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.”

Please enable JavaScript to view this content.

Editor's note: You can comment on IBJ stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Please note our updated comment policy that will govern how comments are moderated.

7 thoughts on “Lobbying group says two-thirds of Indiana’s hotels facing closure

  1. It is very difficult to get a hotel or restaurant reservation out West. News! The virus was/is there. However, riots were not there. I went through Chicago, which is a wreck, and the contrast is not Covid but riots. That is what has closed Indy and other cities. You can wear a mask and socially distance, but you can’t protect yourself from violence. That is why nonviolent and well run cities and towns are thriving.

    1. Just wait until all of the trade shows and conventions move out – Orlando and Vegas are openly stealing trade shows from Chicago. Indy will lose shows to Nashville and Dallas [Grapevine].

      The massive International Dairy Deli Bakery Show that was canceled in June does not have Indianapolis on their future schedule. Closed restaurants and hotels do not attract visitors or professional events.

  2. Thank’s to our Mayor!!!!
    Our highways and city streets are a trash dump.
    Un safe dirty old road signs mangled and laying in the median’s for years. Im so embarrassed of Indianapolis and indiana highway’s looks like little Chicago!

    1. Craig – Is there any news story that doesn’t come back to the state of our highways with you? Every comment is nearly identical. What are you hoping to accomplish? Genuinely curious here

  3. I wonder what Brainard will do when Carmel has to close his grand $58.5 million hotel? I hope the city council is discussing other functional options for this over budget piece of real estate. Wait! All us Carmel taxpayers can populate the building with more goofy looking, expensive statues!

{{ articles_remaining }}
Free {{ article_text }} Remaining
{{ articles_remaining }}
Free {{ article_text }} Remaining Article limit resets in {{ count_down }} days.