With a new June date for the auto show and a massive international conference planned for July with more than 50,000 anticipated visitors, summer 2020 was supposed to be a record-setting season for hotels in Detroit and across the metro region.
Then COVID-19 hit, and some hotels did find themselves setting records — for slow business and empty rooms.
The pandemic and related cancellations of sporting events, festivals, large private gatherings and a lot of business and leisure travel have been a massive disruption for metro Detroit's hotel industry, especially for high-end hotels in downtown Detroit.
Prior to coronavirus, the city was experiencing a construction mini-boom of new "boutique" hotels aimed at upscale guests.
While no prominent hotels in the region have permanently shut their doors, many properties temporarily closed during the height of the pandemic and laid off or furloughed hundreds of employees as their occupancy rates stayed low through the spring and summer.
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The big question that no one can yet answer is when Detroit's hotel business will regain its pre-pandemic momentum.
Larry Alexander, president and CEO of the Detroit Metro Convention & Visitors Bureau, said suburban hotels and budget hotels have generally fared better during the pandemic than upscale downtown hotels, which are operating at a roughly 20% occupancy rate.
“We have a number of higher-end luxury hotels in downtown, and that’s the category that’s doing the worst," he said.
Overall, the hotel occupancy rate in the metro region of Wayne, Oakland and Macomb counties was just under 55% near the end of August, down from the "high 60s" a year ago, Alexander said.
"What we see is that the budget hotels and the economy hotels in the tricounty area are the ones that are doing very well," he said. "The budget hotels are running 70% occupancy, the economy hotels are running 61% occupancy, and if you just look at downtown, downtown is running about 20%.”
One category that also appears to be doing well is extended-stay hotels.
At the Extended Stay America on Stephenson Highway in Madison Heights, business has been up year-over-year since COVID-19 arrived in mid-March.
General Manager Ashley Schaefer said the hotel housed a lot of health care workers in early spring while some nearby regular-stay hotels appeared to have few guests.
Since then, the hotel's occupancy has stayed slightly above its typical 80% to 85%, she said. The walk-up rate is generally between $85 and $94 per night.
"We run a little different," Schaefer said. “People actually live here. We have full kitchens — some hotels don’t have that."
The Free Press visited 14 hotels across metro Detroit for this story, and no other hotel managers and owners were willing to speak publicly about how this summer compares with pre-pandemic times.
Some of those hotel properties reported mass layoffs in the wake of the pandemic, such as The Townsend Hotel in Birmingham and the Marriott on Big Beaver Road in Troy.
Managers at several high-end downtown Detroit hotels, including the Westin Book Cadillac, Aloft Detroit, the Shinola Hotel and the Marriott in the Renaissance Center declined to comment or didn't respond to messages left in person or by phone.
Summer plans ruined
Metro Detroit's hotel industry has been adding rooms in recent years and was looking forward to a hot summer.
The North American International Auto Show was scheduled to happen in June for the first time since permanently moving its calendar date from January. The show typically fills thousands of rooms across the region with auto industry executives, engineers, journalists and visitors.
Next up in early July was the International Convention of Alcoholics Anonymous. That event, which takes place every five years, was to happen downtown and draw an estimated 50,000 to 60,000 people, who would spend nights at 113 hotels across the tricounty area.
The convention bureau's Alexander said Detroit applied three times to host the AA convention.
“It was all planned, outlined — we were ready," he said. "We had the contracts all done, including with transportation companies to take people from Ford Field to hotels and TCF Center."
But both events ultimately were canceled due to COVID-19.
The AA convention chose Detroit in 2008 to be this year's host. If Detroit applies again, the next opening is for 2035, Alexander said.
“It was gigantic, and who knew that COVID was going to come and cancel it," Alexander said. "When I think about the millions of dollars that were lost as a result of not only AA but other groups, it’s enormous."
There is no official estimate for hotel workers in metro Detroit who remain furloughed or were permanently laid off during the pandemic. The Michigan Restaurant & Lodging Association noted that 4 out of 10 hotel workers nationwide are believed to be out of work.
Hope for future
There are still 10 new hotel projects underway in the tricounty area with anticipated completion dates ranging from late this year to 2022.
"As far as we know, all 10 of those hotels are still planning to complete their construction and open," Alexander said.
One project is the planned conversion of a former 13-story residential hotel in downtown Detroit that recently housed lower-income tenants into an upscale 172-room Hilton hotel.
That hotel, to be branded "Tapestry Collection by Hilton," would open in late 2021 or early 2022, when Hilton and the project's local development team hope the pandemic will be over and Detroit's hotel market will be booming again.
Alexander said he also believes that the hospitality business will bounce back.
“We had so much going for us" before COVID-19, he said. "I’m confident that we’re going to get back to that — it may take several quarters.”
Contact JC Reindl at 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.
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