they will make sure they continue to evolve too.

"We, at our heart, we are a place for community to come. And so, we think that might become even more important to people as they do work from home," Williams said.

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