Would you book a room during COVID-19? NJ hotels still struggling
Montreal Beach Resort, located in Cape May, did not welcome guests in April this season as it's done in past years.
When the would-be busiest time of year started to ramp up, and the resort could open its pool to the public in late June, staff continued to see cancellations pour in from guests who had booked stays but feared the potential impact of the novel coronavirus pandemic on their health, comfort and options.
Now, post-Labor Day, operators can only hope the health threat continues to calm down in New Jersey and people feel more willing to book a stay through the rest of the year.
"As of right now, we're looking at 30 to 35% less than last year," said Larry Hirsch, whose family owns and operates the resort.
The public health crisis has put a major dent in both leisure and business travel, the bread and butter for the state's hotel industry. For those outside of New Jersey willing or needing to take a trip here, there's a high likelihood they'll be advised to quarantine for two weeks before going through with their leisure or work plans — there are 35 states and territories in the state's most recent quarantine advisory.
Following several weeks in lockdown mode, lodging establishments along the shore fared better business-wise during the summer, compared to hotels elsewhere that count heavily on personal events and business conferences to book rooms.
"Hotels are getting cancellation contracts left and right for events," said Joseph Simonetta, executive vice president of the New Jersey Hotel & Lodging Association. "Even though the governor has opened up some of the facilities for indoor dining and indoor activities ... there is still a capacity cap which makes some hotels unprofitable."
While hotels are adhering to both voluntary and mandatory safety protocols to protect people on site, the state of New Jersey is further straining the finances of these properties by requiring some stringent measures in this area, Simonetta said.
A hotel, for example, must have a front desk employee on site for every 200 guests rooms. All occupied guest rooms must be cleaned and sanitized every day, even if a guest doesn't want someone in their room, Simonetta noted. Legislation signed into law requires that the state adopt sanitization protocols for hotels that mirror these guidelines currently in place by executive order.
"The hotels would not open without being safe," Simonetta added.
The national association representing hotels released a 20-point plan related to keeping properties safe.
In the commercial mortgage-backed securities market, the hotel segment has been the most impacted since the beginning of the pandemic, according to a report compiled by Trepp. As of July 2020, 23.4% of loans were 30 or more days delinquent. That figure was at 1.3% at the end of 2019.
"You will see especially the smaller independent hotels not be able to make it out," said Marilou Halvorsen, president and CEO of the New Jersey Restaurant & Hospitality Association.
Hirsch, with Montreal Beach Resort, said a number of guests have pushed their reservations to 2021. Still, he can't imagine next summer will be free of COVID-19 concerns and impacts.
"It's going to take a couple years before we get to that, back to that level of confidence," Hirsch said.
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