Nearly a year after the COVID-19 pandemic hit Georgia, metro Atlanta’s hotel/motel industry slowly continues to recover.
“I sit through, almost every week, a forecast from someone in (another part of) the country, and the consistent thing I’m hearing is 2023 is when we’ll get back to 2019 numbers,” said Jim Sprouse, executive director of the Georgia Hotel & Lodging Association. “I’m hoping we’ll get back to that. But it’s going to take a while. The hotel industry is the lifeblood of Atlanta.”
William Pate, president and CEO of Atlanta Convention & Visitors Bureau (CVB), agreed, adding, “I think 2021 is going to be a tale of two halves. If you think about January to June, we’re going to see some recovery, but it’s going to be very spotty.”
According to the American Hotel & Lodging Association’s website, more than 17,000 hotels nationwide have joined Hospitality for Hope, an initiative started to increase partnerships between the hotel/motel industry and local, state and federal governments to help employees, communities and the industry during the pandemic.
Through the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Small Business Administration has aided the industry through two programs: economic injury disaster loans and the Paycheck Protection Program (PPP) loans. That includes a second round of PPP loans approved by Congress in December.
According to the Georgia association’s website, there are almost 170,000 hotel rooms in the state, and they contribute to Georgia’s nearly $69 billion tourism industry, as stated by the Georgia Department of Economic Development’s website. The state’s hotel/motel excise tax has been in existence since 1975. Under Georgia law, the tax can range from 2% to 8%.
All the sources interviewed for this story said while the metro area has seen some recovery thanks to leisure travel, it won’t fully bounce back until the region starts hosting large-scale conventions again.
Kalibri Labs, a Rockville-Maryland-based firm, tracks hotel/motel data nationally, including the 14-county metro Atlanta area, which includes Bartow, DeKalb, Douglas, Fulton and Paulding counties.
According to Kalibri, the metro area’s occupancy rate for December, the last month when statistics were available, was 41.7%, down from 56.4% the previous December. April has been the worst month during the pandemic, with an occupancy level of only 21.6%, a decrease from 72.2% the previous April.
Mark Woodworth, principal at R.M. Woodworth & Associates Hotel Advisory Services, an Atlanta firm that tracks the industry, said the pandemic has been “five times as bad as the impact felt from the 9/11 attacks, and that was bad.”
The Atlanta CVB, which covers the city’s Buckhead, midtown and downtown areas, including 100 hotels totaling 24,000 rooms, reported similar numbers. Pate said occupancy was at about 70% before the pandemic and hit rock bottom in April (9%) before rebounding to about 30% today.
Prior to the pandemic, metro Atlanta’s economy was predicted to break records in 2020 after hosting 57 million visitors and collecting $16 billion in visitor spending the previous year, according to the Atlanta CVB. The city hosted 10 events that require 2,500 or more hotel room nights on peak days before the outbreak hit Georgia in mid-March and the rest were cancelled.
“There was a point last year where we had roughly 25 member hotel properties that temporarily suspended operations,” Pate said. “Since the start of the pandemic, more than 350 events, including 29 citywide conventions in 2020, were canceled. Just those 29 events alone accounted for more than $640 million in lost business. We’ve lost about 1.2 million room nights since the start of the pandemic as well.”
Sprouse added, “Metro hotels, many of them had to furlough 90% of their employees in the summer and fall. Some hotels had to close temporarily. As an industry, we’ve lost generations of brilliant workers who have had to look at other options.
“You look at young workers who haven’t been able to work since March, so at some point they have to look for something else. … Once business reemerges, we’ll be desperate to try to get people to fill those jobs.”
The Alpharetta Convention & Visitors Bureau, which represents 28 hotels totaling 3,571 rooms, had an average occupancy rate of 72.21% before the pandemic, said Janet Rodgers, its president and CEO. But that number has dropped to 40.98% through December.
“Approximately 92% of the visitors currently staying in our 28 hotels are leisure travelers (weekend hotel stays) with a small amount of individual business travel and 8% are group travelers (corporate, association, weddings, family reunions, sports, bar and bat mitzvahs),” she said.
Visit Sandy Springs, the city’s tourism arm, covers 20 hotels totaling about 2,800 rooms. Executive Director Jennifer Cruce said hotel occupancy was at 63.9% in February 2020, fell to 14.6% in April and rose to 40.4% in January.
“It’s been a challenge,” Cruce said of the pandemic. “While we’ve been able to increase the weekend occupancy somewhat, the rates are still low and we depend on rates, too. … Sandy Springs and Dunwoody, in the Perimeter market, our hotels have always had the advantage of corporate headquarters being here so we had a lot of corporate business travel, so the weekday occupancy rates have always been high.
“But as soon as the pandemic hit, corporate business travel stopped and hasn’t returned. I’m hearing corporate travel won’t return until 2023, and the rates won’t return until 2024. So we won’t be back at 2019 revenue levels for a while.”
Also, the city’s hotels normally benefit from Atlanta’s conventions by getting compression nights, or extra hotel rooms booked when a neighboring area has booked all of its rooms, but that business has temporarily dried up.
DeKalb County was a bit luckier than others, said James Tsismanakis, executive director/CEO of the Discover DeKalb Convention & Visitors Bureau, which covers 57 hotels totaling 6,035 rooms in the cities of Tucker, Chamblee and Doraville and unincorporated DeKalb County.
It had an occupancy rate of 61.9% in February 2020, but in April, the worst month for that area, it dropped to 43.9% before bouncing back to 56.2% in December, close to the rate of 57.1% the previous December.
“Our hotels are uniquely positioned to serve the leisure traveler, and this segment of travelers filled in the gap of group business that ground to a halt during the pandemic,” Tsismanakis said. “DeKalb offers a range of outdoor activities. … Being able to socially distance in large outdoor natural areas such as Stone Mountain Park has been a big appeal for leisure visitors. The hotels/motels in Discover DeKalb’s jurisdiction also serve industries that weren’t heavily impacted by the pandemic, such as construction.”
He added communication with hoteliers and Discover DeKalb’s partners with statewide restaurant, hotel and tourism organizations has helped keep its hotels afloat.
Discover DeKalb and the Atlanta CVB both partnered with Expedia to launch leisure travel and staycation campaigns, respectively, last fall, and the Atlanta organization joined Livable Buckhead on a holiday/winter staycation campaign in December through February. Also, Visit Sandy Springs launched a leisure travel campaign focused on its city and federal parks.
All the sources interviewed with this article said they’re optimistic things will start to return to normal this summer and fall, thanks to the rollout of the COVID-19 vaccine.
Pate said he’s pleased to see major events – including an AmericasMart market show in January, two sporting events in February and April and a dentists’ convention in March – return to downtown Atlanta in 2021. He added he hopes pro and college football games can return to Atlanta at full capacity and concerts and festivals by year’s end.
“ACVB had 38 citywide conventions scheduled for 2021. Eleven were cancelled and 27 are still on the calendar, with 75% of them scheduled in the back half of the year,” Pate said. “If the recovery goes as we’re expecting and people get back to some normal travel patterns in the third and fourth quarters, we believe we’ll see good attendance at those conventions and we’ll be back in a more normal rhythm where we have a convention every week or so. We’ll continue to build on that until probably 2023, when we get back to the level where we were in 2019.”