Running on empty: After lost spring, stunned hoteliers look to future 

  • James Mihalak, the general manager of Fairfield Inn and Suites by Marriott in Northampton, works the front desk last Friday. A marked-off area shows customers where to stand and a sign reminds them of social distancing guidelines. STAFF PHOTOS/JERREY ROBERTS

  • Luz Mercado, who works at Fairfield Inn and Suites by Marriott in Northampton, readies a room last Friday. STAFF PHOTO/JERREY ROBERTS

  • The closing of the pool and gym at Fairfield Inn and Suites by Marriott in Northampton are two of the changes necessary at the hotel to prevent the spread of COVID-19. STAFF PHOTO/JERREY ROBERTS

  • James Mihalak, who is the general manager of Fairfield Inn and Suites by Marriott in Northampton, works the front desk, Friday, May 22, 2020. A marked off area shows customers where to stand and a sign reminds them of social distancing guidelines. STAFF PHOTO/JERREY ROBERTS

  • Mansour Ghalibaf talks about the hotel business amid the COVID-19 pandemic at Hotel Northampton, one of the hotels he owns.

  • Mansour Ghalibaf talks about the hotel business amid the COVID-19 pandemic, Tuesday, May 26, 2020 at Hotel Northampton, one of the hotels he owns. STAFF PHOTO/JERREY ROBERTS

  • Mansour Ghalibaf talks about the hotel business at his Hotel Northampton. STAFF PHOTO/JERREY ROBERTS

  • Fairfield Inn and Suites by Marriott in Northampton, May 27, 2020. STAFF PHOTO/JERREY ROBERTS

  • Hotel Northampton, May 27, 2020. STAFF PHOTO/JERREY ROBERTS

Staff Writer
Published: 5/29/2020 11:55:26 AM

NORTHAMPTON — The financial challenges hotel owners in the region already face with long winters are usually overcome as the weather warms up. There are graduation ceremonies and reunions taking place. Prospective students are touring local college campuses. Visitors are heading to local attractions and athletes to local sports tournaments.

But the COVID-19 pandemic has dramatically changed the outlook for the local hospitality industry, making it unlikely that any who run local hotels will be able to get out of the red until sometime in 2021, at the earliest.

“For hotels in this market, the spring is when we can start thinking about some profits,” said J. Curtis Shumway, president of the Hampshire Hospitality Group, which runs four hotels in Hadley and one in Amherst. “Not only did that not happen, but we got handed this mess.”

“The month of May is one of the months we make money so we can operate,” said Mansour Ghalibaf, who operates the Hotel Northampton and the Fairfield Inn, both in Northampton. “The whole month is now a loss.”

“This has easily been the most trying two months of all of our hotel careers,” added Shardool Parmar, president of the Pioneer Valley Hotel Group and its five hotels and one banquet hall. “The level of disruption in business and tourism travel means everyone is experiencing a huge hardship.”

For the hotel operators, the efforts across the state to slow the spread of the novel coronavirus has forced dramatic changes that have included layoffs and closures.

Parmar said about 80% of his workers had to be let go, with only managers, front-desk staff and a limited number of housekeeping and janitorial staff remaining employed. The Hampton Inn and Rodeway Inn in Hadley, as well as the Hadley Farms Meeting House, all closed, with only the Homewood Suites extended stay hotel, and two other hotels in Ludlow and Springfield, remaining open.

Ghalibaf shut down the Hotel Northampton and Wiggins Tavern on March 17, but has continued to keep the Fairfield Inn open under prescribed conditions of only allowing certain clientele, such as first responders, doctors and nurses, and people in emergency situations, such as families who have lost their homes in disasters.

All but two of Hampshire Hospitality Group’s five hotels, the Courtyard by Marriott and Holiday Inn Express, both on Route 9 in Hadley, have been closed since early March due to the pandemic.

“It’s hard to express the feelings I had when I decided to shut down three of our five hotels. It all happened so fast,” Shumway said of the decision to close the Econolodge and Howard Johnson, also on Route 9 in Hadley, and University Lodge near the University of Massachusetts campus in Amherst.

All 200 employees throughout Shumway’s system were laid off, though 15 or so have continued so his company can “limp along” and have rooms available for those who need to isolate from their families and stem the transmission of the illness. It didn’t feel good to let employees go, he said.

