Hospitality Design - June 2020 - 26

The lobby at Sydell Group's Line
Austin, helmed by Knibb Design

HOTELS

While some hotels have become safe havens
for frontline workers and patients during the
COVID-19 crisis, especially in hot zones like New
York and Seattle, many have temporarily closed,
causing reverberations throughout the industry.
According to hotel data firm STR, the week
of April 11th was the worst single week of U.S.
performance numbers on record for the hotel
industry, with RevPAR, occupancy, and ADR
showing year-over-year declines of 83.6 percent,
69.8 percent, and 45.6 percent, respectively.
Despite this bleak news, occupancy slightly
increased to 35.4 percent by the week ending
May 23rd, due to weekend leisure demand and
some midweek drive-to business travel. "We are
in unchartered territory," says STR's senior vice
president Jan Freitag. "[People ask] how this
relates to 9/11 or 2009. It absolutely doesn't. These
are unprecedented changes."

CASH IS KING

"When you're at zero occupancy, it's hard to get
worse than that. We know we've hit bottom,"
admits Michael Coolidge, chief investment and
development officer at HRI Properties, which

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owns and manages a combined 62 properties,
from luxury apartments to upscale hotels. "All
of us on the investment side are looking at when
we get back to year-end 2019 or early 2020 preCOVID." That, he continues, will be determined
by what happens over the next six months, but
there is one sure bet. "Cash is king, and everyone's
looking at just how much money they're going to
have to feed their assets."
Not all ownership companies or hotels will
survive, and some major public companies will
push forward to take advantage of that, says
Coolidge. Wade Fischer, senior vice president of
design and construction at Aimbridge Hospitality,
agrees that "several investment groups are waiting
for these opportunities, which they anticipate will
be in Q3 and Q4." Fischer is optimistic about the
future of the third-party management company,
which has 1,400 hotels in its portfolio. Since
February, Aimbridge has added more than 200
hotels to its pipeline. "Once we get out of this,
[we're] going to be stronger than ever," he says.
The outlook for Hilton also looks healthy,
says senior vice president of global design Larry
Traxler. "We were pleasantly surprised to hear
from our owners and development partners that

Photo by CHASE DANIEL

perspectives business sense

they had every intention of moving forward with
projects for the most part. Ninety percent of our
3,000-plus active projects are still ongoing."
Based on a confidence survey conducted by
her company for 2020, Maki Nakamura Bara,
president and cofounder of the Chartres Lodging
Group, which has acquired and repositioned
$3 billion of hotel assets in the past 18 years,
also anticipates a flourishing buying market-a
departure from the previous year's survey showing
that the majority of participants were net sellers.
"Overwhelmingly, more than 95 percent of people
are saying they're net buyers, which is great
because when hotels get recapitalized, they tend to
get renovated as well."

UPGRADING STANDARDS

Renovations, many of which were halted as a
result of the pandemic, will have one primary
focus when they reboot: upgraded sanitation
standards. Sixteen of the largest hotel brands,
along with ownership groups and management
companies, are now part of the American Hotel
and Lodging Association's (AHLA) cleaning and
safety program, Safe Stay. Lending the industry
a unified voice, "It sets forth the guidelines on

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Hospitality Design - June 2020

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