Hotel Best Practices: NYC Sees Shutdown of Hotels During Pandemic. More to Come
September 21, 2020
One of the world’s biggest cities is seeing an devastating impact on the hospitality side. As reported by The New York Times, a wave of permanent closures has started for many of the biggest hotels in New York City, including the 478-room Hilton Times Square and two Courtyard by Marriott hotels in Manhattan.
According to Vijay Dandapani, the president of the Hotel Association of New York City, as few as 7% percent of the hotel rooms in the city were filled with traditional guests in the late summer. In addition, STR, which tracks the hotel industry, reported that the overall occupancy rate was nearly 40%, which was down from more than 80% in 2019.
But financial experts tell the Times that the pace of hotel failures will increase as lenders lose patience after six months of the pandemic. “The fall is really in New York the strongest season of the year for hotels,” commented Douglas Hercher, the managing director for investment banking firm Robert Douglas. “It kicks off with the United Nations General Assembly, conventions, the holidays, the Rockettes. That whole season is basically going to be a wipeout.”
Deciding when to reopen during the pandemic also can be a challenge for hotels. Tom Blundell, the general manager of the Hyatt Centric, told the Times that he makes a decision toward the end of each month about when it seems feasible to reopen his hotel. After several postponements, it is currently set to reopen on Nov. 10, but he said that this would depend on relaxation of the state’s quarantine rules.
The end of the ban on international travelers also would be key to restoring the hotel’s profitability. “That would get us back to a place where we could really fight for survival,” he told the Times. “With all of those things in place, there’s not really a fight to put up.”