Events, lifestyle supply have energized Columbus market
 
Events, lifestyle supply have energized Columbus market
25 MARCH 2020 8:21 AM

Before the coronavirus pandemic took its toll on hotels in the U.S., the Columbus hotel market was benefiting from large corporate meetings and strong sports-related business.

COLUMBUS—The emergence of new types of hotel supply and demand generators in recent years has positioned the Columbus hotel market for growth, though the coronavirus pandemic now has dealt it, and nearly every market, a significant setback.

Joe Savarise, executive director of the Ohio Hotel & Lodging Association, said Columbus hotels remain open, but some properties are seeing “historically low occupancy rates, dipping into the low teens” as a result of the outbreak.

“That said, hotels are an essential business. In addition to providing necessary accommodations for travelers and local residents who may be temporarily displaced, hotels serve essential government travelers, first responders and others who are necessary to fighting the spread of disease or otherwise responding to disasters,” he said. “For that reason, we urge the state to not subject hotels to mandatory closure, but to leave that decision up to each business.”

The OHLA is working with state and national officials to establish programs to “provide immediate and long-term relief to hotel owners and operators,” he said.

“We will need to speed (up) assistance to our industry because it is hit worst and first,” Savarise said. “To make it to any recovery phase, we must provide a bridge for these essential businesses that are suffering due to the government-mandated response to COVID-19.”

According to February data from STR, parent company of Hotel News Now, occupancy in the Columbus hotel market fell 2.4% year-over-year to 60.2%. Average daily rate decreased 0.4% to $103.22 while revenue per available room declined 2.8% to $62.10 over the same period.

As of February, the market had eight hotels with 901 rooms in final planning, 20 hotels with 2,286 rooms in construction and 18 properties with 1,583 rooms in planning, STR data shows.

Alan Assaf, COO of development and management company Indus Hotels, which has eight hotels in the Columbus market with four in development, said “The devastation to our market, as with most markets across the country, has been sudden and severe.”

“Over 90% of our workforce has been idled, and occupancy at many of our hotels is in the single digits. Some hotels in Columbus have closed, and many more likely will,” he said. “Indus Hotels has been in business for over two decades, and the actions that we are taking today will ensure that we are around for the next several decades. We will get through this. We look forward to welcoming our team members back, and to providing the exceptional service that our customers expect.”

Columbus pre-COVID-19
Before the effects of the COVID-19 outbreak began to set in, Columbus was experiencing a game-changing moment in which the city was pulling bigger, longer events that could support higher room rates and more visitor spending, Savarise said.

The American Society of Association Executives held their annual conference in Columbus for the first time in 2019, which really put the city on the map, he said.

It was the most highly-rated ASAE event ever and “wowed at every level of service,” he added.

Assaf said because Columbus is the capital of Ohio, it sees steady demand from high school and statewide athletic events. These activities go into summer, and from there, corporate demand and road-warrior travel starts to pick up, he said.

“That’s your midweek bread and butter,” he said. “Then the weekends are supported by all that leisure activity or sports-related market activity. Summer months are great. Believe it or not, the only unknown variable really is the month of August (which depends on) vacations.”

Hotel demand is also typically “decent” in the fall, but not as much in the winter, he added.

“Because we are state capital, every year there are our elections to local boards, like school boards, for example. All those newly elected school board attendees descend on Columbus for a couple of days after the election for orientation, so November turns out to be a pretty good convention month,” he said.

Supply change
The addition of unique hotel supply—such as the 167-room Canopy by Hilton Columbus Downtown Short North, which opened in July 2019; and an Aloft property in development, both Indus Hotels projects—also benefits the market.

As the market evolves, it is drawing more of these types of lifestyle hotels, Assaf said.

Assaf previously worked for local investment firm Rockbridge for 25 years, and he said there would often be internal debates about if and when Columbus could support lifestyle and luxury hotels because, at the time, people weren’t willing to pay for those experiences.

This changed when The Joseph, a Le Méridien property, opened several years ago in the Short North and took a firm stance on luxury and charging a luxury rate in the city, he said.

“Based on that property, that success, there was a realization that … maybe this market has matured enough and is ready for this type of product,” he said.

That coincided with a shift in consumer behavior, with guests wanting authentic, experiential stays that connect with the local neighborhood, he said.

Editor’s note: HNN spoke with these sources in late February and early March, before the COVID-19 outbreak had a big effect on hotels in the U.S., and followed up for their response to the current situation between 17-24 March.

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