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Hotels treading water in Coronavirus tide

Homewood Suites will open in the summer in Fondren.
— Photo by Jack Weatherly

By JACK WEATHERLY

Hotels across Mississippi and the nation are treading water as they wait for the Coronavirus tide to recede and the economy to fully reopen.

Occupancy ranges from single digit percentages to low 20 percentages, according to two lodging associations in Mississippi.

Target occupancy rates are 60 to 70 percent “at the very least” said Pat Fontaine, executive director of the Mississippi Restaurant and Hospitality Association, which has about 100 lodging members.

Revenue per room available was down 70 percent for April compared with a year earlier, said, Linda Hornsby, executive director of the Mississippi Hotel and Lodging Association, which has more than 300 members.

Casinos, which line the coast and the Mississippi River, are still closed and events are prohibited, Hornsby noted.

“We’ve seen it pick up a little” with the gradual restoration of full service at restaurants, she said.

The federal Paycheck Protection Program “has helped a lot of our hotels,” providing up to eight weeks of pay, she said.

But it was not enough, in the view of the industry.

The Mississippi delegation in the U.S House of Representatives has asked the Treasury and Small Business Administration for guidance on forbearance of the loans.

The first round of PPP funding 20,748 loans for Mississippi’s small businesses, including hotels, totaling $2.5 billion for employee retention and other expenses. Congress subsequently voted to provide additional PPP funding in the Paycheck Protection Program and Health Care Enhancement Act.

As of Friday, an additional 19,614 loans totaling $708.7 million have been approved for small businesses in Mississippi, according to a letter signed by the delegation.

A survey showed that 79 percent of 900 respondents nationwide were approved the PPP and/or the Economic Injury Disaster Loan program, according to the American Hotel and Lodging Association.

More than 50 percent of the recipients said the money was “not enough to rehire their staff.” Repeated attempts to get the American Hotel and Lodging Association for clarification on that point were not successful.

Meantime, at the end of the first quarter of 2020, analysts at Lodging Econometrics report that the total U.S. construction pipeline continued to expand year-over-year to 5,731 projects, or 706,128 rooms, up 1 percent by projects and percent by rooms.

Those numbers, of course, were propelled by the nation’s then-booming economy.

However, impact of the corona virus slowed activity and since April the pipeline flow has contracted slightly less than 1 percent by both project and room counts.

Developers with projects under construction have generally extended their opening dates by two to four months, according to Lodging Econometrics.

One project nearing completion is the Homewood Suites, a 125-guest-room hotel under construction in Fondren by Ridgeland-based Heritage Hospitality Group.

Chief Executive Officer Chico Patel said in September 2018 that he expected completion by August 2919.

Patel said on Monday that the hotel would open in 40 to 50 days.

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About Jack Weatherly