Coronavirus News: Hotel industry decimated by COVID-19 pandemic, owners say it's worse than 9/11

ByDan Krauth WABC logo

Wednesday, April 29, 2020

'It's worse than 9/11': Hotel industry decimated by pandemic

John Fitzpatrick has been in the hotel business his entire life. After 9/11, he thought he faced the worst the industry could experience. But then, the coronavirus pandemic happene

NEW YORK CITY (WABC) -- John Fitzpatrick has been in the hotel business his entire life. After 9/11, he thought he faced the worst the industry could experience.

But then, the coronavirus pandemic happened.

"It's not looking very good," he said. "We have to be optimistic. We all are, but it's not looking very good at all."

He owns two hotels, the Fitzpatrick Manhattan and Fitzpatrick Grand Central Hotel. He was forced to shut down one temporarily, and the other is almost empty.

"it's just like climbing up a hill," he said. "There just doesn't seem to be any way it's going to change."

More than 60 hotels are closed in New York City due to the pandemic, and some of them aren't expected to reopen. Those that do are changing the way they do business.

"The revenue's gone to zilch," said Vijay Dandapani, president of the Hotel Association of New York City.

Occupancy rates are hovering at 30%, at a time when they're usually about three times higher.

Dandapani said it's worse than 9/11 and the great recession. In both of those cases, occupancy rates never fell below 60%, which he says means it'll take even longer for the industry to recover.

"So it's a playbook that's just not there," Dandapani said.

Hotel owners are putting together a plan on how to reopen. Many are planning more cases of self-check-ins, temperature monitoring, even putting TV remote controls in sealed bags to limit contact.

"It's going to be slow," Dandapani said. "And because it's slow, you're going to see rates that are low for the rest of the year."

Industry insiders believe there will be good rates for guests for at least the next year, but that's also bad for hotels that are struggling to bring back the 40,000 workers who have been laid off.

"To see so many of your employees being laid off and saying to them you're not sure when they're coming back, that's the tough part of the whole thing," Fitzpatrick said.

On top of that, this summer, hotels have to pay real estate taxes based on last year's revenues. It's a bill that going to be hard for money hotels to pay with revenue down by more than 80%.