Pandemic’s impact on hotels could take years to heal
Pandemic’s impact on hotels could take years to heal
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By Thor Kamban Biberman – San Diego Daily Transcript
Thursday, November 12, 2020
Pfizer may have found at least one vaccine for the coronavirus, but a hospitality executive said COVID-19’s damage to the hotel industry will last for years to come.
Within about eight months, the hotel market went from being awash with capital to one where the traditional sources have dried up, which means many planned hotels won’t get started.
“We’re seeing a record number of projects that have either been deferred or abandoned,” Atlas Hospitality Group president Alan Reay said. “People are trying to pivot to another product type such as apartments or condos.”
He said even if most people are vaccinated next year, it will be 2023 or 2024 before the hotel industry will stabilize.
“And it will be 2026 or 2027 before a significant amount construction picks up,” Reay added. “It’s been so devastating to people’s minds who may be wondering what’s going to happen in the next pandemic.”
For now, at least, luxury hotels appear to be hurting the most, according to Reay.
“Who wants to stay in a 600-room hotel when you only are allowed (except for families) one person per elevator?” he said.
Several proposed hotels for San Diego County have yet to start construction, including the planned 1,600-room Gaylord Bayfront Hotel in Chula Vista.
RIDA Development has pledged to provide $785 million toward the resort and convention center. The Port of San Diego and the city of Chula Vista are combining to put $240 million toward the convention center alone.
The hotel’s design team consists of HKS Architects and Nasland Engineering.
The Port said construction for the hotel could begin by the middle of next year with completion about three years later.
Other elements of the Chula Vista Bayfront plan will eventually include 1,250 additional hotel rooms, restaurants and retail uses, but the timing for the additional hotel rooms will depend on market forces.
Manchester Financial’s One Broadway Hotel & Plaza within the Manchester Pacific Gateway development calls for 1,035 hotel rooms, a 1.9-acre plaza and cultural space, retail and dining, entertainment, and public parking.
Another sizable hotel project downtown is the proposed 500-room expansion of the Hilton San Diego Bayfront near the Convention Center. If constructed, that addition would be built atop the existing Hilton San Diego Bayfront parking garage.
The planned transformation of Seaport Village, called Seaport San Diego, will include several hotels, including a 380-room property that will serve as the base for a 500-foot-tall tower formerly known as “The Spire.”
As many as 1,600 rooms could be constructed across as many as six lodging choices at Seaport San Diego, ranging from hostels to luxury hotels.
Also downtown, a proposal by Mexico-based ICD Sitra, known as Two America Plaza, would contain 301 hotel rooms, 48 residences and 25,000 square feet of commercial space at 1111 Kettner Boulevard.
Near Little Italy, on the south side of A Street between India and Columbia streets, Pinnacle International is planning a 415-foot tower containing 301 hotel rooms, 144 dwelling units and 3,520 square feet of commercial space.
In Mission Valley, San Diego State is planning a satellite campus that will include a 250-room conference hotel and a 150-room select service hotel.
Atlas Hospitality said the Bahia Resort in Mission Bay, owned by Evans Hotels, has proposed a 290-room expansion to its existing 313 rooms.
Atlas Hospitality also said Zephyr is building a 300-room hotel at Foussat Road and State Route 76 in Oceanside.
