'Tsunami' of hotel closures is coming, experts warn

By Hugo Martín, Los Angeles Times on

Published in Business News

Hotels that primarily cater to conventions and business travelers are more at risk of closing because such travel has all but disappeared, according to industry experts. Meanwhile, hotels located in popular car-accessible vacation destinations, such as Santa Monica, Santa Barbara and San Diego, seem more likely to survive the crisis thanks to a slow increase in leisure travel.

"All the drive-through markets are starting to get business back," said Alan X. Reay, president of Atlas Hospitality Group. "A number of owners are starting to see light at the end of the tunnel."

New York has over the last few years experienced a surge in new hotel construction to serve a boom in international visitors and many of the hotels that close due to the pandemic will likely convert to residential properties or offices because of the glut of hotels, Reay said. In Southern California, it is unclear what will become of shuttered hotels.

Wise said some could reopen as student housing for nearby colleges, senior citizen housing facilities or condominiums, but for that to happen, local policymakers would have to be lenient in adopting new zoning rules. He predicted that large hotels near convention centers that go out of business would not have the option to convert to anything else.

"There is no playbook for a pandemic," he added.

Former hotel worker Oscar Melara, 60, had been working at the Luxe Rodeo Drive location for 39 years, starting before the Harkham family took over the property. He began his career as a dishwasher and worked his way up to cook.


The hotel had been closed since March when the pandemic struck, but Melara and his co-workers held out hope that it, like several other hotels in the L.A. area, would eventually reopen and rehire them.

Over the years his co-workers had become his second family, he said, and the $22 an hour he earned was enough to pay his bills and send money to his sister in El Salvador to help her make ends meet.

Then the letter from Harkham arrived, saying it was over.

"When you work most of your life for a place and it closes, it's not fair," Melara said.

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