Business, government and leisure travel have plummeted during the pandemic, crushing hotel-occupancy rates like an empty aluminum can and costing the U.S. hospitality and tourism industries millions of jobs and billions of dollars’ worth of sales.
“The pandemic has created an existential crisis for our industry,” said Mark Carrier, president of B.F. Saul Co. Hospitality Group, in video remarks presented Oct. 13 to the Fairfax County Board of Supervisors’ Economic Advisory Commission.
“This has been perhaps the most heart-rending experience of my entire career,” he added.
The hotel industry “remains on the brink of collapse,” according to an Aug. 31 report prepared by the American Hotel & Lodging Association (AHLA).
Forty percent of U.S. hotel workers as of late August still were out of work. The situation was even grimmer in the Washington region, with six of 10 hotel employees off the job, Carrier said.
The U.S. leisure-and-hospitality sector still has 4.3 million employees out of work, a 38-percent unemployment rate that’s more than triple the national average of 10.2 percent, AHLA’s report read.
U.S. hotel occupancy dipped to a record-low 24.5 percent in April, and 65 percent of hotels nationwide had no more than a 50-percent occupancy rate as of August, with facilities in urban markets and near airports suffering even more, the report read.
Among major U.S. hotel markets, Oahu Island, Hawaii, had the lowest occupancy rate the week of Aug. 9-15, scraping by at just 20 percent. Norfolk/Virginia Beach had the highest rate at 66 percent, followed by Philadelphia at 58 percent, according to AHLA’s report.
Such occupancy rates were insufficient to cover hotels’ operating expenses and debt, the report stated.
“Cash flow for the industry has evaporated,” Carrier said.
U.S. hotels in August had a 48.8-percent occupancy rate, down from 71.4 percent in August 2019. The occupancy rate now is almost double what it was in April and has risen steadily since then.
Fairfax County hotels have had an average occupancy rate of 32 percent over the past three months, down from 76 percent from the same period in 2019, Carrier said.
County hotels lost $279 million in revenues from March to August, said Barry Biggar, president and CEO of Visit Fairfax.
The hotel industry’s fortunes also are linked with those of restaurants, attractions and retail, Biggar said.
Tourism-related tax revenues are down $16.7 million compared with last year, he said, adding that the figure did not include sales or payroll taxes.
Hotels in the county were posting even better revenues than last year during January and February, then the pandemic slide began in March, Biggar said. April’s revenues proved the worst, amounting to just under $8.8 million – or nearly 7.5 times less than in April 2019.
County hotel revenues have been on a slow upward incline ever since, coming in at $18.4 million in August, still down nearly two-thirds from the previous year.
Carrier urged supervisors to pursue policies that would allow hotel employees to return to work and advocate for programs to help the industry. He also recommended that county officials be flexible regarding regulations and consider hotels’ revenue losses when making annual real-estate assessments.
“We’re in a survival challenge today,” he said.
Much of the public still is afraid to travel because of the pandemic. A Visit Fairfax survey in early October, which generated 1,203 responses, found 18.7 percent of respondents viewed taking a road trip at “somewhat unsafe” or “very unsafe.” Traveling via commercial airplanes drew “unsafe” responses 55.9 percent of the time, while taking intercity buses or cruise ships came in last at 71 and 75.1 percent, respectively.
Until travel-safety perceptions change, the tourism industry’s woes will continue, Biggar said.
“Consumer confidence is absolutely critical,” he said. “A huge percentage of travelers don’t want to travel at this time and won’t until we’re done” with the pandemic.
Biggar predicted student travel would not bounce back until spring 2022 and that business travel would take longer to recover because companies have become accustomed to the convenience and cost-savings of “virtual” meetings and conferences. The overall situation likely will not right itself completely until at least 2023, he said.
Visit Fairfax will focus on attracting tourists from within a 100-mile radius, with a special emphasis on outdoor activities, Biggar said. One bright spot will be the Nov. 11 opening of the new National Museum of the United States Army in Fort Belvoir, he added.
The Richmond Highway corridor holds many of the county’s tourist attractions, said Supervisor Daniel Storck (D-Mount Vernon), calling the current situation “devastating.”
“We’re trying to focus on what we can do, not ‘woe is me,’” he said.
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