The uncertainty around the future of business travel is stifling Charlotte’s hotel industry, leading to layoffs, projects being put on hold, and even closures.
Why it matters: Charlotte is a business town. During non-pandemic times, companies hold conferences and events and meetings here, fueling demand for thousands of hotel rooms in and around Uptown.
- Without those crucial weekday out-of-town travelers, hotels face steep revenue declines.
The big picture: Even as people return to offices, the pandemic’s effect on business travel could be lasting, as Axios’ Erica Pandey wrote. The decline of business travel could cost thousands of jobs and force small businesses to close.
- The pandemic could cut business travel by up to 36% permanently, according to a recent Wall Street Journal analysis.
Charlotte is starting to host some meeting and small events again. The the Religious Conference Management Association was the city’s first conference since the scaled-back RNC, according to Karen Brand, spokesperson for the Charlotte Regional Visitors Authority.
- “But we expect it may still take a while to transition back to hosting events at their original capacity, making recovery a little uneven,” Brand said in an email.
The ongoing slump in business travel has given developers pause about new projects. In and around Uptown, there are at least four confirmed hotels on hold right now, accounting for more than 800 rooms.
- The Moxy: A 208-room Marriott-branded boutique hotel at Brevard and 4th streets.
- Intercontinental: The 250-room hotel at the Carolina Theatre site.
- Hotel at The Ellis: The 211-room hotel at The Ellis tower in First Ward.
- Courtyard by Marriott hotel: A 135-room hotel in Dilworth on the corner of East Worthington and Cleveland, as the Charlotte Ledger reported last week.
The Charlotte hotel market has been devastated, BPR Properties president Birju Patel told me a few weeks ago. BPR is the developer behind The Moxy and other hotels in town such as Embassy Suites. “If companies aren’t traveling, hotels Uptown basically have no business,” Patel said.
Cuts at various Marriott hotels around Charlotte resulted in the layoff or furlough of nearly 1,000 employees, the Observer wrote last summer.
- The hotels had to adjust their operations to account for “a steep overall decline in consumer demand amid travel and social distancing requirements,” a Marriott spokesperson told the paper.
An extended-stay hotel in University City recently permanently close, CBJ reported. Blaze Partners and Argosy Real Estate Partners bought the hotel, a Homewood Suites by Hilton Charlotte-North/University Research Park, for $8 million and plan to turn it into residences in coming months.
Yes, but: During a recent economic forecast discussion, UNC Charlotte Economist John Connaughton’s outlook for Charlotte’s hotel industry was a little rosier.
“My guess is this will be an iffy year. But I fully expect that industry to come back pretty quickly in 2022 if we get to herd immunity,” Connaughton said.