Dear Friends and Media,
The Hilton Garden Inn El Paso Airport Hotel closed its doors one month ago. That was followed a week or two ago by the Holiday Inn Express Airport.
Vic Kolenc of the El Paso Times reported two days ago that the two downtown hotels owned by Jim Scherr, the Courtyard by Marriott Hotel and the Double Tree by Hilton, closed April 9. The Quality Suites University Hotel and the Sleep Inn University Hotel, both on Sunland Park Drive, have closed as well.
Kolenc interviewed Marco Ortega of the El Paso Hotel and Lodging Association, who affirmed that “about 60% to 70% of the estimated 12,000 workers in El Paso’s hotel industry have been temporarily laid off due to coronavirus-related cutbacks.”
In his presentation to City Council this past Monday, City CFO Robert Cortinas indicated that hotel occupancy at the end of March stood at 33.3%, down from 76.9% at the same time last year. I suspect the figure is already down to 20-25%.
The hotels in downtown El Paso have suffered the most of all. One downtown hotel owner, who shall go unnamed, tells me occupancy in his hotel stands at only 5%. Another tells me that his occupancy is currently at 4%, with nearly all employees laid off.
THE BALLPARK WILL NEED $1M+ IN GENERAL FUNDS
The precipitous drop in hotel occupancy means, of course, that the City will collect far less Hotel Occupancy Tax this fiscal year, which means that the City will have to kick in at least $1,000,000 in general fund subsidies for the Ballpark.
CONVENTION CENTER VS. ARENA
The bigger picture here is that there is a hotel bubble, especially in our downtown, and this was catalyzed by the City of El Paso through its many 380 agreements with developers. The market is oversaturated, which is why this pandemic has hit that sector so hard.
We recently read in the Oligarchy Gazette that “Proponents of the arena say it’s a necessary part of the plan to continue revitalizing and strengthening Downtown.” There are, however, many who feel that a world-class convention center next to a renovated Abraham Chavez Theater could be far more powerful drivers of downtown hotel occupancy than a G-League basketball franchise.
As the City faces the most challenging strategic and budgetary issues it has ever had to face, the question of the “Arena” has never loomed larger. It is time to terminate that $500M+ boondoggle, which we did not vote for and cannot afford, in favor of a strategy that will benefit the hotel industry and tourism and that we can actually afford.
Have a great evening,
Max