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Hotels, motels struggling in COVID times

Hotels, motels struggling in COVID times

Business is down 30 to 40 percent at one Vallejo establishment


The COVID-19 pandemic has sent destructive ripples throughout the economy, as the bar, restaurant and hospitality industry has been one of the most affected.

Not only have people lost jobs in those industries — with more than 5.9 million jobs lost by May of this year according to Restaurant Business Online — but less people are patronizing existing establishments. The catastrophe is an “imperfect storm” of Americans having less disposable income, a fear of catching coronavirus, with more and more businesses going under.

Another industry hard-hit by the pandemic has been that of hospitality. The hotel/motel business has not only counted on travelers for its bedrock, but also business travelers and convention traffic, all of which have been put on hiatus during the pandemic.

Alan Reay, founder and president of the Atlas Hospitality Group brokerage firm, keeps a close eye on industry trends and statistics and reports that as of August of this year, hotel revenues in California have fallen 65.5 percent. The Bay Area has been hit even harder, with revenues down 82.6 percent in the San Francisco/San Mateo area and 76.9 percent in the San Jose area.

“The impact from COVID has been devastating,” he said, noting that the current situation is worse than the Great Recession from earlier this century. Combined with the fires throughout the state hindering travel, it has “been a real Armageddon,” he said.

But what about Vallejo? The Times-Herald reached out to local hotels and motels, most of which didn’t return calls or said “no comment.” But the Hampton Inn near Six Flags Discovery Kingdom reports between a 30 to 40 percent downturn in business since the pandemic, according to Haydee Valentin, director of sales.

The Hampton Inn depends on what they call “leisure travelers.”

“The demand is not like it has been before,” she said, “so we have to do a lot of new protocols.”

Valentin said that the hotel has implemented some innovative ways to ensure their rooms are COVID-free so that travelers can have confidence staying there, she said.

Hampton Inn falls under the umbrella of Hilton, which has partnered up with Lysol to “guarantee safety” with what they are calling their Clean Stay Initiative. Every surface is wiped down with a disinfectant, and “high-touch” things like TV remotes are sanitized and then covered in plastic that can be removed by the guest before use, Valentin said.

The hotel also leaves each room vacant for 72 hours before it is booked again. The door is “sealed” with plastic and the guest removes this barrier before entering.

But none of that addresses the fact that less people are traveling for work or pleasure in the first place, she said.

Reay points out that it is essential for hotels and motels to guarantee people’s safety, but that doing so also requires added expenses to business owners, further cutting into their bottom line.

“For your typical 250-room hotel, the new cleaning protocols will add an additional $750,000 to expenses,” he said. “Then unions say, ‘We don’t want our maids going into rooms to clean for COVID, it has to be a special company…’”

Another factor that businesses might have to grapple with are lawsuits from guests who believe they contracted the virus at a hotel, said Reay.

“The industry was hit very hard from ADA lawsuits and bedbugs,” he said. “COVID will pale in comparison.”

The result of all of this is the permanent closing of hundreds of hotels and motels, he said. In New York City alone, up to 200 hotels either have closed or will close down for good.

For those looking to travel safely, Reay says that the large chains are a good bet, noting that any bad press nationally that could arise from COVID transmission could have a huge impact on their business. “They can’t afford it,” he said.

Yet both Reay and Valentin still remain cautiously optimistic that the industry will get past this kneecapping.

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