Local hotels feel strain of coronavirus

Officials in the hospitality industry said hotels are experiencing single-digit occupancy rates as a result of the coronavirus pandemic.
Officials in the hospitality industry said hotels are experiencing single-digit occupancy rates as a result of the coronavirus pandemic.

Officials in the hospitality industry said hotels are experiencing single-digit occupancy rates as a result of the coronavirus pandemic.

The coronavirus pandemic has led to a dramatic drop in occupancy rates at hotels across Houston, including in the Cy-Fair area, according to local hotel owners and hospitality officials. In some cases, those challenges have led to layoffs and worries about not being able to make debt payments.

Aly Valiani, president of New Horizons Hospitality, said occupancy levels have been in the low single digits at the company's seven Houston-area hotels, which includes two Homewood Suites by Hilton locations in northwest Houston.

"We are evaluating all opportunities currently and have not elected a full shutdown, but many hotels have and are electing to do so," Valiani said. "We were forced to layoff a significant portion of our team and the hotel is running on a skeleton crew currently."

Officials with the American Hotel and Lodging Association, a hotel industry trade group representing hotel owners and management companies across the U.S., said if hotels remain below 35% occupancy for an extended period of time, many are likely to close their doors. In a March report, the AHLA estimated the state of Texas could see hotel job losses to the tune of 296,000 in the coming weeks.

Because of those concerns, the AHLA is among the groups calling on the federal government to include relief for the hotel industry in future coronavirus stimulus packages. The $2.2 trillion Coronavirus Aid, Relief and Economic Security Act—or CARES Act—which was signed into law by President Donald Trump on March 27, included several elements the AHLA had been lobbying for, including an expansion of the small-business loan program.

However, in a statement, AHLA President and CEO Chip Rogers said the CARES Act did not increase the limits of the loans enough, and hoteliers will only be able to meet their payroll and debt service obligations for around four to eight weeks.

"While we all look forward to the day when it is safe to resume traveling, the reality is that most hotels today are facing single-digit occupancy, and that is unlikely to change in such a short time period," Rogers said in a statement. "With no revenue coming in, hoteliers can’t make their debt payments, which will result in the business going under and employees losing their jobs permanently."

Rogers said the AHLA is pushing Congress to address lingering concerns from the hotel industry in future federal stimulus packages.

For the hotel industry to survive, Valiani said he believes it will require relief from lenders for debt payment deferrals and relief from taxing authorities on occupancy, property, sales and mixed-beverage taxes.

"SBA loans are available, but grants would allow us [to] get temporary relief without burdening the business with more long-term debt," he said. "At current business levels, it is impossible to continue operations without a significant, impactful relief package.
By Shawn Arrajj
Shawn Arrajj serves as the editor of the Cy-Fair edition of Community Impact Newspaper where he covers the Cy-Fair and Jersey Village communities. He mainly writes about development, transportation and issues in Harris County.


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