Hotels, early economic victims of the COVID-19 pandemic, are still struggling, even as thousands are being vaccinated each day.
About 35 percent of Rochester’s 5,666 hotel rooms were occupied in January, compared to about 56 percent occupancy in January 2020. Revenue per available room was down 44 percent compared to the same period last year.
“The hospitality industry, including hotels and restaurants, were probably the first businesses to be affected by the pandemic. And we’ll probably be the last to come back to full capacity,” said Experience Rochester President Joe Ward. “And that makes sense, as hard as that is to swallow.”
However, hotel rooms in Rochester are filling up quicker than elsewhere, as patients return to Mayo Clinic. Ward pointed out that while Rochester saw a few temporary hotel closures early in the pandemic, the city has not seen the permanent hotel closures that have hit other cities.
January’s 35 percent occupancy doesn’t look bad compared to the 15 percent rates Rochester hotels reported in the spring of 2020. Many other cities without a Mayo Clinic are still seeing occupancy rates of 15 percent, said Ward.
Michelle Milde, director of marketing for Avra Hospitality, said about 90 percent of the guests staying at the new downtown Hilton, DoubleTree By Hilton and the Hilton Garden Inn in 2021 have been Mayo Clinic patients.
While the Hilton's occupancy was down about 20 percent in January, Milde said things are slowly improving.
“We are moving the right direction as far as occupancy,” she said. “Our team is optimistic.”
Med City hotels are certainly faring better than many of their counterparts in other Minnesota cities.
Minneapolis hotels reported 14 percent year-to-date rates in January, while St. Cloud hotels were at 24 percent, according to data released by Explore Minnesota Tourism this week. The combined rate for all Minnesota hotels was 30 percent in January.
While patients are returning to Mayo Clinic and Rochester hotels, they are not coming from as far away as in the past, said Mayo Clinic Chief Financial Officer Dennis Dahlen last week as he announced the clinic’s 2020 financial results.
“International travel is not back to normal,” he said. “People are staying closer to home.”
Ward confirmed that Rochester hotels are not seeing as many guests flying into town, either from international or domestic destinations.
“When things started opening up some, the ‘Great American Drive started and Americans started taking road trips again instead of flying,” he said. “Most of the business coming to Mayo Clinic is coming more from a drive market instead of a fly market.”
That has resulted in more economically minded visitors coming to Rochester, which means extended stay and limited service hotels are seeing more guests return that the higher end hotels.
While medical traffic is picking up, the usual visitors for conventions and large events, such as weddings and music concerts, can’t come back until things are better. Ward said that while the Mayo Civic Center has been happy to host vaccination clinics, help with long distance learning and sheltering homeless people, he and his team are eager to get back to their usual work.
Full recovery probably won’t happen until later this year, at the earliest. The large annual meetings of Jehovah’s Witnesses will not resume until 2022.
The first big events at the Mayo Civic Center, unrelated to vaccination clinics, are tentatively scheduled for July 2021, with the calendar becoming busier in the fall and during the holiday season.
The Minnesota Assemblies of God has a gathering with an expected 3,200 attendees scheduled in October. The local Nerdin Out Con pop culture and comics convention is also slated for October. The twice rescheduled Jim Gaffigan comedy show is now slated for November.
As the grip of the pandemic loosens, Ward said people in the local hospitality industry are preparing for things to get better. That means bringing back employees and preparing to return to closer to normal levels as safely as possible.
“Hotels, restaurants and the Civic Center are working on our post-COVID plans to be poised and ready for the recovery,” he said.
One positive sign is the planned opening of the Med City’s newest hotel – Hyatt House Rochester. The $44 million, 172-unit extended stay hotel at the intersection of Civic Center Drive and First Avenue Northwest is expected to open on March 25.
Milde said the teams at Rochester’s Avra hotels are looking forward to the spring.
“We remain hopeful that things will continue to move in the right direction," she said. "From what we’ve seen in the last two months. ... We remain excited for the return to pre-pandemic numbers … We are enthusiastic about what we’re seeing at this point."