After a strong showing in May and June, hotel occupancy fell off in July amid growing regional concerns about the coronavirus and a holiday weekend dampened by beach closures.
Although industry leaders are hopeful that later school start dates and strong vacation rental bookings can help boost hotel tax revenue, hoteliers and tourism officials expect a hit from which the industry might need years to recover.
After more than a month of COVID-19-related closures this spring, hotels in Galveston County were busy with guests eager to escape lockdowns.
But by late June, cases of the coronavirus were rising regionally and local leaders began enacting mask orders, discouraging some travelers.
Hotel occupancy across the county was 64.4 percent during the week between May 31 and June 6, but fell almost 20 points to 47.4 percent in the week of June 28 to July 4, according to the benchmarking firm STR. The following week, July 5 to 11, had an occupancy rate of 50.2 percent, according to the report.
Normally hotels would have occupancies closer to 85 percent on the weekday and 100 percent on the weekends, said Marty Miles, complex general manager for Hotel Galvez & Spa, The Tremont House and Harbor House Hotel & Marina at Pier 21.
Although the Fourth of July beach closures were necessary, they were a hit to the whole month, said Paulie Gaido, owner of Gaido’s Seaside Inn, 3700 Seawall Blvd.
“Subsequent to the Fourth of July weekend, you could see that it started to come back, but it took the public some time to move on from a bad news event,” Gaido said.
The city closed beaches for the Independence Day weekend after notice that week from the state it would have the authority to do so over concerns the holiday would bring large crowds to the island and spread infection of the coronavirus.
Casa Del Mar Beachfront Suites, 6102 Seawall Blvd., has been getting some cancellations, General Manager Theresa Elliott said.
When people heard beaches were closed, they assumed beaches were closed long term, Elliott said.
“We’re still fielding calls that the beaches are closed,” Elliott said. “I know that our bookings are way off from last year.”
For hotels, that means cutting costs and trying to run more efficiently, she said.
After May and June, the market already was cooling from the initial rush for post-lockdown vacations, said Kelly de Schaun, executive director of the Galveston Park Board of Trustees.
The park board promotes island tourism.
But the beach closures were a hit and occupancy numbers dropped after that, de Schaun said.
“Along the Gulf Coast, it was equally abysmal,” de Schaun said.
Hotels are significant to the island because they bring in coveted hotel occupancy tax revenue that’s used to pay for beach building, arts and marketing.
The park board is predicting hotel occupancy tax revenue akin to that of 2014, and it likely will take three years to get back to pre-coronavirus levels, de Schaun said.
Another big hit besides the leisure market is business travel and groups, Miles said.
Companies aren’t making travel commitments for the rest of this year and likely won’t resume such bookings until well into 2021, he said.
“We won’t be back to 2019 levels until 2022 at the earliest,” Miles said.
The island slump is trickling into county hotels as well.
Some people who visit Galveston Island stay in Texas City, so when beach visitation is down, that affects mainland lodging as well, said Jody Patel, manager of the Comfort Inn & Suites Texas City, 320 state Highway 146 N.
“I’m at 20 percent occupancy,” Patel said.
The hotel had some reservations for the rest of the summer, but many of those guests are canceling, she said.
“People are probably scared to come out because of the virus,” Patel said.
It’s a different story for short-term rentals.
“We’re completely booked,” said Mary Branum, president of the Short-Term Rental Owners Association of Galveston.
Branum’s properties are booked through August, and she’s getting bookings for the fall, too, she said.
“People are more comfortable, many, in going into an individual home,” Branum said.
Rental management company Sand ‘N Sea Properties also has been booked 100 percent every week, co-owner Claire Reiswerg said.
“People feel good coming and being in a private home for their vacation,” Reiswerg said.
The rental company also started getting more reservations for August once Houston Independent School District announced it was pushing back its start date into September, Reiswerg said.
That is an opportunity for Galveston, de Schaun said. In the past year, the park board has started promoting the island’s environment, history and culture as potential teaching tools for parents and now’s the time to push that message, de Schaun said.