Lobbying group says two-thirds of Indiana’s hotels facing closure

A national lobbying group said Tuesday the coronavirus pandemic could claim two-thirds of Indiana’s hotels in the months ahead if additional financial relief for the industry isn’t made available.

The American Hotel & Lodging Association, citing figures from a national survey of its members earlier this month, estimates nearly 700 of the state’s 1,042 hotels will permanently shut down within the next six months without additional funding.  The survey also found that nearly half—about 511—of the state’s hotels could face foreclosure without additional aid.

The survey paints a bleak picture for the nation’s hospitality industry and is meant to underscore what the lobbying group says is a critical need for additional stimulus ahead of Congress breaking for its October recess. The entity is calling for extended Paycheck Protection Program loans and other lending maneuvers to be part of a future stimulus bill.

Some Indianapolis hotels were thought to be in a precarious position with their loans even before the pandemic began, and others were expected to follow in the downward spiral. It’s not clear now whether things have improved for those properties.

“It’s time for Congress to put politics aside and prioritize American workers in the hardest-hit industries,” Chip Rogers, president and CEO of the American Hotel & Lodging Association, said in a written statement. Nationwide, the hospitality industry is considered by experts to be one of the hardest hit.

In a statement, Visit Indy Vice President Chris Gahl said the current conditions are a severe fall from grace for a city whose “tourism (industry) as a whole was at an all-time high” before the pandemic—including a run of seven years (2013-2019) with downtown hotel occupancy above 70%.

“The sudden impact of COVID-19, with hotels now operating in crisis mode for more than 200 days straight, has significantly eroded revenue and caused some hotels enough financial pain to close doors,” he said. Relief for these hotels is paramount toward mounting a comeback.”

And while occupancy has slowly improved on weekends for many hotels, with an uptick in activity at and near the Indiana Convention Center,  there’s been little marked occupancy or rate growth on weekdays.

Already, hotels and hotel-supporting businesses across the state have laid off or furloughed thousands of workers since the pandemic began in March, with a few downtown hotels closing for more than two months.

The survey estimates Indiana had nearly 25,000 individuals working in hotels before COVID, and has lost about 9,500 through September because of the virus’ impact on the travel industry. Additionally, another 110,000 jobs were supported by the hotel industry earlier in the year, with more than 25,000 of those lost through September.

The lobbying group’s survey found that a total of 17,500 direct hotel jobs and 49,500 supported jobs will be lost without additional federal aid. More than 1.6 million hotel jobs and 3.7 million supported jobs could be lost across the United States without aid, the survey found.

“Thousands of hotels across America are in jeopardy of closing forever, and that will have a ripple effect throughout our communities for years to come,” said Rogers. “It is imperative that Congress act now before leaving town, or thousands of small businesses and the jobs associated with them will be lost. The American people cannot wait for relief. Congress needs to act now.”