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The Latest on Hotel Reopenings and Closings Due to Covid-19

20th May 2021 | Hospitality

One year after Covid-19 shut down the travel industry, recovery is starting to pick up. The leisure and hospitality industry once again took the lead for the most monthly job gains, according to the latest report from the U.S. Bureau of Labor Statistics. Employment within the industry increased by 280,000 jobs in March, following the addition of 355,000 jobs in February and a loss of 61,000 jobs in January.

Within the hospitality business, food-and-beverage services saw the largest increase, with 176,000 new jobs. Accommodations added 40,000 jobs, and the arts, entertainment and recreation sector gained nearly 64,000 employees. Year-over-year employment for the entire leisure and hospitality industry is, however, still down more than 18.5 percent. 

More positive statistics come from STR's recent Hotel Data Conference: Global Edition. During the virtual event on March 25, analysts discussed rising hotel occupancy in North America, the resurgence in leisure travel demand and early signs that some business travel demand is coming back.

"From an economic standpoint, we're very, very encouraged about the near-term prospects," said Adam Sacks, president of Tourism Economics, during the conference. According to Sacks, the percentage of households who plan to travel in the next six months has risen from the low 60s to 87 percent over the past month and a half. "That is indeed pent-up demand," he said. "And I think that bodes very well for leisure travel recovery in the summer." 

Still, STR predicts that the hospitality industry won't rebound to prepandemic levels until 2024. Similarly, the American Hotel and Lodging Association estimates that hotel unemployment will not fully recover until 2023. AHLA predicts that U.S. hotels will add 200,000 jobs in 2021, but will remain nearly 500,000 jobs below the industry’s pre-Covid-19 employment level of 2.3 million workers.

"Covid-19 has wiped out 10 years of hotel job growth," said Chip Rogers, president and CEO of AHLA. "Yet the hallmark of hospitality is endless optimism, and I am confident in the future of our industry. Despite the challenges facing the hotel industry, we are resilient. Hotels across the country are focused on creating an environment ready for guests when travel begins to return." 

Where Hotels Are Reopening
Many hotels are welcoming guests back with new cleaning protocols in place. Omni Hotels & Resorts, for example, has reopened most of its properties which had shut down during the pandemic. At the height of the crisis, the hotelier had temporarily closed more than 40 of its properties. Only seven have yet to reopen, according to Omni's travel advisory page. In addition, Hilton had reopened 97 percent of its global hotel properties as of Feb. 10. Only about 220 hotels have temporarily suspended operations.

Gaming resorts, which were among the first to suspend operations en masse, have also welcomed travelers back. A Covid-19 Casino Tracker from the American Gaming Association reports that all 989 casinos in the United States were forced to close due to the pandemic. Of these, 935 have since reopened.

MGM Resorts and Wynn Resorts, for example, suspended operations at their Las Vegas properties on March 16, 2020. The companies, along with other Nevada gaming powerhouses such as Caesars Entertainment and Las Vegas Sands, reopened select casinos on June 4, 2020, in accordance with the state's reopening plan. More Nevada properties are coming back online as demand rises, but new state restrictions in Nevada limit casinos to no more than 35 percent occupancy (see details here).

In the fall, a number of Vegas properties decided to halt mid-week operations due to diminished demand. But in a sign of recovery, MGM Resorts resumed 24/7 operations at the Mirage, Mandalay Bay and Park MGM resorts on March 3. Wynn Resorts has also announced that it will reopen the Encore Las Vegas for mid-week hotel stays, beginning April 8.

"As we begin to see positive signs around the public’s sentiment about traveling, coupled with important progress on the vaccination front and decreasing Covid-19 case numbers, bringing Mandalay Bay, Park MGM and The Mirage back to full-week operations is an important step for us," said MGM CEO Bill Hornbuckle. "We remain optimistic about Las Vegas’ recovery and our ability to bring employees back to work as business volumes allow us to do so."

In other good news, Disneyland Resort, in Anaheim, Calif., is expected to reopen on April 30 after being shuttered for more than a year. Orlando's Walt Disney World began a phased reopening of its theme parks and resort hotels last July.

Where Properties Have Permanently Closed
The severe economic impact of the pandemic has forced many hotels to close. Among the most recent casualties is the Marriott Wardman Park in Washington, D.C., whose owner has permanently shut down the hotel and filed for bankruptcy on Jan. 11.

New York City is another destination that has been hard hit by the pandemic. Among the properties that have already closed for good in New York are the Omni Berkshire Place, Times Square Edition, Hilton Westchester, W New York Downtown, Hilton Hotel Times Square, Courtyard by Marriott in Herald Square, AKA Wall Street and the Roosevelt Hotel. A report from The Wall Street Journal suggests 20 percent of the state's total hotel supply (about 250,000 rooms) could close permanently.

Recent aid from Congress, however, could help thousands of hotels stay open. The $900 billion stimulus deal, which was passed in late December, enables small businesses such as hotels to apply for a second loan. In addition, Biden's proposed "American Rescue Plan" calls for flexible grants to help the hardest-hit small businesses survive the pandemic.

By: Michael J. Shapiro, Elise Schoening