“I was able to rest a little knowing that my employees would be getting extra payments in their unemployment checks and they would be OK,” Shumway said.

Ghalibaf said he had to furlough close to 100 employees, and like Shumway at least took solace in that those workers would be getting $600 a week in unemployment payments. A few have remained on to operate the Fairfield Inn and keep both properties clean.

Even with Fairfield Inn open, Ghalibaf estimates that it is only bringing in 10-12% of typical revenue.

Last week, Ghalibaf brought back some staff in anticipation that the restaurant could reopen, but the state has not given the go-ahead yet, so they are again off the payroll as he awaits more certainty about when he can serve diners both indoors and outdoors, and at what capacity it will be safe to do so.

“People who’ve been asked are ready to come back,” Ghalibaf said.

Shumway said he is still trying to figure out how to make it month to month and then to next year, but he has secured a loan from the federal Paycheck Protection Program that can return people to the payroll and ramp up for reopening.

“We hired back everyone that would come back. Business levels are at about 5% of normal times,” Shumway said.

As he brings people back, he is trying to keep them busy landscaping, cleaning, painting and organizing, as well as preparing for the new protocols that will be issued by the state for keeping guests safe.

“With the state reopening, we are hopeful we will have enough activity to start to rebuild and survive,” Shumway said.

But Shumway cautions about the uncertainty. “If things don’t dramatically improve over the next five weeks, we will again make adjustments,” he said.

Similarly, Parmar said he has Paycheck Protection Program loans approved for each of his company’s hotels, and more staff is coming back to begin the process of deep cleaning and training in various protocols and procedures that brand names are expecting.

“We are making sure staff are taking proper precautions that are not exposing themselves or creating exposure for guests,” Parmar said.

Ghalibaf also has received a loan from the Paycheck Protection Program, but hasn’t yet used the money and isn’t sure if he will.

“If we can use it we will use it, if we can’t we will return it,” Ghalibaf said.

‘Fight for survival’

Even if hotels can reopen under Phase 2 of Gov. Charlie Baker’s reopening plan, there is much uncertainty, as with hotels across the country.

This has prompted the American Hotel & Lodging Association to call on Congress to enact several steps to assist those who own hotels and inns, including extending the Paycheck Protection Program so rehiring and retention of employees can occur, providing tax credits so cleaning equipment and personal protective equipment can be purchased, offering relief for hotel commercial mortgages and giving Americans incentives to resume traveling.

The “Roadmap to Recovery” points to the April jobs report showing the hospitality and leisure industry was the hardest hit, losing 7.7 million jobs, or nearly as many jobs as the next four sectors combined.

“The hospitality industry is in a fight for survival,” said Chip Rogers, president and CEO of the Hotel & Lodging Association. “We are grateful to the leadership of both parties during one of the most difficult health and economic challenges we have faced. We are urging Congress to do even more to help the hotel industry so that our small business hotel operators can keep the lights on and retain and rehire employees.”

Parmar said hotels in the region are “in very dire shape” because events are not happening and demand is reduced, and these headwinds will continue if people are not coming to the area.

“We’ll be running in the red until next year. The best we can do is look to get close to breaking even,” Parmar said.

Ghalibaf said it has been difficult and he feels sorry for some of the businesses that can’t be sustained, observing that businesses are advised to have six months of reserve funds available, a challenge when there are mortgages, payrolls and other fixed costs to cover.

“You really cannot reserve that much money to prepare for an event like this. This wasn’t on anyone’s radar,” Ghalibaf said.

“In our business, food and beverage, the profit margin is very, very slim,” he added.

Ghalibaf said he is investing in supplies, such as large quantities of hand sanitizer, and will follow protocols for safety, such as wearing masks and doing temperature checks.

“If it wasn’t a matter of life and death it would be handled differently, but unfortunately we need to take as many precautions as we can,” Ghalibaf said.

How things will work out following the severe impacts of the pandemic is unknown.

“I’m hopeful we can make it but not without the help from the feds who gave the banks the OK to work with us,” Shumway said. “Without those initiatives and others who allowed delayed payments we and many others would never make it back. It’s frankly still way too soon to know who will make it. These are scary times.”

“Even if you open, people are not traveling because they are scared,” Ghalibaf said. “If we get out of all this, the sacrifice everyone made for the business will be worth it. I look forward to opening up and being back where we were.”

Scott Merzbach can be reached at smerzbach@gazettenet.com.


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