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Hotels Assess Coronavirus Impact


By Dan Hounsell Emergency Preparedness
Empty hotel lobby interior with reception desk

The ultimate impact of the coronavirus pandemic on institutional and commercial facilities has yet to play out. For the last few weeks, facility managers and their organizations mostly have been trying to respond to the outbreak and only now are taking a closer look at what lies ahead.

While events will play out differently in each market, insights are beginning to emerge as to the situation managers and their staffs might have to deal with as weeks turn into months.

Consider the nation’s hospitality industry, which has been hit hard by cancellations of events and reservations, not to mention strict travel restrictions.  Travel restrictions and restaurant closures aimed at stopping the spread of the virus, along with a looming recession are all bad news for the hospitality industry, and even well-capitalized owners are going to blow through cash reserves quickly, says Jonathan Falik, chief executive officer of JF Capital Advisors, according to Bloomberg.

Some Seattle hotels saw occupancy rates fall below 10 percent recently, even before fresh guidance against public gatherings from the federal government presented a new challenge to the U.S. hospitality industry.

What might it mean for the buildings themselves? Owners can respond to cratering occupancies by shuttering properties and laying off staff, but debt service, property taxes, and basic building maintenance will eat through capital. Many lenders won’t want to take over a hotel in the middle of a demand shock, so owners might be able to modify loans. 

Dan Hounsell is editor-in-chief of Facility Maintenance Decisions.

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