Hotel owners are bracing for a difficult 2021, as the sector continues to reel from a historic drop in bookings caused by the Covid-19 pandemic.
Even though the industry’s worst year in living memory ended with a glimmer of hope, many in the industry expect the celebrations to be short lived.
The start of Covid vaccinations in the U.S. and Europe raised the prospect that people would start traveling again and sent shares in hotel owners and operators soaring. But investors and analysts say bookings will take years to rise back to pre-pandemic levels. Meanwhile, the industry faces growing financial stress as property owners struggle to pay their mortgage bills, wages and other expenses.
Despite the record drop in bookings, many hotels have been able to stay open thanks to debt relief from banks and temporary government aid like the Paycheck Protection Program. Now some lenders are starting to lose patience, brokers and investors say, which could lead to an increase in foreclosures and distressed-property sales in the first half of 2021.