After having business decline sharply in March 2020 and into 2021 as the coronavirus pandemic emerged and then ravaged the nation, Long Beach hotels are finally experiencing near-normal business volumes, though challenges remain.
“January and February were a wash, but starting in March we’ve been beating 2019 numbers,” Imran Ahmed, general manager of Long Beach Marriott, said, adding that 2019 was a record year. “We’re doing extremely well.”
The downturn in 2020 was dramatic. After a record 2019, the hotel industry began the year with a strong two and a half months, Bruce Baltin, a director with PKF Hospitality Consulting, said. The recovery time for the industry, however, was actually very fast compared to other downturns such as the Great Recession, Baltin said.
“The recovery has been startling,” Baltin said. “I’ve been in this business for decades and I’ve seen a lot of downturns of various types, and this recovery is unique in how fast it’s built up steam.”
In 2007 and 2008, many individuals and families lost their homes and jobs, making travel all but impossible for years. During the pandemic, meanwhile, many people continued to work or collect increased amounts of unemployment—so the means to travel remained, but people were not allowed.
Once the pandemic began to wane, people jumped at the opportunity to travel, even if just short trips by car.
“The recovery is being led by the leisure segment,” Baltin said. “People were tired of being cooped up.”
The recovery is not the same across the country or around the world, Baltin said, noting that Long Beach has been faring better than other areas. Occupancy in Long Beach hotels through August is nearly 75%, according to STR data from CoStar Group, which is very strong considering the peak national average, which it reached in 2019, was 66%, according to Baltin.
In 2019, Long Beach hotel occupancy was 76% and the average daily room (ADR) rate was $157.11. The revenue per available room, or RevPar (a metric for hotel performance calculated by multiplying a hotel’s average daily room rate by its occupancy rate), was $119.47, CoStar data shows. Amid the pandemic the following year, occupancy dropped to 50%, ADR to $130.20 and RevPar to $65.13.
The city’s low occupancy, however, remained above the national average of 44%, according to data from GlobeSt.
Through August of this year, Long Beach hotel RevPar was 3.6% above the same period in 2019, according to Long Beach Convention & Visitors Bureau spokesperson Samantha Mehlinger. If hotel business continues as is, 2022 RevPar could be more than 10% higher than 2019 levels, according to CoStar data.
Hotels have sacrificed some on occupancy, which was down 2.3% through August, but made up for the loss with a 6% increase in the average daily rate. Despite the strong year, Mehlinger said the CVB projects the city will collect about 10% less transient occupancy tax (a tax paid by customers when they book a hotel room) than 2019, which was a record year.
Baltin said projections show the overall hotel industry should be consistently at or above pre-pandemic levels from mid-2023 on as long as conditions remain the same. Long Beach, however, could be faster, he said, a sentiment shared by Ahmed, who said his average occupancy for this year is 80%.
Looking ahead, “2023 is going to be a gangbuster year,” Ahmed said, noting that market conditions must remain the same. If the country slips into a true recession, that could impact hotel business, he said.
In addition to leisure travel, conventions and meetings also are playing a big role in Long Beach’s hotel recovery, Baltin said, noting the Long Beach Convention Center has been recognized nationally as a “very good center” for such events.
“[Conventions and meetings] have been spotty throughout the country depending on destination, but Long Beach has proven itself a very strong destination,” Baltin said.
Affordability, access to a small municipal airport and weather are among the reasons Long Beach has been successful in its recovery, Baltin said. Long Beach’s central location between Los Angeles attractions such as Universal Studios and various museums and Orange County attractions such as Disneyland and Knotts Berry Farm—not to mention the city’s own attractions such as the Aquarium of the Pacific—make it an ideal home base for travelers.
To further boost Long Beach’s leisure travel, the CVB took its marketing of the city as a destination to the next level through an unprecedented partnership with Visit California.
“It’s driving tourism into the city,” Ahmed said. “That was totally out-of-the-box thinking.”
Baltin said many Long Beach hotels, including the Hyatt Regency and Centric, the Hilton, the Westin and the Renaissance, used the downtime brought on by the pandemic to renovate with little-to-no impact on guests. The Marriott underwent a $22 million upgrade, Ahmed said, including guest rooms, meeting rooms, restaurants, public spaces and even the pool and other outdoor spaces.
Despite the strong business, Ahmed said one major challenge remains: staffing. Prior to COVID-19, the Marriott employed more than 200 people, he said. Today, the hotel has 149 employees who are working hard to keep up with record business, according to Ahmed.
“We have staffing companies helping us,” Ahmed said, adding that the hotel did not fire any employees but rather they left for other jobs while business was slow and hours were down. “What we need to do is make sure the guest experience remains the same.”
As business continues to increase, Ahmed said he hopes he can get fully staffed to ensure his employees do not get burned out.
“As a Marriott franchise,” he said, “we take pride in taking care of our associates.”