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It continues to be reported that the hospitality industry will be one of the last industries to recover from the pandemic. According to the American Hotel & Lodging Association (AHLA), tourism economists are projecting a 50% revenue loss for hotels nationally. In an AHLA report released August 31, analyzing the hotel industry over the past six months, four out of 10 hotel employees are still not working and 65% of hotels remain at or below 50% occupancy (below the threshold most hotels can break even and pay debt). The report also revealed that only 33% of Americans say they have traveled overnight for leisure or vacation since March, and only 38% say they are likely to do so by the end of the year.
According to Rob DeCleene, executive director of Visit South Bend Mishawaka, “Through August, in St. Joseph County, hotel occupancy rates are down 29.3% versus 2019, which was a record year. Revenue, however, is down 45.2%, meaning in addition to the reduced occupancy, average nightly rates are even further reduced. All of this, of course, is in advance of a Notre Dame Football season with little to no out-of-town visitors. Considering the football season drives the highest rates and revenue of the year for area hotels, these already dire numbers will only continue to fall for the rest of the year and into 2021 as well.”
chamber spoke to two area hotel general managers, Dave Waymire of the DoubleTree by Hilton South Bend and Kim Allsop of the Inn at Saint Mary’s to gather their perspectives on a local level.
Give us a picture of what occupancy looked like when things went into lockdown, and when you started to reopen.
Kim: The Inn at Saint Mary’s never closed. Occupancy averaged 43% in April, May, and June. We increased to 50% in July thanks to the first youth sports event since the pandemic began.
Dave: We went from a 65% occupancy in February to 10% starting mid-March and closed down for the month of April. May was 15% and June slightly better at 20%. July ended at 38%, due to some unexpected business from Notre Dame and lacrosse tournaments. We would normally be running mid to upper 60s in the summer months. We are the largest hotel in the city at 291 rooms.
How is business today, in terms of occupancy? Have you seen a boost with youth sports/returning college students' parents?
Kim: August should show around 63% thanks to the weeklong return of college students as well as leisure travelers. The annual Red Bud motocross event was postponed to the first week of September, but that is our only group business so far. Notre Dame recently announced 20% stadium capacity for its football games; this includes students, families of players and faculty.
Dave: We had a decent first week in August with Notre Dame move-in and a trickle of youth sports, but since then it went away in August.
What are your concerns moving forward?
Kim: Maintaining enough occupancy to avoid laying off employees a second time, the possibility of Notre Dame and Saint Mary’s College students being sent home to study virtually, and the reopening of the Notre Dame campus events.
Dave: We have to quit the overhyped panic and get back to business again, or we will not survive this political-induced storm!
How has the pandemic affected your workforce?
Kim: We have lost a few employees who are fearful of getting the virus, but most have stuck with us after returning from being laid off. I had to furlough/lay off nearly 80% of my hourly and salaried staff for 90 days while those remaining worked shifts in all departments. Surprisingly, the staff has adapted to the new normal.
However, the hospitality industry does not feel nearly as hospitable. It is odd to interact with staff and guests while wearing a face mask, but it is a must. We have to explain that we cannot service rooms until the guest actually checks out. Our hot breakfast buffet is now prepared in to-go boxes.
Dave: We’re working with less than half the staff I normally have. We laid off five salaried managers alone, and at this point, I’m not sure if I will ever be able to bring them back.
Describe any ways you've pivoted during these times to keep the doors open.
Kim: We cut all spending in April and May, shut down an entire floor until the end of May, and labor was cut severely. The salaried managers that were not furloughed worked the front desk while folding laundry and offered guests breakfast to-go bags with wrapped items only. We completely closed the bar for two weeks, and Starbucks closed at 4:00 p.m. daily. Both operations are now open regular hours. We took extended-stay business as that seemed to be one of the strongest markets since March 12.
As many have stated, this was all unchartered territory, but we managed to stay open. It has been difficult to lead my team while trying to stay positive through this ever-changing world. We found out about canceled events as guests called in to cancel reservations.
I think the cancellation of college graduation was some of the most difficult conversations we’ve ever had with guests. Parents were so upset. At first we kept track of cancelations due to COVID-19, but eventually just gave up—the proof was in the month-end numbers. It was heartbreaking to hear of fellow hoteliers who closed their doors and had to report to an empty hotel for months. But the hospitality industry will bounce back, whether it is a year from now or more.
Dave: In addition to some of the staffing I’ve already mentioned, I totally closed my concierge lounge indefinitely and do not offer shuttle pick-up or delivery to the airport any longer. We also have implemented a limited and scaled-down menu in the restaurant. Ridiculous state we are in this country right now, and I believe it is 80% political. Closing our economy will prove to be a historical mistake, in my opinion.
