A NASA satellite image of Hurricane Sandy as it passed over Cuba earlier in the week.
REPORT FROM THE U.S.—As the waters recede and the winds die down, hoteliers across the East Coast and into the Midwest are beginning to assess the damage from Hurricane Sandy.
The storm, which was designated a “post-tropical cyclone” by the time it made landfall at 8 p.m. Monday near Atlantic City, New Jersey, destroyed thousands of homes, left millions without power and grounded 18,445 flights as of Tuesday afternoon, according to FlightStats.com.
The potential impact on the hotel industry, as measured by performance, closures and destruction, was still unclear as of Wednesday morning.
Data from STR, parent company of HotelNewsNow.com, offered at least a peek at the effects felt in New York, parts of which were still suffering from flooding and power outages at press time.
“We were pleasantly surprised when 95 hotels in New York City submitted their daily performance data from Monday night to us. Normally our New York daily sample is about 175 hotels, and of course some properties were impacted by the storm,” said Jan Freitag, senior VP of global development for STR.
“The performance of the hotels that did report to us was not materially different from any other Monday in NYC, with occupancy just above 80% and an (average daily rate) around $290. So far our data is showing no impact positively or negatively from the storm.”
East Coast hoteliers: Use #sandyhotelnews on Twitter to provide information on the situation at your property. Provide weather updates/photos, open/close information, vacancy, cancellation policies, etc. Your tweets will appear here.
“We expect this week’s hotel performance numbers will allow us to get a good sense of the impact of the storm when we release the full data set next Wednesday morning,” he said.
Sandy fell in a week that was already seeing some booking softness due to Halloween falling midweek, said Nikhil Bhalla, a senior lodging analyst at FBR & Company, in a research note.
“Although typically the disruption impact to hotels during a natural disaster is often at least partially offset by reconstruction activity in the affected area (as was the case in New Orleans following Hurricane Katrina), it remains to be seen how much of the negative impact will be offset by recovery efforts this time,” Bhalla said. At least in the near term, he said he expects Hurricane Sandy to potentially have 50 to 100 basis points of impact to fourth-quarter U.S. hotel revenue-per-available-room growth.
“We believe that the impact is likely to be more significant (100 bps to 200 bps) across the lodging (real-estate investment trusts),” he said.
Atlantic City, New Jersey
Sandy first made landfall near Atlantic City around high tide Monday night, turning the famed strip of casino-hotels into an extension of the Atlantic Ocean. Although most of the boardwalk was stripped away, there was only one reported fatality and most of the casino strip suffered only flood damage.
“Atlantic City itself is closed; there is a lot of flooding in the city,” said Howard Bacharach, executive director of the Atlantic City Hotel & Lodging Association. “However, it seems like the casino-hotels made out fairly well. Damage was limited to the ground floor.”
Bacharach told HotelNewsNow.com there was a tentative plan to reopen all 12 casino-hotels simultaneously as early as Friday or Saturday. Emergency crews spent most of Tuesday evaluating the situation and were expected to begin restoring electricity Wednesday.
Damage off the strip was expected to be worse, Bacharach said. According to STR, there are 119 hotels representing 24,847 rooms in the Atlantic City market. Most of them were forced to initiate some form of guest evacuation by Sunday night. Bacharach said the evacuation process “worked out very well.”
“There was advanced notice,” he said. “We started getting information on Friday that the city would evacuate by Sunday evening. I imagine residents that did stay were sorry they did because they went through hell.”
The staff at the Sheraton Atlantic City Hotel, which is connected to the convention center three blocks off the strip, started the emergency response process as soon as it heard the storm was headed directly for Atlantic City. The hotel closed its doors Saturday in advance of the storm.
“As soon as the governor issued the state of emergency, we automatically started the next phase,” said Carla Caulk, director of sales and marketing. “We started alerting guests that for their own safety Atlantic City is not a safe place to be. We wanted to get folks out as soon as possible. Our goal was to get everybody out by the time the governor wanted everybody out.”
Caulk said, for the most part, all guests were cooperative.
“Everyone acts a little differently in an emergency,” she said. “We tried to be patient with people and tried to understand what everyone was going through.”
As difficult as it is to attach a financial number to the storm’s impact in Atlantic City, Bacharach called it “significant.”
