Nearly vacant hotels fill need in coronavirus battle

By , Daily Memphian Published: April 06, 2020 4:00 AM CT

On any given night in the Memphis area, more than 16,000 hotel rooms are empty and vast convention and meeting spaces have been idled by COVID-19.

Tennessee Gov. Bill Lee said last week that hotel and convention spaces were an option for emergency hospital space as the state prepares for an overflow of coronavirus patients in coming weeks.


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The Metropolitan Memphis Hotel & Lodging Association, an industry group, has been asked to provide the Red Cross with a list of hotels that would be interested in providing temporary hospital space, association president Wayne Tabor said.

Hotel occupancy levels have fallen to record lows because most people stopped traveling, but most Memphis hotels have stayed open with bare-bones staffing in place to provide lodging for essential workers.

The Peabody, the Guest House at Graceland and the Hilton Memphis East are among larger, full-service hotels that have reported maintaining operations to serve business travelers such as airline flight crews, health care industry professionals and construction workers.

The Hu. Hotel Memphis and Doubletree by Hilton Downtown have closed, but the Doubletree’s owners had already been planning to shut down for conversion to an upscale boutique hotel, Memphis hospitality consultant Chuck Pinkowski said.

Tabor said other hotels are making plans to close.

Regarding the governor’s comment about hotels as hospitals, Tabor said, “There are no hotels as of today that I know of who are converting to hospitals. However, the Red Cross has been in contact with me to ask for hotels that would be interested in doing so if needed.”

Tabor said the Red Cross would be contacting hotels.

The Peabody, with 464 rooms, and Guest House at Graceland, 450 rooms, both have sizable convention and meeting spaces.

Asked if there had been discussion about accommodating temporary hospital space, representatives of both hotels said they were still focused on serving the diminished number of guests.

“It hasn’t been discussed,” Peabody spokeswoman Kelly Brock said. “Right now, we’re focused on continuing to operate as a hotel and a ‘home away from home’ for workers in essential industries, such as health care, transportation, shipping and government, who must travel for their jobs. We have extended special rates to businesses and workers in these industries.”

The Guest House’s general manager said the fact that it is still operating as a hotel would preclude it from providing health care space, according to a Graceland spokesman.


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Hotel occupancy in Memphis rebounded in the past week to 30.9% after falling as low as 10%-15% soon after the pandemic was declared. Last March, hotel occupancy citywide was nearly 74%.

“I’m surprised it’s that high,” Pinkowski said.

The Peabody, which furloughed most of its hourly employees, has been offering greatly reduced room rates starting at $99 a night and promoting renting a hotel room for a $59 day rate as an alternative to working at home. During this, what’s usually the start of Memphis’ busiest season for tourists, The Peabody’s guest rooms typically start around $250.

Among The Peabody’s COVID-19 precautions are limiting room rentals to two floors, training housekeeping staff in bio-hazard protocols and rotating rooms that are available. After a room is used by a guest, the room is taken out of available inventory for 72 hours before it is cleaned by housekeeping and returned to inventory, Brock said.

Pinkowski said hotels are getting some business from people who have to travel, such as airline flight crews, and first responders and health care professionals who find it easier to stay in a hotel than to go home and go through rigorous disinfecting protocols before rejoining their families.

“They’re also picking up some stragglers, transient visitors who happen to be looking for rooms,” Pinkowski said.


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Nationally, hotels were 22.6% occupied last week, compared to 69.4% for the same period of 2019, said Pinkowski, owner of Pinkowski & Co. Prices have fallen sharply as well. The average room rate was $79.92 last week compared to $131.92 a year ago.

Friday was the first day for small businesses, including hotels, to file applications for Small Business Administration Paycheck Protection Program loans designed to cover the expense of keeping employees working the next couple of months.

During a webinar this week for hotel operators, Tourism Economics president Adam Sacks said room demand in 2020 is expected to be half of what it was at the all-time high in 2019, and he doesn’t see a complete recovery coming by the end of 2021.

“We are looking at a travel industry loss of $400 billion ... in this year alone. It is seven times the impact of 9-11 on traveler spending,” Sacks said.

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“April is going to be a full month of terrible,” Sacks said, with demand off 80% from a year ago. Estimates are based on research by Tourism Economics and STR.

“We are hopeful that as we move into May and successive months that we begin to see restrictions loosened and people begin to stay in hotels again. We expect a sharp recovery as we move through 2021 ... but still 11% below 2019 room demand,” Sacks said.

Topics

hotel industry Metro Memphis Hotel & Lodging Association coronavirus travel and tourism
Wayne Risher

Wayne Risher

Business news reporter, 43-year veteran of print journalism, 35-year resident of Memphis, University of Georgia alumnus and proud father and spouse of University of Memphis graduates.


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