Memorial Day Momentum?
By Dennis Nessler
The overwhelming consensus among hoteliers is that any potential hotel recovery from the current Coronavirus pandemic is going to be led by drive-to leisure markets. In what may be a sign of hope for the entire industry several hotel companies have indicated that recovery could begin as early as this weekend, at least for some properties.
As we approach the Memorial Day weekend—regarded by most as the unofficial start of summer—many properties in beachfront and warmer locations are poised to have a robust and profitable couple of days.
Jeremy Welter, co-president & COO, Ashford Hospitality Trust, a Dallas-based hotel REIT, specifically referenced a pair of properties during the company’s first quarter earnings call this week. The One Ocean Resort & Spa in Jacksonville, FL, and the Austin Lakeway Resort & Spa in Austin, TX, are both expected to be sold out this coming weekend after being at full capacity last weekend.
“We expect drive-to leisure hotels to be among the first to bounce back and we are already seeing this with [these hotels],” he stated. Welter further discussed the momentum the company is seeing throughout its portfolio of some 116 properties in spite of some 1Q declines. “We believe that hotel occupancy bottomed in the middle of April. Since then occupancy continues to increase on a weekly basis and net new bookings are positive. We’re seeing pick up of room nights on a short-term basis and the pace of that pick up is increasing almost daily,” he said.
Brian Wogernese, president and CEO, Cobblestone Hotels, also believes there is reason for optimism. With much of the company’s portfolio located in the Midwest, he pointed out many of those markets “weren’t affected so bad.” He added, for example, that the company’s more than 20 locations in Iowa were hovering around 40 percent occupancy, which is significantly higher than the national average.
Wogernese further noted many of the RV parks in these regions “are already packed this summer” while pointing out the company has many nearby properties that should benefit. “This is a good sign for us, and the industry, that those rural and drive-to markets have some upside,” he commented.
Meanwhile, during a interview with The Washington Post earlier this week, Chris Nassetta, president and CEO, Hilton, maintained that beach and holiday markets are starting to see some traction. “Already you’re starting to see people want to get out from a leisure point of view. It’s summer and they’ve been couped up,” he said.
He further pointed out for this weekend that Hilton has seen a “dramatic” change in reservations versus previous weekends. “Florida, I suspect, is going to have a very good Memorial Day weekend with a lot of demand. Even though no parks or Disney is open, people want to get out and they’re going to get out,” he said.