Hospitality industry, hotels see increase in travelers, occupancy
The hotel industry experienced the most devastating year on record in 2020, according to the American Hotel & Lodging Association’s State of the Hotel Industry 2021 report released on Jan. 21, 2021.
Travel restrictions from the pandemic resulted in historically low occupancy, massive job loss and hotel closures, making it one of the last predicted industries to recover. So far, COVID-19’s impact on the travel industry has been nine times that of the impact from the terrorist attacks on Sept. 11, 2001.
“Many of us longtime hoteliers have been through a lot of ups and downs, including 9/11, the economic crisis of 2008 and many more,” Warren Nocon, managing director for the Hotel Californian in downtown Santa Barbara, told the News-Press. “The COVID-19 pandemic has been like nothing we have ever seen or experienced before.”
In fact, hotels have continually been the hardest-hit sector in Santa Barbara County, with more than half of jobs lost over the last year, and hotel occupancy countywide plummeted to 11% last spring at its lowest point.
Nationally, in the forecasted state of the industry in 2021, the association found that the industry will remain nearly 500,000 jobs below pre-pandemic level employment levels; half of U.S. hotel rooms are projected to remain empty; and nearly half of consumers see vaccine distribution as key to travel.
A couple local hotels and leaders of local tourism agencies shared with the News-Press that over the course of the pandemic, hospitality workers faced suspending operations, furloughing staff, implementing evolving safety protocols, determining essential travelers versus nonessential travelers, handling bed tax revenue decreases and, overall, navigating the ambivalence of governmental orders directly impacting the future of their establishments.
At the Hotel Californian, most of the Talent staff was furloughed, a reality Mr. Nocon said was even worse than having to suspend hotel operations twice over the past year.
“By far the most intense and difficult impact that the pandemic had for the hotel was having to furlough most of our Talent during those suspensions,” he said. “I have the pleasure of working with an incredibly talented and amazing group of people, and to have some of them away from the hotel for over a year has been heartbreaking.”
Hotel Californian hasn’t yet returned to pre-pandemic performance, but it was able to keep its cafe marketplace, Goat Tree, open to the public with an expanded outdoor patio throughout the whole pandemic. The hotel is now able to host weddings and corporate functions again, and reopened its Blackbird restaurant and Djinn library bar, both of which the managing director said have been staying busy.
Across the street, Hotel Indigo saw historically low occupancy, which caused a major reduction in staff and expenses, according to Luis Mendoza, the hotel’s general manager. Hotel Indigo had to shut down for a few months over the course of COVID-19, resulting in furloughed team members.
“As a result, management had to ‘wear many hats’ and take on multiple roles to get as much done as possible,” Mr. Mendoza told the News-Press. “… Staffing has been an uphill battle for the industry as we are not getting as many applicants as previous years.”
The issue of staffing, in general, has been reported by many hotels in the region, according to Kathy Janega-Dykes, president and CEO of Visit Santa Barbara.
“Out of necessity, some employees who were laid off earlier in the pandemic found work in other sectors or received unemployment pay that was greater than their wages and kept them out of the workforce once employers were ready to hire again,” Ms. Janega-Dykes told the News-Press. “Some hotels have had to curtail the services they offer to accommodate shortages.”
However, Hotel Indigo’s manager said all furloughed staff has now returned, and the hotel is currently seeing an increase in occupancy again, especially on weekends.
Further north of Santa Barbara, bed tax revenue for the Santa Ynez Valley was down by over a third, according to Shelby Sim, president and CEO of Visit the Santa Ynez Valley.
But it’s not all bad news.
“The hotels have bounced back incredibly fast,” he told the News-Press. “As soon as we were open for leisure travel with the purple tier, our weekends were full, as well as midweek in that first month of opening. Labor is a huge opportunity, industry and statewide.”
Specifically, Mr. Sim said hotels in the Valley expect to be as busy as they can handle with available staffing, and Valley hotels are outperforming current recovery predictions already. He added that according to Tourism Economics, leisure travel could recover to 82% of 2019 volume already this year.
He said, “The Santa Ynez Valley is perfectly positioned for safe travel with our wide open spaces, mostly small boutique hotels and no traffic compared to our neighboring cities. With visitation already strong in our shoulder season, we anticipate seeing even greater summer recovery right here in the Santa Ynez Valley.”
The Hilton Santa Barbara Beachfront Resort on Cabrillo Boulevard released a statement on behalf of the establishment, saying its staff is “encouraged by the increase in bookings.”
“We know that people are eager to get back to traveling, which we have witnessed firsthand, as a vaccine distribution site,” a spokesperson wrote on behalf of the resort. “As safety guidelines continue to evolve, we look forward to welcoming guests and remain diligent in our commitment to provide a safe, hospitable environment for all who pass through our doors.”
Visit Santa Barbara’s CEO said that crises like the pandemic show the impact on the community the absence of tourism and tax revenues can have, with depleted city budgets and underfunded community organizations which affect the quality of life of the residents. Ms. Janega-Dykes said the loss of transient occupancy and sales taxes resulted in the loss of millions of dollars.
And, she noted, Santa Barbara County hotels are not yet back to pre-pandemic levels, but some are handling the losses better than others.
“Luxury resorts and waterfront-based hotels are outperforming other hotels,” she said. “Weekends are on the upswing, but mid-week travel continues to be softer. Mid-week travel is usually filled in by group travel and meetings, a critical travel segment that is missing right now.”
In addition, based on Visit Santa Barbara’s research, the greatest lag in demand has been from markets outside of California, which is why Ms. Janega-Dykes said rebuilding demand from Santa Barbara County’s key flight markets and supporting new flights is also important.
But, on top of that, she said a big question mark is whether the region will be able to keep pace with other cities that may be undercutting Santa Barbara with advantages like lower average daily rates.
Although some aspects of doing business in hotels have changed as a result of the pandemic — with technological advancements such as digital/mobile customer service and keyless entry, and improved communication with customers across digital channels — Visit Santa Barbara’s CEO said the fundamentals of hotels haven’t changed: good product, hospitality and service.
“While this year completely shut down travel in a way that we’ve never seen before, the allure of travel is enduring and timeless,” Ms. Janega-Dykes said. “People have been dreaming of the days when they can reunite with friends and families, celebrate long-delayed weddings and other milestones, and get out to see new sights, especially after being trapped at home for so long.
“They will stay in hotels again.”