When COVID-19 devastated the nation, the hotel and hospitality industry was hardest hit and suffered huge losses in 2020.
Hotels in the Santa Clarita Valley have been able to rebound, however, with occupancy rates gradually rising and recently beginning to stabilize at pre-pandemic levels, according to Evan Thomason, a partner on economic development for the city of Santa Clarita.
“When our economy recovers, hotels will certainly come back and get business,” said Thomason. “We hope that opening up the state means even better things for the hotels.”
At SCV, the film industry helped hotels survive last year as film productions used local hotels to create their own bubble and in some cases rented the entire hotel for several weeks to house their crews.
Holly Schoeder, CEO and President of SCV Economic Development Corp. said this is the perfect opportunity for the SCV with the reopening of Six Flags Magic Mountain on-site.
In addition, new hotels have hit the market at the SCV, and this, along with the reopening of the theme park, gives community leaders hope for a further revitalization of the hotel and hospitality industry.
In March, hotel occupancy rates in the city of Santa Clarita were reportedly 82.1%, a return to the city’s average pre-pandemic average of over 80%, Thomason added.
SCV hotels, including the Best Western Inn & Suites, are recovering as pandemic restrictions are lifted. 061121. Dan Watson / The Signal
While those rates appeared to be falling in April with a reported occupancy of 65.1%, Thomason said those numbers were misleading as new hotels went online but weren’t counted at the time.
In fact, the city imposed more transitional taxes in April than in March, which means more rooms were being rented, Thomason added.
Return from rock bottom
Hotels hit rock bottom with an occupancy of 18% in Santa Clarita in April 2020, Thomason said.
Nationwide, the pandemic was devastating to the hospitality workforce, which, according to the U.S. Bureau of Labor Statistics, has shed nearly 4 million jobs compared to the same point in time in 2019.
Then, after an already brutal year, the resurgence of COVID-19 outbreaks and renewed travel restrictions in late 2020 resulted in the hospitality industry continuing to decline significantly.
Hotel Lexen in Newhall is one of the new hotels to open in the Santa Clarita Valley. 061121. Dan Watson / The Signal
Santa Clarita city hotel occupancy illustrated reopenings and closings, with occupancy falling from 73.6% in October to a low of 46.7% in December.
A survey by the American Hotel & Lodging Association in November found that 77% of hotels reported having to lay off more employees, while 71% of hoteliers said they would not survive another six months without government support.
Since then, the industry has started to bounce back, with around 200,000 jobs expected to be filled this year, according to the Bureau of Labor Statistics.
However, the office reported that the lodging sector is facing an unemployment rate of 18.9%, leaving nearly 500,000 jobs below the pre-pandemic industry’s 2.3 million employment, according to the AHLA forecast report for 2021.
In addition, the AHLA report indicates that half of US hotel rooms are expected to remain empty in 2021.
New hotels conquer the market in SCV
While vacation travel is expected to return first, with travelers optimistic about the state’s reopening and 56% of Americans saying they are likely to travel for leisure or leisure in 2021, business travel is the largest source of hotel revenue, according to AHLA, business travel is expected to be low and are unlikely to return to 2019 levels until at least 2023 or 2024.
Holiday Inn Express & Suites is one of those SCV hotels that will recover when the pandemic subsides. 061121. Dan Watson / The Signal
“For my part, I’m a little more optimistic when business trips recover faster than people have suggested … because I think the value of actually being with your customers, with your suppliers, is really important for business transactions,” added Schröder . “Businesses will want to be back out there talking to their customers and rebuilding and strengthening those relationships, and that will be part of what brings business travel back sooner than others have predicted.”
“At the beginning of summer, people are eager to get off and travel,” said Thomason. “We have always been a strong drive market, and this is really the first travel segment in which we will see and have already seen a very large increase.”
With new hotels launching in the SCV as the state prepares to fully reopen, Santa Clarita City officials expect occupancy numbers to stay in the 70-80% range this summer.
New hotels include the Lexen Hotel in Newhall and the newly constructed hotels on Wayne Mills Place near Magic Mountain, including the Holiday Inn Express and Best Western.
The number of hotel rooms within the city limits has increased by more than 35% since April, with more than 1,100 hotel rooms now in the SCV, according to Thomason, and more are expected to open by the end of the year.
While the addition of these rooms will result in an initial drop in occupancy, as suggested by the city’s April numbers, Thomason said revenue will increase, which is a major contributor to the city’s budget.
“When we operate normally, the hotel’s temporary occupancy tax generates over $ 3 million a year that goes straight into the general fund, so that’s a big deal,” added Thomason. “We expect the new hotel rooms to go online as soon as the numbers stabilize.”
