DES MOINES, Iowa — An April jobs report from the Bureau of Labor and Statistics shows 7.7 million people lost their jobs from the hospitality industry. Last week Catch Des Moines launched a new initiative to try an help local struggling hotels.
The program called “Buy Now, Visit Later” allows customers to buy a $100 bond for participating hotels. Then, in 60 days the bond’s value increases to $150. Greg Edwards, president and CEO of Catch Des Moines says they are hoping this will create revenue for the struggling hotel industry.
“Really the purpose was to try to stimulate more dollars into the hotel industry. Right now it’s one of the worst suffering industries out there in the whole travel industry aspect. Hotels in the metro area currently are running about a 20 percent occupancy rate. Generally this time of year will be running between 60 to 65 percent. So they’re taking a huge hit, they’ve had to laid off thousands of employees,” said Edwards.
Kalpesh Patel is the owner/operator for VKB Management, which owns Fairfield Inn and Suites in downtown Des Moines. Opening just last September, Patel says that business at that specific location was booming, hosting a higher than average occupancy rate of 80 percent. Now with no concerts, conferences, or sporting events, revenue has significantly dropped.
“The demand is gone, we don’t have events we don’t have groups coming in a business travel is gone so we’ve been running, you know six, seven, eight percent occupancy now for about six weeks. But we don’t really see that changing anytime soon,” said Patel.
Since COVID-19 slowed business, Patel says he has only been able to keep core staff members on payroll. With bills continuing to come in and low occupancy rates becoming consistent, Patel says that although the hotel is open, it loses money every day. He’s hoping the bond program will help bring some revenue into to the location.
“And so we’re encouraging people to, you know, plan ahead, think about a staycation maybe have an anniversary coming up. There’s a number of different hotels that are all taking this and it’s a great opportunity to do to help a local small business like ours, and also kind of give yourself a benefit for future use,” said Patel.
Edwards says national trends show that people are wanting to travel again and probably will later this summer. He predicts the majority will be leisure travel. Unfortunately, Edwards says as business travel continue to be at a lull, the hospitality industry won’t being to recover until next February.
“The only good news we’ve kind of heard is high schools are planning sporting events, but they’re not guaranteed but they’re starting to plan for them so we’re hopeful that some of those things will continue to happen here in the fall, but it’s going to be into next year before we get back to significant improvements,” said Patel.
For a link to the “Buy Now, Visit Later” program click here.