Denver’s Lodge Trade Struggles to Rebound from COVID-19 Impacts
Courtesy of the Gaylord Rockies Resort & Convention CenterCompanies
Seven months after hotels were temporarily closed, the industry is still making up for lost time and revenue.
• November 9, 2020
Most businesses have had a hit this year, and the Denver hotel industry is no exception. Seven months after COVID-19 led to stay-at-home orders and the decline in business travel, hotels are still trying to make up for the lost revenue.
According to Visit Denver, hotel occupancy in the metropolitan area fell by around 42 percent year-on-year from September 2019 to September 2020. “In downtown Denver, the loss of convention and convention business due to statewide mandates is the biggest impact on convention size and that [Colorado] The Convention Center is being used as an alternative care facility, ”said Richard Scharf, President and CEO of Visit Denver. “The traditionally high-volume, lucrative market for business travelers was also negatively affected.”
Courtesy of the Source Hotel
The average daily rate fell 28 percent this year as hotels cut prices to fill rooms, according to Visit Denver. The Source Hotel in RiNo cut prices by 30 percent to offset the 40 percent drop in occupancy, says General Manager David Stutz. “Business recovered better in the summer and we saw an increase in business on the weekends,” says Stutz.
Sage Hospitality Group, which manages 16 hotels in the state, including the Crawford Hotel at Union Station and the JW Marriott in Cherry Creek, temporarily closed all but two in Colorado in March and April. These hotels reopened in late May and early June when statewide restrictions were lifted. “I think most hotels in this early part of the pandemic realized that if you were closed you would lose less than if you were open,” said Walter Isenberg, CEO of Sage Hospitality Group. “And when that calculation changed, people opened up.” (Sales were down 97 percent in April from a year earlier, he says.)
Isenberg said sales have improved since April compared to the previous month, but at company-wide Sage Hospitality, which manages 52 hotels, occupancy is still down 65 to 70 percent. To rent rooms, some Sage hotels are getting creative by offering daily rates for those who don’t want to work from home. The company also has a contract with the University of Colorado Boulder to rent hotel rooms as dormitories.
The exterior of the Oxford Hotel in LoDo. Courtesy of the Sage Hospitality Group
The types of hotels people stay in have also changed, as visitors seek more amenities than conference rooms and meeting rooms. For example, JW Marriott in Cherry Creek outperformed many downtown Denver hotels, and hotels like Oxford and Crawford outperformed brands like Courtyard by Marriott, Isenberg says. “The main reason real estate outperforms is because nearly 100 percent of the business we see is leisure,” he says. “There are no conventions. There is practically no meeting business and no business travel. “
At the Gaylord Rockies Resort & Convention in Aurora, visitors also book rooms for reasons other than normal. “Summer was a little different for us this year as our guests were mostly leisure guests who stayed at the hotel to enjoy our amenities,” said Deanne French, Marketing Director at Gaylord Rockies. “It was a staycationers summer.”
While the summer months were used to relax, the hotels are now looking to the holiday season. According to French, the holiday season is a bright spot for Gaylord Rockies as the hotel prepares for Christmas in Gaylord Rockies, including photos with Santa and outdoor ice cream trucks. However, not all hotels in the area are excited about the coming months. “The holiday season looks sparse, although we hope that it could surprise us with pent-up inquiries,” says Stutz of the Source Hotel.
Regardless of the losses and changes this year, Isenberg predicts the industry will recover, although he says it will take time. He estimates that hotels nationally will return to pre-pandemic levels by the second half of 2023 or the first half of 2024.
“The hotel industry has an enormous amount of catching up to do,” says Scharf. “However, the speed of recovery will depend on economics, travel safety protocols, and the impact of better COVID-19 treatments, rapid tests, and a vaccine.”
(MORE: In Denver’s Best Boutique Hotels)