Coronavirus is gutting Kansas City’s hotel and convention industry
The coronavirus pandemic continues to exact its damaging toll on Kansas City’s convention and hotel business, responsible now for 45 canceled conventions and meetings.
The cancellations represent 108,906 lost room nights in Kansas City area hotels, according to Visit KC, the convention and visitors bureau for the region. Those lost room nights from cancellations would equal nearly 30% of the 364,764 room nights booked in 2019 for meetings in Kansas City, according to Visit KC’s 2019 annual report.
The estimated economic impact is $90.3 million.
A silver lining for the local convention business: 30 groups have or are trying to reschedule their events in Kansas City. That includes Planet Comicon, which rescheduled its event originally planned for March to August.
One of Kansas City’s biggest planned conventions in 2020, the annual gathering of the Shriners International, is still on — at least for now — for July 5-9. The Shriners had anticipated 20,000 visitors for their convention in Kansas City.
A statement from the Shriners said it continues to monitor the situation and will take local, state and federal guidelines into account.
The Shriners’ gathering may depend on when the Loews Kansas City convention hotel opens. The 800-room hotel, the first convention hotel to open in Kansas City since 1985, was supposed to open on April 2. That’s been postponed indefinitely.
Experts predict that the coronavirus crisis will have long-lasting effects in the hospitality business, locally and globally.
“Simply put, the convention market was overbuilt in the United States prior to this, and in many ways convention attendance has not fully returned to pre-recession levels through 2018,” said Heywood Sanders, a professor who researches the hotel and convention industry at the University of Texas-San Antonio. “The implication of that is if 2008 had the kind of impact that it has taken a decade or more to redeem, what does this mean if it has a more serious impact than 2008?”
In Kansas City, occupancy rates for hotels have plummeted.
Last week, occupancy rates for metro-wide hotels was 19.1%, according to Smith Travel Research. That compares to 68.5% for the same period a year ago.
The effects have been more stark in downtown hotels, where occupancy rates last week fell to a stunning 7.9%, down from 71.2% for the same period a year ago.
Some Kansas City hotels have shut down as the pandemic continues toward a surge in the coming weeks in Kansas and Missouri. The Crossroads Hotel notified the Missouri Office of Workforce Development that it was laying off 151 workers in March due to the coronavirus outbreak.
“We are hopeful that this is temporary,” the Crossroads Hotel’s owner Aparium Hotel Group wrote in its notification, “although the date when the hotel may resume operations is unknown.”
The Adams Mark Hotel & Conference Center near the Truman Sports Complex also closed down indefinitely last month, laying off 138 employees. Adams Mark said it hoped the country would recover quickly from the coronavirus crisis, and if it did, “we may re-open the Adams Mark Hotel.”
The Sheraton Hotel at Crown Center will temporarily close, the hotel posted on Facebook last week.
The post did not provide details on the reason for the closing but said the hotel would reopen “as soon as possible.”
The pandemic way well affect financiers of hotel projects and renovations. There is currently about $300 million outstanding balance in commercial mortgage-backed securities loans behind several Kansas City hotels, according to data from securities analytics firm Trepp.
“One small glimmer of hope is that public health agencies are considering turning to hotels to serve as ‘hospital support centers’ that would provide additional beds for COVID patients,” Trepp said in a research note. “But overall, hotel utilization continues to crater.”
