2020 has been a tough year for the hotel industry, to say the least. The coronavirus pandemic has had a profound impact on travel, and as such, hotels across the country have been grappling with widespread layoffs and astounding vacancy rates. In fact, 2020 is projected to be the worst year on record in terms of hotel occupancy, with eight out of every 10 hotel rooms being empty, according to the American Hotel & Lodging Association.
All of this is bad news for hotel operators and real estate investors alike. But one major metro area is seeing a much-needed surge in hotel demand due to a very big event that's coming up.
Washington, D.C., hotel bookings are booming
Like much of the country, Washington, D.C., has seen a decline in tourism -- a 53% drop, to be precise. The result? Destination D.C., the official marketing organization for the district, has suffered $442 million in losses from the events it books alone. But the upcoming presidential inauguration could provide some temporary relief for D.C.-area hotels.
In fact, a number of major Washington, D.C., hotels have already reached capacity for the big event, which is slated for January 20. Meanwhile, many local hotels that still have rooms available are capitalizing on this trend by raising their rates and enforcing minimum stays in the hopes of eking out added revenue while they can.
And it's not just hotels in Washington, D.C., itself that are seeing an uptick in demand in conjunction with the presidential inauguration. Even hotels in nearby Alexandria, Virginia, are getting booked up.
Will a temporary boom save D.C. hotels?
Given that we're still in the midst of a pandemic -- one that's unlikely to be over with by the time the presidential inauguration happens -- it's encouraging to see people booking hotel stays for the big event. But while a modest influx in revenue will no doubt be helpful to D.C. hotels, it won't be enough to compensate for the abysmal year most of these establishments have undoubtedly had.
While it's true that some travelers to the presidential inauguration may seek to extend their stays in the area and take in the sights of the city while they can, for some, those visits will be short-lived. After all, the start of a new year means the start of a new paid-time-off cycle at work, and given the uncertainty surrounding the pandemic, people may be hesitant to exhaust too much vacation time early in the year.
Let's also remember that the weather can be harsh in Washington, D.C., during the month of January, and so the idea of spending a week in town following the inauguration may not appeal to many visitors. As such, the uptick in revenue D.C. hotels see may be very, very limited and temporary.
Of course, once the pandemic wraps up, D.C. hotels will likely start to see a lot more foot traffic. The question is: Can they hold out that long? With 25% of U.S. hotels at risk of foreclosure, it may take a lot more than one massive turnout to keep D.C. establishments afloat.