Major Markets Coping With Major Issues

New York has become a battleground over regulations impacting the hotel industry, including proposed rules to mandate owners keep existing staff for 90 days after buying a property and allowing greater flexibility for guest cancellations. 

Hoteliers in the market see the new rules as overreach 

“We don’t think excessive regulation is conducive to our business,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City hotel association 

Meanwhile, hoteliers are dealing with operational challenges from quarantine mandates to collect information from guests traveling from high-risk states and require them to isolate for 14 days.

“If people want to get here, they’re going to get here for a reason or find a way to do it, but families and businesses that realize that their employees may encounter an issue … I think that’s why travel is down. That’s what’s hurting the tourism needed in New York, to be quite frank,” Randy Taormina, VP of operations at Dream Hotel Group, said. “People are afraid of that, and rightfully so. For 14 days, that’s a lot.”

Similarly, regulations also pose a significant hurdle for San Francisco’s hotels. A union-driven cleaning ordinance in that market was passed on 7 July and creates specific rules for multiple daily cleanings and disinfecting of all lobby surfaces, fixtures, elevators, stairwells, meeting rooms and loading docks.

“The Board of Supervisors seeks not only to reduce the spread of COVID-19 in congregate areas where workers and tourists risk exposure to contagious diseases, but also to demonstrate to visitors, residents and workers that San Francisco hotels and commercial office buildings are, and will remain, among the cleanest and safest facilities in the world,” the ordinance reads.

Investors in the market are skeptical.

“Hospitals don’t have this type of cleaning protocol,” said CHLA President and CEO Lynn Mohrfeld. “It’s a bad deal for everybody.” 

Meanwhile, California in general is experiencing historic drops in hotels sales. In San Francisco County, hotel sales dollar volume dropped 81% in the first half of the year, according to Atlas Hospitality Group.

Hoteliers in Las Vegas remain hopeful for a fall bounceback in the city, as many key properties in that market have reopened and demand is driven by eager travelers, and renovations and new properties.

“I believe there has been and is a tremendous amount of pent-up demand for new product in Las Vegas,” said Derek Stevens, who acquired the old Las Vegas Club site and its surrounding buildings in 2015 then turned it into the new 626-room D Las Vegas Hotel & Casino and 106-room Golden Gate Hotel. “There’s also pent-up demand for people to get out of the house, and there’s been deferred vacations, so I’m very optimistic.”

In the U.K., a court decision could open the door for businesses impacted by COVID-19 to receive payouts from business interruption insurance.

Rob Atkinson, legal director at Bristol-based Black & White Hospitality Management, started a crowdfunding platform for business owners seeking business-interruption payments.

“When we started our crowdfund campaign, it was about the hospitality industry coming together in a show of strength and refusing to accept the unacceptable,” Atkinson said. “With support from UKHospitality and the Night Time Industries Association, we have clearly shown the insurance sector that we will not accept their lame excuses.”

Internationally, there is hope stimulus efforts will boost the fortunes of hoteliers. In Singapore, officials have created a campaign to encourage citizens to explore destinations within the country. 

In Israel, hoteliers anticipate, but are not relying on, a governmental bailout package that would include canceling some taxes and an extended furlough scheme.