Without Football, In-Person Classes, College Park Hotels Face 'Most Serious Of Situations'
The end of the summer is typically one of the busiest periods for College Park hotels, with parents bringing students back to campus and sports teams gearing up for the fall season, but the pandemic is preventing that activity from happening this year.
The University of Maryland announced last week it is beginning its fall semester online and will not hold in-person classes until at least Sept. 14. Also last week, the Big Ten became the first major conference to postpone the fall sports season, meaning the Terrapins will not play football games in College Park this year.
Southern Management CEO Suzanne Hillman, whose company owns The Hotel at UMD and the Cambria Hotel College Park, discussed the impact of these steps last week on Bisnow's Reopening Prince George's County webinar. She said the university demand is "absolutely critical" for the company's College Park hotels, which she said are experiencing major challenges.
"The little bit of business we had left, we were housing the [Maryland] football team, because they needed to be isolated to be safe, and that is gone now," Hillman said. "In addition, we had the NFL housed, and if the restrictions are maintained the way they are, we're actually in jeopardy now. This is the most serious of situations."
The Hotel at UMD, a 297-room hotel with 43K SF of meeting space, which opened in 2017, temporarily closed in March and laid off 150 people. Additionally, two out of the four restaurants in the hotel closed, and its Red Door Spa filed for bankruptcy, Hillman said.
The hotel reopened June 1, but Hillman said its performance this summer has been below her expectations. She said the hotel's average daily rate has been around two-thirds of what it had projected.
Southern Management has implemented new cleaning and safety procedures through a program branded as Ever Strong, and she said the guests who have stayed there have given positive feedback on the measures. But she said demand remains far below normal levels, and most people still do not feel comfortable traveling.
"There is a severe, significant impact on the hotel, and I do not see it coming back quickly," Hillman said. "People are generally afraid."
While College Park's hotels are struggling because of the lack of university activity, the performance of National Harbor's hotels is improving as residents around the region take trips by car to the waterfront destination, Peterson Cos. CEO Jon Peterson said.
Peterson said National Harbor's hotels, including the Wyndham, Residence Inn by Marriott, Hampton Inn & Suites and The Westin, have been close to full occupancy on the weekends over the last month. But during the week, they are still around 30% to 40% occupancy as the continued closure of the Gaylord National Resort & Convention Center has reduced weekday activity.
"People are looking at National Harbor as a drive-to location, so that helps some with regard to hotels," Peterson said. "Gaylord is not opening until at least the end of the year, so that definitely has a negative effect, but mainly during the weekday when conventions are there."
National Harbor's restaurants have also seen their traffic increase during the weekends this summer, Peterson said, but they are still facing the difficulties the restaurant industry has experiencing across the country.
"The reality is not everyone is going to come out the other side of this," Peterson said. "We recognize that restaurants really need flexibility, so we've tried to work with them as much as we can."
Prince George's County Deputy Chief Administrative Officer for Economic Development Angie Rodgers said hotels and restaurants have been the businesses experiencing the most damage from the pandemic.
"Small businesses have been really badly hurt, and our restaurant and retail and hospitality sectors are continuing to bear the brunt of this slowdown, not just locally but around the nation," Rodgers said.
The county launched a $20M grant program for small businesses and received more than 900 applications, Rodgers said. Maryland is now in its second phase of the reopening process, moving slower than some other states, but Rodgers said this patience will ultimately benefit businesses.
"We want to see the economy come back as quickly as possible, and that all depends on our ability to contain the virus in the county," Rodgers said. "I'm encouraged by the progress we're making to slow the spread of the virus and to address business growth in our county despite some of the setbacks."