Report: Hotel Industry On 'Brink Of Collapse,' Phoenix Among Hardest Hit

Published: Monday, September 7, 2020 - 5:05am
Updated: Tuesday, September 8, 2020 - 7:38am

Nearly six months into the pandemic and the hotel industry says it remains on the brink of collapse. A new analysis by the American Hotel and Lodging Association (AHLA) finds Phoenix among the hardest hit markets.

According to the association’s report, August occupancy in Phoenix area hotels was 43%, compared to 66% in August 2019. The report says 65% of all hotels remain at or below 50% occupancy which is near the threshold for most hotels to break even and pay their bills. 

“While hotels have seen an uptick in demand during the summer compared to where we were in April, occupancy rates are nowhere near where they were a year ago,” said Chip Rogers, AHLA president and CEO. “Thousands of hotels can’t afford to pay their mortgages and are facing the possibility of foreclosure and closing their doors permanently.”

His group wants Congress to extend the Paycheck Protection Program, create a mortgage relief program for hotels, and offer tax credits for cleaning products and personal protective equipment, among other things.

Among the report’s key findings:

  • four out of 10 hotel employees are still not working.
  • Urban hotels have lowest occupancy at 38%.
  • 33% of Americans reported traveling for leisure since March.
  • 38% of Americans say they are likely to travel by year’s end.

Experience Scottsdale, the marketing agency that handles the city’s tourism, said occupancy was 29.5% from Aug. 16-22. The rate was nearly flat from the 29.3% rate the week prior, according to STR.

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