Tucson’s hospitality industry could take longer to recover from the coronavirus outbreak and will need to target different guests to fill rooms in the future.
The American Hotel and Lodging Association estimates there have been more than 25,000 direct hotel-related jobs lost so far in Arizona.
“The hotel industry is facing an abrupt and unprecedented drop in hotel demand that is gaining pace and getting progressively deeper and more severe week by week,” the association says.
Tucson resorts and hotels are in varying stages of operation with some temporarily closed like Loews Ventana Canyon and Casino del Sol; some accepting only essential business travelers; and others that are still accepting online reservations, such as Westin La Paloma and Westward Look Resort.
But, when the recovery comes and restrictions on movement are lifted, Tucson could be an attractive destination for those traveling by car.
“We think air flights are going to continue to be limited because people are going to be hesitant to fly for a while,” said Jerry Hawkins, a local broker with Hawkins Cole Hospitality & Investment Real Estate.
Instead of marketing to guests on the East Coast, hotels might do well to focus on those who are within driving distance.
In early February, Hawkins gave a speech about the local hotel industry and the 68% occupancy rate enjoyed in 2019.
“Then, 45 days later you’re saying, ‘Boy, oh boy,’” Hawkins said.
Aside from the lack of tourists to shop and eat at local establishments, the lack of room sales tax is something that will be felt in the months to come as the city and state won’t receive that revenue.
“When hotel occupancy drops from 68% to 5%, the tax revenue is going to be significant,” Hawkins said. “That’s another impact on all of us.”
The good news is that unlike the recession of 2008, where there was some mismanagement of hotels, most properties these days have been well-managed.
“So when the government shuts down your business and says you can’t operate, the banks are very understanding,” Hawkins said. “They’re looking for ways to help and delaying payments.”
He thinks visitors from California and Phoenix, who need a break and a short distance to travel, may consider a stay at a resort in the Tucson area.
“Obviously vacations won’t be at the top of the list after recovery,” Hawkins said. “But, if you think about the cabin fever that people are starting to feel now, with the kids all cooped up, my guess is there’s going to be some summer vacation travel.”
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