Hotels literally on borrowed time: report

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This article was published 12/11/2020 (1856 days ago), so information in it may no longer be current.

Hotels can’t pivot to another product during the pandemic. They can’t offer their services online or through Zoom meetings. There is no third party service that can deliver room nights.

Hotels are often lumped in with the airlines relative to the shutdown of the entire travel industry. But most Manitoba hotels do not have access to billions of dollars of credit.

The Manitoba Hotel Association wanted to get some clear data on the record as to how hard their industry has been hit and they commissioned MNP to produce a study, called COVID-19 Impact on the Manitoba Hotel Industry, that was released Tuesday, just in time for the province to issue even more restrictions.

The results will not surprise many.

The pandemic has thoroughly decimated the industry.

Revenues and workforces are down 80 per cent or more.

Hotels in the city are lucky to get 20 rooms occupied a night.

Even though there was some hopefulness this week with some positive news about a vaccine, MNP says some Manitoba hotels that depend on conferences and a return of the travelling public, cannot expect a return to 2019 levels of business until 2023.

“With high fixed costs and debt obligations, many hotels may not be able to weather the sustained loss of income,” the MNP report states.

It notes that the federal programs such as the Canada Emergency Wage Subsidy (CEWS) and Canada Emergency Business Account (CEBA) have been widely accessed by the hotel industry. But also hotels have expressed concern that skilled employees will not be available when the industry recovers, meaning a further period of lower productivity and higher cost.

After a virtual annual general meeting on Tuesday attended by more than 100 people, that the association’s president and CEO Scott Jocelyn said was painful, there is no relief in sight.

While the pain may not be as bad for some properties — especially some rural hotels and those where beer vendor sales have increased — Jocelyn said he has been working hard making sure government officials are not misinformed.

“I am hearing from people daily who are telling me their business is slowly slipping through their fingers.”–Scott Jocelyn

“I am hearing from people daily who are telling me their business is slowly slipping through their fingers,” he said.

Unfortunately, neither MNP or the association have a magic solution at their fingertips.

But even with properties operating on miniscule work forces with very few rooms occupied nightly they have an even scarier deadline looming – property taxes for the year, that have already been deferred twice, are due at the end of the month.

“Not a day goes by that one of my members doesn’t remind me of that,” Jocelyn said.

Hotels are taxed based on revenue performance from two years ago, and there is not a hotel in the province doing anywhere close to their revenue of two years ago.

“I am not a public health expert… but how do we pay the tax bill when there are protocols in place not allowing us to be open?” he said.

Bruce MacKay, the general manager of the Holiday Inn Airport West, said the only positive thing is that everyone is in the same boat.

“We are so used to talking about occupancy rate percentages,” he said. “But now we are all talking about individual room sales. Everyone runs around the same 15-to-20 rooms per night.”

On Tuesday Joel Waterman, the general manager of Inn at the Forks, had to tell people at his property’s Riverstone Spa, that the new provincial regulations meant that all but massage therapists had to be laid off.

“There is stuff you learn every day, stuff that has never happened before… other than wanting to cry or puke every day, that is.” Bruce MacKay

“Property taxes at the Inn at the Forks is a shade under $500,000,” he said. “That is the bell we have been ringing for ages. Give us a break on property tax now.”

Jocelyn said he is on a weekly call along with 50 others with Minister of Economic Development and Training Ralph Eichler. He believes he’s been able to educate the province on the unique challenges the industry faces in the pandemic, but more work needs to be done.

He said it has been tough getting the province and the city together to design some type of life saver.

“I have been in the business for 30 years but nobody has has been through anything like this,” MacKay said. “There is stuff you learn every day, stuff that has never happened before… other than wanting to cry or puke every day, that is.”

martin.cash@freepress.mb.ca