While virtually all sectors of the economy have seen adverse impacts from the COVID-19 pandemic, one that has perhaps escaped as much notice so far is the hospitality industry. Credit the out-of-sight-out-of-mind principle — with so few Americans traveling over the past six months, it’s easy to forget about all of those hotels that remain mostly empty.
Amid all of this, the Sheraton Madison Hotel, 706 John Nolen Drive, has been undergoing extensive renovations, part of a roughly two-year project that finally wrapped up this summer, even as fewer guests are around to see the improvements.
According to a new analysis from the American Hotel & Lodging Association (AHLA) on the economic and human struggle of the hotel industry six months into the COVID-19 pandemic, millions of hospitality employees are still furloughed or laid off, and travel demand continues to lag 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, which is below the threshold at which most hotels can break even and pay debt.
- Consumer travel remains at an 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.
- Just 16% of Americans plan to travel for Labor Day, 25% for Thanksgiving, and 29% for Christmas.
- Only 14% of hotel rooms are booked for this coming Labor Day weekend, compared to 41% a year ago.
Chip Rogers, president and CEO of AHLA, says the prolonged economic impact of the pandemic has taken an incredible toll on the hotel industry, with no sign of a recovery in sight.
“While hotels have seen an uptick in demand during the summer compared to where we were in April, occupancy rates are nowhere near where they were a year ago. Thousands of hotels can’t afford to pay their mortgages and are facing the possibility of foreclosure and closing their doors permanently,” notes Rogers.
“We are incredibly worried about the fall and what the drop in demand will mean for the industry and the millions of employees we have been unable to bring back. The job loss will be devasting to our industry, our communities, and the overall American economy. Our industry is in crisis.”
The Sheraton Madison Hotel has not been immune to the impact of COVID-19. According to Adam Gautreaux, general manager for the hotel, it was nothing short of a challenge for the facility to maintain operations during the pandemic. “The hospitality industry could take years to fully recover from the severe impacts of the COVID-19 pandemic. We were forced to furlough a large number of our team due to the drop in business levels. We have had the opportunity to bring back some of our furloughed team members and remain hopeful to bring back more as business levels increase.
Still, even as hotel guests dwindled and employees had to be furloughed, the hotel’s $15 million renovation couldn’t be abandoned in its final stages. With customer experience a high priority, Gautreaux says the hotel wanted to make sure each phase of the renovation process aligned with its mission. With a focus on the hotel’s lobby, 239 guest rooms, patio and meeting spaces, and the addition of the Marketplace and a hotel bar called The Hub, the hotel renovations that began in mid-2018 were completed late this summer.
“We have created functional and fun spaces for guests and the general public to use as we want the community to view the Sheraton as the go-to place for meals, drinks, meetings, and more,” explains Gautreaux. The renovations done throughout the hotel were extensive and done with great attention to detail.”
Those details include new considerations thanks to COVID-19.
“With all that’s been going on, we were able to proactively change our space to focus on the health and safety of our guests,” notes Gautreaux. “For example, we have contactless ordering/check-in, seating arrangements to create proper social distancing for our guests, and a socially distant fitness center. We also have sanitation stands in several locations throughout the public space and in our elevator landings on every floor. Sanitation procedures are in effect and being conducted by our housekeeping team in the public space and high guest contact areas of the property. We have very stringent cleanliness guidelines that have been set forth by the brand and we will continue to abide by all of them. These guidelines certainly improve the focus of cleaning detail and everyone can benefit from that high level of standards.”
Despite the fancy new digs, the pandemic has taken a toll on the Sheraton, says Gautreaux. Revenue and occupancy levels during the pandemic have been decimated; initially, the Sheraton experienced around a 50% drop in occupancy percentages and that has only increased since the COVID-19 impact period began.
Additionally, the effects of the pandemic put a pinch on the final phase of the hotel renovation. The original finish date was April but due to significant delays in the shipping of custom furniture and fixtures coming from overseas, it was pushed back until the summer. Gautreaux says there were also some coverage shortages experienced by the Sheraton’s general contractor during the safer-at-home orders at the beginning of the pandemic. Still, those delays enabled the hotel to implement some of its additional health and safety measures.
“We were lucky in the sense that we were able to proactively change our space to focus on the health and safety of our guests, notes Gautreaux. “We want to have our hotel feel welcoming and provide a comfortable environment for our guests to enjoy. We have a great product quality here to showcase now and we want to capitalize on all of the business opportunities that we may have in the future.”
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