‘The Worst Time . . . Is Still Coming’
Marking its 30th anniversary, this was supposed to be Budget Lodging St. Clair’s year of celebration.
“Up until the pandemic, we were actually up 20 percent in business for January and February and the first part of March, and we were slated to have a really good year, and when it came to celebrating the anniversary, I was more concerned about how am I going to have the time to do anything with all the work that we have before us,” owner Jason Alexander said. “And then that just got shut off.”
Decades of experience could not have prepared the hotel industry for what 2020 was to bring. They could not prepare Alexander, Washington and Union Super 8 by Wyndham owner Ayan Patel, nor the two-thirds of all the hotels nationwide that will close in six months if the government does not offer more assistance, according to an American Hotel and Lodging Association (AHLA) September release.
“It was very demoralizing when I’m paying people to do business at the desk and answer the phone, which typically means you’re taking phone calls and receiving reservations, and instead every time the phone rang, it was somebody calling to cancel,” Alexander said. “So, the phone was actually ringing more than ever, but it was cancellations, one after another.”
August occupancy for hotels in the St. Louis metropolitan area shrank from 71 percent in 2019 to 39 percent this year, according to a COVID-19 industry AHLA report with an analysis of Aug. 9-15 stays. This was considered one of the least affected major hospitality markets in the country.
Nationwide, almost two-thirds of hotels were at 50 percent or less occupancy in August, which is below the point where most break even and pay their debts, according to the report.
Patel’s Super 8s reflect this. May through August, they had only 30-40 percent occupancy, he said. In September and October, occupancy picked up, but not to expected rates with only 45-50 percent of the rooms booked.
This is after Patel had already closed his Union location throughout April, which he only reopened when he received the federal Paycheck Protection Program loan in the first week of May.
Similarly, in April and May, Budget Lodging’s typical business was cut in half, Alexander said, and June saw just slightly more than half of its normal business. In July and August, however, Budget Lodging reached its regular levels of clientele.
In September and October, though, Budget Lodging’s visitor numbers were once again cut in half, compared to the usual number of guests, he said.
Why the Drop?
“Hotels typically don’t create the reason that people travel,” Alexander said. “Typically most hotels, and especially hotels in our area, accommodate the people who already have a reason to travel, so our business just depends almost entirely on the factors that are outside of our control.”
He spoke soberly as he analyzed the situation: “I would say never before have we been more reminded of just how outside of our control these things are.”
Because Budget Lodging sits just off Interstate 44, the hotel welcomes business and transient visitors in addition to those seeing family and friends. Alexander said he still saw a 30-35 percent drop in business due to the banning of group events.
“The pandemic nearly completely eliminated the event-based business, so anybody that would travel due to something that would be a large gathering, it was almost completely wiped out,” he said.
The Super 8s were hit especially hard, Patel said. The hotels rely on event-based visitation rather than transient or business guests. With event shutdowns, room cancellations quickly followed.
“People don’t travel anymore,” he said. “Not even for funerals, not even for meet-and-greets.”
Emily Underdown, director of tourism for the Washington Area Chamber of Commerce, described the state of the local tourism industry as rebounding after recreational events started reopening in mid-summer.
However, the hospitality industry’s peak season is coming to a close, Patel said, and he has not seen close to the typical number of tourists. The vitality of the Washington-area hospitality industry depends on May through October tourism.
“Definitely, we did see a decline in visitors coming to town during COVID; any tourism industry and city did,” Underdown said. “However we just have such a strong community that, really, as things started to open back up and we just started to see people get a little bit more confident with traveling … we really saw our number of visitors increase immensely.”
Underdown also said that Washington received $125,000 from the statewide CARES Act in a two-fold delivery in July and August. She directed the money toward marketing local events, sites and activities to promote tourism.
Patel’s hotels were supported by the PPP and Emergency Injury Disaster Loans in May and June, respectfully, he said. But, for businesses to survive through the pandemic, he said, these months long loans are not enough.
Starting in November, the new season is slow every year for the local industry, he said, never mind when compounded with the COVID-19 spread.
“The virus is still out of control, so we are just afraid that the worst time is yet to come,” Patel said. “You know, as we are entering the winter, it would be really, really tough for the business, so the worst time for hotels is still coming.”
Nationwide, consumer travel is at an “all-time low,” the Aug. 31 AHLA COVID-19 industry report wrote. Since March, only 33 percent of Americans traveled overnight for leisure or vacation, and just 38 percent said they were likely to by the end of 2020.
“I know that, in general, there are not many events, weddings happening during this season anyway, so there’s not much the local community can do about it,” Patel said. “We are writing so many emails to our senators.”
Patel is requesting aid by working with the AHLA and Asian American Hotel Owners Association.
Alexander also expressed frustration that the government has encouraged people to avoid the events that finance the hospitality industry but still expects hotels to pay regular taxes and fees.
“We’ve experienced the ups and downs of the economy,” Alexander said, “we’ve experienced natural disaster, we’ve had tornadoes, fires, floods. We’ve been impacted by all these natural occurrences and other things like the economy that are out of my control, and so over the course of time you develop an anticipation of what kind of things can impact your business, good or bad.
“But the thought or the idea that the government can tell people not to travel, that never entered my mind as a possibility of ever happening, and obviously there was no reason to believe that up until this experience.”
Alexander suggested locals rent out a room to use it as a workplace away from home. He also recommended residents visit the nearby sites as a break or to replace canceled vacations.
He and Underdown said people could visit Meramec Caverns or one of the dozens of wineries within close driving distance. Instead of driving home at the end of the day, Alexander said, stay in a hotel.
“Now, the potential for the tremendous amount of volume from that kind of thing, I don’t know how much potential there is there, but it might be a good decision just for the mental health of the family to let someone else clean up after you, to sleep in a different bed, get out of the house for a weekend,” he said.
At his hotel, he has added remote check-in, and guests can reach their rooms through external corridors, so they do not need to interact with anyone.
Both hotel owners said they have intensified their cleaning procedures to respond to the amplified COVID-19 protocols. Patel said he welcomes anyone who is worried about staying or having their family stay to visit his Super 8 rooms whenever they like for more assurance. “As long as you are keeping those guidelines in mind, hotels are a safe place to stay.”