What happened: Hoteliers are using different strategies to cope with the drop-off in bookings caused by the COVID-19 pandemic.
Why it matters: Destination British Columbia data shows that hotels employ a large chunk of the 137,800 people who work in the tourism sector in the province – an industry that generates $18.4 billion in annual revenue.
Some B.C. hotel owners are opting to close their businesses and lay off employees as the COVID-19 pandemic ravages their revenue and occupancy rates, while others are vowing to stay open as a public service to accommodate essential workers and others who need rooms.
The federal government is paying to book Accent Inns' 202-room property in Richmond to accommodate travellers who need to be quarantined, Accent Inns' vice-president of marketing and communications Trina Notman told Business in Vancouver on March 26.
Her B.C.-based hotel chain has four other properties – in Burnaby, Victoria, Kamloops and Kelowna – and Notman said all will stay open during the pandemic despite being between 30% and 50% full. The chain is charging less than 50% of what it would normally charge guests, as a way to support those who are self-isolating, essential workers and others. It has laid off about half of its 250-person workforce.
A phone call from a nurse in Victoria partly prompted the company's vow to stay open, Notman said.
That nurse was near tears because the nurse said that all the hotels she was phoning were closed and that she wanted to book a room, Notman said.
"She said, 'There's a real need here because nurses are sleeping in their cars because they don't want to bring the virus home to their families,'" Notman said. "They're working long days with little time between shifts and they don't necessarily want to drive all the way home."
Notman said all of the rooms in the chain's hotels have doors that open to the outside, and there is no centralized air conditioning that could bring dangerous air into rooms. The result is that the rooms are safer than at some chains, she said. She added that she is open to having the rooms be used as hospital rooms if hospitals need extra space. So far, wings of hotels are earmarked for those who are isolating, while other parts of the hotels are open for the general public.
Housing healthcare workers at hotels is something Marriott International Inc. (Nasdaq:MAR) CEO Arne Sorenson has said his hotel chain is already doing.
"[We] started at the beginning with a few of our hotels in Wuhan, China, where we quickly housed healthcare workers," he told CNBC on March 24. "We have a few hotels already in California that are serving duties like that."
Sorenson said revenue at his hotel company, which has more than 6,500 properties branded Marriott, St. Regis, Ritz Carlton and others and is one of the largest in the world, has seen revenue drop 75% from what he would have expected.
B.C.'s Nat Bosa, who owns Victoria's closed Fairmont Empress Hotel, believes drops in revenue could get even worse.
He told BIV that he has seen statistics out of China that showed that when that country was gripped with the worst of this crisis, its hotels were recording occupancy in the low single-digit percentages.
"Imagine having a 500-room hotel that has 15 to 20 people inside," Bosa said. "About 80% of the [B.C.] hotels will close by this weekend."
Government leaders in Canada have told people to stay home so it makes little sense for him to keep his hotel open, he said.
BIV asked Bosa if he thought that there could be business from people who plan to isolate from their families.
"There isn't.," he said. "That's the whole problem."
Other large hotels, such as the Fairmont Hotel Vancouver and the Rosewood Hotel Georgia have temporarily closed, although there are some holdouts. The Fairmont Vancouver Waterfront hotel, for example, has staff taking reservations as of this afternoon.
While Bosa is convinced that, eventually, the hotel sector will rebound, he has a bleak outlook for the immediate future.
"This thing here is not going to come back roaring like a lion, as this is not a 'V,'" he said to indicate the shape of a brisk and immediate stock-market rebound from a bottom.
"I don't see this as a 'V'. This will be a real defined 'U.' It will drag at the bottom for a while, until people feel safe to start going out of their den again."
