As the nation deals with the economic impacts from COVID-19, the pandemic has also taken its toll on Chapel Hill's hospitality and tourism industry.
On July 7, the Carolina Inn filed a WARN Act notice with the state Department of Commerce stating that the hotel would be extending furloughs for 217 employees.
In the notice, General Manager Mark Sherburne wrote that employees were impacted by temporary furloughs that started back on April 5, but these will now be extended.
“We initially anticipated that employee furloughs at the Hotel would be temporary,” Sherburne wrote. “Due to the sudden, dramatic, and unforeseeable additional impact of this pandemic on our business that is outside of our control, unfortunately, we must now separate some employees permanently and plan for some extended layoffs and furloughs that may exceed 6 months.”
Laurie Paolicelli, the executive director of the Chapel Hill/Orange County Visitors Bureau, said using hotel occupancy as a metric, the hotel industry is down nearly 70 percent, according to reports from April to June.
In an email statement sent to Paolicelli which she then forwarded to The Daily Tar Heel, Sherburne said due to difficulties caused by the COVID-19 pandemic, these actions were necessary to maintain business.
“These painful decisions were necessary to preserve the hotel’s business so that we can emerge from this crisis intact and ultimately be in a position to rebuild both our business and our world-class team when the hospitality industry rebounds and when our guests and customers once again choose The Carolina Inn,” he said.
Carolina Inn declined to further comment.
Aaron Nelson, president and CEO of the Chapel Hill-Carrboro Chamber of Commerce, said the levels of occupancy in local hotels have fluctuated during the pandemic.
“We saw it go down as low as five percent occupancy,” he said. “And then since then, there have been a couple of weekends that have been as high as 60 percent occupancy. But, we are hearing in general, 15 percent to 20 percent is sort of the average occupancy."
Nelson also said that the Chamber has seen average daily rates for hotels decline to some of the lowest levels since 9/11.
“The average daily rate is declining, and that can be problematic as hotels continue to lower prices in order to try to get the traveler,” he said. “It is a downward cycle though, because then even if you get the traveler you're not getting much revenue from them.”
Nelson said some of the hotels were able to receive federal aid, but has often depended on eligibility requirements.
“Some are eligible and some are not,” he said. “Some have gotten PPP funds and those are helping them stay alive during this time. Most hotels, I think, applied for PPP funds, and were successful in getting them.”
In terms of the future, both Nelson and Paolicelli say they're optimistic for the industry's recovery.
“We believe that the COVID-19 realities have resulted in a lack of consumer confidence where travel and tourism is concerned,” said Paolicelli. “We are optimistic for the long haul but we will continue to invest dollars in PPE, safety and sanitation efforts at our hotels, restaurants and retail facilities.”
Nelson cited local hospitals have been bringing in visitors.
“As our hospitals are able to do more of the surgeries and more of the services, we've seen some increase in people that are here for medical purposes,” he said. “People are here for their surgery and they need a place to stay while they recover or their families.”
He also said he believes the safety of Chapel Hill should inspire visitors to explore the community.
“We are a safer community to be in than many other places,” he said. “People looking for a safe place with great food and a walkable community, we’re a great place for them to come.”
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