“The casino industry—they each generate about $5 million a day,” he said. “That’s what (its) losing per day in revenues. Of course there are expenses related to that that they’re not incurring, but they’re not going to start doing business again until really next week.”
“It’s another real hit,” he continued. “The economy has been bad enough and this is just on top of it.”
Restoring power and mass transit remain the two biggest challenges for New York in the days ahead, Mayor Michael Bloomberg said Tuesday.
“That recovery is a mammoth job,” he said, noting the process could take days.
Fortunately, at least two hoteliers are reporting normal—if not unusually busy and hectic—operating conditions on property.
“We are safe and sound,” said Hervé Houdré, GM of the InterContinental New York Barclay, via email. “The hotel is quite full, and we have been taking extra efforts, like organizing a pick-up van to help staff members from Brooklyn and Queens who are able to come to the hotel. We are facing an increased need for rooms by people from lower Manhattan who are without water and electricity and are doing everything possible to provide rooms. Nearly all hotels in midtown and uptown are full.”
A few blocks to the southwest, the Tryp New York City Times Square South was similarly busy with approximately 225 guests, reported GM Frank C. Nicholas, also via email.
“We have extended stays to accommodate flight delays and extended hours of operation in our restaurant and bar to accommodate their needs not wanting people to venture out in inclement weather,” he wrote. “We loaned out Google Chrome laptops for children to play with as well as had many staff stay in the hotel so that we did not have to curtail services.”
Guests remained good natured throughout the event, Nicholas said, despite a swell in media reports regarding the severity of the storm.
“After being in NYC for 25 years and experiencing blackouts and emergency situation like 9/11, there is nothing like a disaster to bring people—of all types of people, as 60% of our clientele is European—together. While we don't hope for any more disasters, it is an interesting phenomenon,” he said.
Disaster preparedness plans put hoteliers in Washington, D.C., and its surrounding areas one step ahead of the storm, which brought up to 7 inches of rain and wind gusts of up to 70 mph in some areas of the market.
At the Crowne Plaza Tysons Corner in Northern Virginia, GM Trish Drews met with her management team Friday morning to review the facts available about the storm headed their way and discuss what they needed to do to ensure guest safety.
“The basic essentials of having and ordering additional food, water, flashlights and batteries were handled by our appropriate department heads. Operational management and staff members were told to arrive for their scheduled shifts on Monday prepared to stay in the hotel for a few days. Their safety and security was critical as well as ensuring the guests were taken care of,” Drews wrote in an email to HotelNewsNow.com.
As for the impact to customers, a memo was prepared for each arriving guest, detailing what they could expect from the Crowne Plaza, she said. Information about where to park their cars to avoid debris, the hotel’s generator functionality and food operations kept guests informed and allowed the staff to operate as smoothly as possible.
“As a result, all went well and, fortunately, our hotel weathered the storm and our guests appreciated all we did for them,” Drews said.
Steve McPherson, front office manager at the Hilton Garden Inn Washington D.C/Bethesda in Bethesda, Maryland, said the hotel’s disaster plan also was helpful in dealing with the storm from an operational standpoint. Occupancy, however, took quite a hit.
“Right now (occupancy) is not as good as we would have liked. Quite a number of guests have canceled, and quite a number have checked out early,” McPherson said.
Occupancy also was affected by guests from the community preparing themselves for the worst. “Quite a number of people pre-booked early in the event that they would have lost power, but no one’s lost power that I know of, so some people canceled … because the hurricane didn’t hit as badly,” McPherson said.
There’s been no major damage in the area, he said.
Looking ahead to the rest of the week, McPherson said: “Pretty much most of the guests who have canceled so far had reservations for a number of days … so that sort of impacted for the rest of the week.”
By the weekend the hotel should be back up to a 60% to 65% range in occupancy, he said.
Many parts of West Virginia experienced high winds, flooding and blizzard-like conditions associated with the storm.
Carol Fulks, executive director at the West Virginia Hospitality and Travel Association, said most of the Charleston, West Virginia, area (where her office is located) kept power. Downtown Charleston hotels were open, she said.
The Embassy Suites Charleston had power and was at 100% occupancy on Tuesday night during the brunt of the snowstorm, according to an employee of the hotel.
“Shelters are also open in the area,” Fulks added.
“Most of the state was prepared," she continued, adding that Snowshoe Mountain Ski Resort and Stonewall Resort received a lot of snow.