Pandemic Slams State’s Hotels

For 13 years, Charlie Eggen has managed the Holiday Inn Express & Suites in Verona with a team of nearly 100 people who have welcomed corporate clients, wedding parties and youth sports groups to their property.

But on Nov. 1, Eggen made the tough decision to close. He’s hoping the hotel will only be shut down for three months. But he’s out of money.

Since the coronavirus pandemic began this spring, revenue has been down 80 percent at the Holiday Inn and the other property Eggen manages, Fairfield by Marriott Inn & Suites in Verona.

“It’s very sad to have a business that you’ve put your heart and soul and blood, sweat and tears into for 13 years — to have to close that hotel and lay off nearly 100 employees is heart wrenching,” Eggen said. “It’s an awful feeling and an awful reality of the world right now.”

Eggen isn’t alone.

A survey released Nov. 10 from the Wisconsin Hotel and Lodging Association found that more than 47 percent of the hotel and lodging properties in Wisconsin will close within the next six months without loan or grant assistance, said Bill Elliot, who heads the association.

On Oct. 29, Wisconsin closed applications for a $20 million grant program for the lodging industry. As of Wednesday, awards have not yet been announced.

“While we are extremely grateful that this program was put into place, we are afraid that it is far too little to help our industry survive,” Elliot said.

Greg Hanis, president of Brookfield-based Hospitality Marketers International, has been a hotel industry analyst for nearly 40 years. He has never seen the industry in this much trouble.

“I’ve gone through the oil embargoes, I’ve gone through the recessions, various situations have impacted the hotels over the 38 years I have been doing this and I have never seen this before,” Hanis said. “It could go from small markets all the way up to the major convention hotels in Milwaukee.”

Hanis said the loss of group events and business travel will make it very difficult for many hotels to make it through the next several months.

“How well they are financially structured with debt and their lenders will determine whether they have enough resources to get through the winter,” Hanis said.

The Milwaukee-based Marcus Corp., which has 17 hotels, including six in Wisconsin, held an earnings call with investors Nov. 3 reporting a third quarter loss of $39.4 million.

The company laid off 425 hotel employees in Milwaukee, Madison and Lake Geneva in June.

“Admittedly, it’s hard not to wonder what the quarter might have been like in non-COVID world with the Democratic National Convention and the Ryder Cup, but it was not to be,” Marcus CEO Greg Marcus said during the earnings call.

Marcus said the company would continue to monitor the economic environment very closely. But after past shocks to the system, such as 9/11 and the Great Recession, hotel demand took longer to recover than other sectors of the economy.

Listen to the WPR report here.

Wisconsin Hotels Suffer As Pandemic Shows No Signs Of Relenting was originally published by Wisconsin Public Radio.