State of the industry, six months in
The American Hotel & Lodging Association (AHLA) released an analysis on the economic and human toll on the hotel industry six months into the COVID-19 pandemic, with millions of employees still furloughed or laid off and travel demand lagging far behind normal levels. Key findings of the report include:
- Four out of 10 hotel employees are still not working
- Almost two-thirds (65%) of hotels remain at or below 50% occupancy, below the threshold at which most hotels can break even and pay debt
- Consumer travel remains at all-time low, with only 33% of Americans reporting they have traveled overnight for leisure or vacation since March and just 38% saying they are likely to travel by the end of the year
- Urban hotels are suffering the most and facing collapse with cripplingly low occupancies of 38%, significantly below the national average
Once consumers travel again, they are vastly reassured
Most consumers are still wary of travel, but those who have traveled recently report a substantial increase in confidence, according to a survey from PwC. Among respondents who have traveled since May, 58% expect to book additional air travel within three months (compared to 46% in PwC’s April survey), while 74% expect to stay at a brand-name hotel (compared to 57% in April). In contrast, survey respondents who have not traveled since May said they were less likely to travel in three months, with only 26% anticipating air travel and 38% expecting to stay in a brand-name hotel.
Palmer House in foreclosure suit
New York-based Thor Equities, owner of the Palmer House Hilton, defaulted on a US$333.2 million loan tied to the Chicago hotel after failing to make mortgage payments since April, according to the complaint filed in Cook County Circuit Court. Lender Wells Fargo last week asked the court to appoint a receiver for the property, now reportedly worth 40% less than what Thor paid for it.
Read more in Crain’s Chicago Business
Parts of Saudi see occupancy soar to 95%
Parts of Saudi Arabia have seen a boom in hotel stays, and tourism spending has soared amid the pandemic. Sun and sea destinations, including Umluj, Yanbu and King Abdullah Economic City saw spending increase 64% and peak occupancy rates were above 90% and exceeded 95% in in Abha, Baha and Taif during the Eid holiday. In the seven weeks since the Saudi Tourism Authority launched its “Saudi Summer” marketing campaign, tourism spending has grown to SAR6 billion (US$1.6 billion) — a 26% increase compared with the same point last year.
Dominica joins the bubble
The Caribbean island of Dominica will participate in a travel bubble allowing ease for travelers from nations that have kept COVID-19 numbers down. The bubble is currently comprised of eight other islands: Anguilla, Montserrat, St. Kitts and Nevis, Grenada, St. Lucia, Barbados, St. Vincent and the Grenadines, Antigua and Barbuda. Dominica is also letting in international visitors as of August 7. However, these visitors have been subject to tests and a travel screening questionnaire.