A POSITIVE ATTITUDE has helped California hotelier Jyoti Sarolia find strength as occupancy plummeted at her hotels as a result of the COVID-19 pandemic. Still, it’s a crisis that could stretch anyone’s optimism to the breaking point.
“I am staying positive, proactive while being aware of the reality of the world we are living in. I believe in the resilience of our industry and hospitality is more important than ever before,” said Sarolia, principal and managing member of Ellis Hospitality Group in Temecula, squarely between Los Angeles and San Diego.
But, like other hoteliers in California and around the country, the economic shutdown caused by the pandemic has led to an unprecedented drop in business.
“Throughout my career, I have experienced a few downturns, whether it was the savings and loan crisis, the Sept. 11 terror attacks or the last recession in 2008,” she said. “I have never before experienced ‘negative demand’ where the number of cancellations exceed the number of reservations. Currently, our hotels have full inventory loaded on all platforms with very little to no pickup daily. Corporate travel has diminished, and leisure travel is truly staying home. Occupancy has plummeted.”
Despite her own hardships, Sarolia said she shares what she has with other hoteliers. While she thinks the large hotel companies are offering varying levels of support for owners, Sarolia said the industry as a whole should take advantage of the crisis to share best practices and make a hospitality united pledge.
“It’s a good time to evaluate all services and amenities that select properties offer,” she said. “Going forward our guests will be looking at us differently and we will have to step up to the plate to show we are responsible for their wellbeing during their stay with us.”
The California Hotel & Lodging Association is updating its website twice a day with information on the outbreak, including tips on dealing with potential exposure to the virus from new guests to rearranging housekeeping services, said Chairman Bijal Patel. The association also has been providing suggestions on seeking emergency bank loans, restructuring existing loans to lower interest rates and deferring payments.
“Our members have been super active on the CH&LA web portal and the ‘WhatsApp’ platform,” he said. “They are sharing all sorts of suggestions – from using this time for employee training sessions to new best practices such as removing lobby or breakfast room furniture as a social distancing technique.”
Patel, who was one of 15 officials on a January trade mission to India sponsored by California Lt. Gov. Eleni Kounalakis, said the entire state has already been hard hit and tourism promotion organization Visit California projects that the state’s travel industry will lose $10.9 billion in revenue and 554,000 jobs in April. Direct visitor spending will drop $54.5 billion for the entire year, about a third of what was originally expected.
“According to this report, every month that California can accelerate the recovery is an opportunity to gain lost revenue and put displaced employees back to work,” Patel said. “If we can return to full recovery in June, the tourism economics modeling forecasts that California could recoup $16.8 billion of the expected total $54 billion loss in travel-related spending.”
CH&LA members need help maintaining their liquidity, he said, an issue for which the recently enacted Coronavirus Aid, Relief, & Economic Security Act, a $2.2 trillion stimulus package, could be helpful.
“Hotel owners need help with liquidity immediately so they can stay open and save jobs,” Patel said. “Probably the most immediate and meaningful way for government to make that happen is with emergency loans for payroll and operating costs such as utilities, benefits, and debt service. These loans need to be fast, with cash available in 24 or 48 hours and without a lot of paperwork, and they should be forgiven when this crisis is over. If we don’t help owners keep hotels open, none of the legislation will have been worth it.”
The association also is urging its vendors to provide best practices to help them best handle the outbreak. It also helped promote the Hotel Lease Volunteer Program which provides temporary housing and has asked state and local governments for deferral of property taxes which are due on April 10th.
Patel said CH&LA also helped convince Gov. Gavin Newsom to waive the WARN Act, which requires employers to typically give at least a 60-day notice before layoffs. He said that timeline is almost impossible to keep under the current circumstances.
Patel’s personal business also has been deeply impacted by the pandemic.
“While I have a dual role as the chairman of CH&LA and also as CEO of our family’s Coast Redwood Hospitality, my energy these days is almost exclusively devoted to CH&LA,” he said. “Still, our family’s hotels have certainly been impacted as heavily as others in the industry, so I am dealing with this in two ways.”
First, Patel is relying on his team of general managers and staff. Secondly, he is sharing with them the best practices he picks up from his experiences with CH&LA.
Both at our hotels and at CH&LA, I am reminding people that the coronavirus is first and foremost a health management challenge and America’s outstanding medical professionals are on it,” he said. “For our part, hotel owners are also on it. For example, by implementing ‘best hygiene practices’ at our hotels so we can remain open for our valued guests and team members.”
The pandemic will end and the industry will rebound, Patel said.
Eventually, the rebound will come and it will be strong thanks to the postponed business trips, events,
“The hotel industry has never been for the meek or the weak. It is for people who are patient and persistent – who are ‘overcomers,’” he said. “We overcame challenges such as the economic downturn of 2008 and [the Sept. 11, 2001 terror attacks] and we will overcome the coronavirus.”