A brief, but robust, boom in business
Chattanooga hotels saw dramatic spike in occupancy following Easter tornadoes
The Chattanooga hotel market was the most occupied in the country in the week following devastating Easter Sunday tornadoes that displaced thousands of people and brought thousands more into town to help with recovery.
“We track this data globally, and because of that impact, you were [an] occupancy leader globally,” said Jan Freitag, senior vice president with hospitality benchmarking company STR.
In the week ending April 19, Hamilton County’s roughly 10,000 hotel rooms were about 60% occupied, making this market the third-most occupied in the world behind only Guam and Singapore, according to STR data. That doesn’t mean, however, that local room occupancy was high in the context of a normal economy, Freitag added.
“It was really low, but it was really high,” he said.
March and April are normally busy months for visitors to the Chattanooga area, with about 70% of Hamilton County’s hotel rooms booked in a typical March or April. The coronavirus crisis has devastated the hotel industry globally. In Chattanooga in April, room occupancy was down more than 36% from the same month in 2019. In March, it was down nearly 35%.
In the days and weeks following the storms, EPB brought in 1,500 people on utility crews who aided in cleanup. Morning Pointe moved 130 residents from two damaged facilities into two hotels in the area. And phones rang nonstop as locals whose homes were damaged or destroyed sought places to land, said Jay Raynor, the general manager of the Embassy Suites on Shallowford Road.
Raynor opened up two floors of the hotel that had been closed due to low occupancy to temporarily provide a secure environment for the displaced residents of the Morning Pointe elder care facilities, he said.
“We had the ability because we were slow,” he said. “We had the rooms cleaned and shut off so we were able to provide Morning Pointe with two floors they could be in by themselves.”
When the storms hit, the 203-room hotel was at about 35% occupancy. Immediately after, the facility was effectively full, as were most hotels in the area,
Raynor said.
“Even now, I probably still have 50 rooms in the hotel that are tornado victims that are long-term,” he said. “We’ve been more than half full ever since [the storms]. When you look at reporting across the city, country, world, there’s a lot of hotels way down in the teens as far as occupancy.”
His staff of 60 had been pared to about 50% before the storm, but he now has about 70% of his full crew working,
Raynor said.
The hotel industry has seen sweeping job losses in the last two months. Chattanooga-based Vision Hospitality cut about 1,100 of 1,500 jobs in March. In April, jobs in leisure and hospitality fell by 7.7 million, or 47%, according to the U.S. Bureau of Labor Statistics.
As cities and states slowly lift restrictions and allow businesses to reopen, demand has crept up over the last five weeks, Freitag said. The low point for hotel occupancy nationally seems to have come the week of
April 11, he said.
“The data is getting less bad, but this is not a reversal or a recovery,” he said. He doesn’t expect a return to 2019 levels until the end of 2023, Freitag added.
“I don’t want to give you the impression that this will be a V-shaped recovery or things are looking up,” he said. “Things are not looking dramatically better. They’re just less dire than they used to be.”