Hotel occupancy across the island plummeted last week to 31.2 percent, down from 68.7 percent a year ago, as growing fears about the spread of coronavirus effectively halted travel and city officials asked visitors to stay away.
Although hotels haven’t been ordered to close, city leaders are telling tourists and visitors to stay away from an island that typically attracts 7.2 million visitors each year.
“There’s no silver lining,” said Dennis Byrd, who owns the DoubleTree by Hilton, 1702 Seawall Blvd., and Holiday Inn Express & Suites, 3228 Seawall Blvd. “There’s no way to paint a good picture.”
Occupancy at both Byrd’s hotels is 10 percent or less, he said.
Byrd has had to furlough 80 percent of his hotel staff and reduce employees to 10 people or less at each hotel, he said.
“You have to make a decision based on the ability of the company to be solvent,” Byrd said. “Every furlough is associated with a name of a team member that you created a relationship with.”
Byrd expects his hotels eventually will have near zero occupancy, he said.
Even before the city on March 16 issued its order to shutter all bars and tourist attractions and limit restaurants to take-out or delivery only, hotels were only half full, according to data from Galveston Park Board of Trustees, which manages tourism.
Both limited- and full-service hotels experienced steep drops in occupancy, according to the park board. Full-service hotels typically command higher rates and have full restaurants, spas or other amenities.
Full-service hotels were 29 percent full from March 15 to March 21, compared with 74 percent during the same week a year ago, according to the data.
In limited-service hotels, occupancy was 32.9 percent from March 15 to March 21, a week in which occupancy was 65.2 percent last year, according to the data.
“It’s getting worse by the day,” said Willis Gandhi, president of the Galveston Hotel & Lodging Association. Gandhi also owns the Best Western Plus Galveston Suites, 8502 Seawall Blvd.
Occupancy is less than 5 percent and Gandhi doesn’t expect any more tourists for the foreseeable future, he said. Gandhi has closed all the public areas, including the pool, and increased sanitation practices, but people just aren’t traveling right now, he said.
“We don’t even make enough to cover daily operations,” Gandhi said.
Hotels, along with short-term rentals, collect hotel occupancy tax revenues, which in Galveston accounted for $18.2 million last year, according to park board data. This money is used to pay for Galveston Island Beach Patrol, for some operations at the park board, for the city’s arts and historic preservation programs and Mardi Gras, among other things.
Effects from coronavirus have dramatically affected Wyndham Hotels, which include the Hotel Galvez & Spa, 2024 Seawall Blvd., said Marty Miles, complex general manager.
“While we are still getting calls every day, our reservations are down considerably this week at our properties,” Miles said. “Rather than cancel their reservations, we hope our guests will consider rebooking their travel plans to later in the year.”
It’s hard on employees too, said Pricilla Pippin, who was furloughed from Grotto Ristorante, a restaurant at the San Luis Resort & Spa, 5222 Seawall Blvd.
Pippin was furloughed last week but has a second job to fall back on, she said.
“I have coworkers who don’t have resources,” Pippin said.
Landry’s Inc. declined to comment for this story.
Galveston’s market is very resilient, Byrd said. But if Galveston can’t make money during its summer season, the most productive time of year for many businesses, including hotels, things will be tough, he warned.