Hotels hit especially hard as travel wanes during pandemic

Posted at 11:15 PM, May 23, 2020

Memorial Day weekend is often a sizable travel weekend, and a very busy weekend for hotels -- which makes the hit taken by the industry during the pandemic especially painful as popular vacation weekends fly by without providing revenue.

Although stay-at-home orders are being lifted around the country, many people are opting to stay put out of an abundance of caution, keeping hotels at low capacity.

"We've been closed," said Girish Patel, principal at NewGen Worldwide and owner of The Blu Hotel in Blue Ash. "From a financial perspective, we should have been closed. We were sometimes renting one or two rooms in a night."

Patel said the pandemic's impact felt on the hotel industry will be felt for years to come. The Blu Hotel needs to book around half of their rooms to break even on costs, but the hotel only saw an 8 percent room rate through the entire month of April.

"We did have to furlough quite a bit of our team," he said.

His hotel isn't alone. According to the Ohio Hotel and Lodging Association, 30,000 people in Ohio have been either laid off or furloughed in the hotel industry, which makes up 70 percent of the state's hotel and lodging workforce. The pandemic has led to a $200 million loss in statewide revenue through the end of April, which Patel said couldn't come at a worse time.

"In fact, a lot of hoteliers come out of the winter season struggling, so they really depend on this exact time of year to be their kick off for the summer," he said. "And we're just not able to be there for it."

Hotels owned by NewGen Worldwide have focused on new or improved cleaning practices: After a guest leaves, a specially trained employee uses a fogging machine to disinfect the entire room before the cleaning staff goes over it again, from top to bottom. The Blu Hotel is also adding sneeze guards and soap and sanitization stations throughout the building.

But Patel said the industry needs extra government assistance to help employees, and to deal with lenders. Most hotels take out commercial real estate loans that don't allow owners to access the new federal emergency relief loans -- or if they do, the loans may come with extra fees as a result.

"We need our legislative body, the people we elected to try to help us at a time like this," said Patel. "Because I think we can only carry ourselves for so long."

The Blu Hotel is at around 50 percent capacity for this Memorial Day weekend, which Patel said will give staff a chance to test out their new cleaning procedures and see how comfortable guests feel in the hotel.