HOUSTON – Houston’s hotels are a massive revenue producer for the city. But like most hospitality industries, it’s struggling financially in a world with COVID-19.
Channel 2 Investigates recently visited some of the city's top hotels and found they were ghost towns, for the most part, with few guests in the lobby, if any at all.
“We are running between 5 and 10% at this time,” said Safet Dokara, who runs the Hotel Alessandra in downtown. The staff wears masks, and guests there are asked to as well, but they aren’t required to. And elevators are restricted to four guests at a time.
Average hotel occupancy has fallen off a cliff in the past couple of months, from an average of 73% this time last year to less than 30% now. And the average daily rate over the same period has been cut in half, from an average of $124 to $62. And all of that lost revenue trickles into everything else in Houston and Harris County.
Right now, nearly all of the Hilton Americas’ business is from the National Guard and other COVID-19 response groups. About 500 employees have been furloughed, though some have been hired back. The rest are waiting for the convention business to return, and that could be a few months away.
And that hotel occupancy tax that pipes millions into the local economy? That revenue stream was down 28% the first three months of the year and is expected to be 75% to 80% less than last year in the next three months.
Industry experts, like Arlene Ramirez of the University of Houston’s Conrad Hilton College, say the hotel industry will bounce back.
“The biggest draw to hotels is conventions that need people to fly in,” she said. “And none of that is happening right now.”
Ramirez said it could a few more months until we see the hotel situation improve.
“We’re starting to see it slowly inch up,” she said. “But, it’s summer and Houston is always tough anyway in the summer. We won’t see a huge increase over the summer. Hopefully, we’ll see it in the fall.”