COVID-19 brought the hospitality industry to a near standstill, but Durham hotels are positioned well for recovery post-pandemic
By Hannah McClellan | Photography by John Michael Simpson
Ron Wood and Stephanie Wood bought the Arrowhead Inn Bed and Breakfast in March 2019. They never expected a pandemic would interrupt their dream just one year later.
The husband and wife nearly made their revenue goal during that first year. Then COVID-19 brought the hospitality industry across the country to a near standstill.
“Two, three weeks after that is when the pandemic hit, and the wheels came off,” Ron Wood said. “Just like everybody else, we had a significant number of cancellations and more money going out than coming in.”
The Woods ultimately decided to close the inn completely for three weeks. They opened up two rooms – a cottage and a log cabin – out of its nine total in early summer 2020. “That was our lifeline,” Ron Wood said, until they gradually reopened rooms in the main house. They began taking reservations for all the rooms last September.
Nearly 15 months after they shuttered the inn at the onset of the pandemic, Ron Wood said business is the best it’s been since they became owners – they came out ahead of their pre-pandemic numbers for the past three quarters.
“We attribute a lot of that to the fact that we’re a small inn,” he said. “People feel safer, they can easily keep themselves distanced.”
Business among larger and chain hotels in Durham painted a less idealistic picture. Managers and local leaders said the hotel industry has a ways to go to reach pre-pandemic revenue, though business has increased some since 2020. Durham’s hotel occupancy this June was about 57%, up from a rate of nearly 43% last June, according to data from Discover Durham. In June 2019, however, Durham’s occupancy rate was nearly 75%. Average room rates are also important for hotels to fully recover. The average daily rate increased to $90.04 in June 2021, compared to $72.08 in June 2020.
The lagging business is due largely to lingering hesitancy to travel combined with a lack of conferences and events, which typically bring many out-of-town guests to hotels, but industry experts said another problem is also to blame: staffing shortages that are impacting the hospitality sector.
“We’re having challenges in hotels around the state where they’re literally turning away guests – there’s demand to sell rooms, and they’re literally telling guests that they can’t come because they don’t have the staff to service them,” said Chris Mackey, North Carolina Restaurant & Lodging Association’s chief strategy and communications officer.
Mackey said her colleagues across various trade sectors have also seen staff shortages, which affects the supply chains for hospitality businesses.
“So it’s really impacting us, both directly and indirectly,” she said. “And we’re just not sure when the situation is going to get better.”
A survey developed by Discover Durham in partnership with Durham Technical Community College, North Carolina Central University and the Office of Economic and Workforce Development collected data from 70-plus respondents on the state of the hospitality workforce in Durham County. The survey showed that 79% consider staff recruitment to be very/extremely urgent, with 84% of respondents currently hiring. Sixty-four percent of employers consider the workforce shortage an extreme threat to their business viability.
The resumption of in-person events and normal travel habits naturally are the biggest drivers that impact the number of people staying in hotels.
Randy Kolls, area general manager and partner for three Duke University–owned hospitality properties, said they’ve seen “significant growth in reservations for our restaurants and hotels” since last spring and are anticipating more as fall approaches. The three properties – Washington Duke Inn & Golf Club, JB Duke Hotel and The Lodge at Duke Medical Center – are all located near Duke’s campus and its hospitals.
“There are many upcoming seasonal events and milestones on the horizon that our team is looking forward to, including orientation/move-in and Duke Family Weekend,” Kolls said. “Everyone is incredibly excited about the Duke Football season and the start of Coach K’s historic final basketball season.”
The return of university students certainly provides a boost, as does the renewed promise of entertainment. Durham Performing Arts Center recently returned to hosting live concerts in August. The Carolina Theatre welcomed its first guests back to the movies at the end of July and is slated to resume live events in early September, as is Duke Performances – just a few reopenings that Discover Durham President and CEO Susan Amey said are expected to draw thousands of visitors to the area.
Amey said she and her team are also keeping an eye on rising coronavirus cases across the state and nation, and how that’s impacting the hospitality industry.
More than 53% of American travelers are less interested in visiting other places right now due to the delta variant of the coronavirus, according to the latest American Travel Trends & Sentiment report from Destination Analysts. Nearly 19% have canceled a trip specifically due to the delta variant.
“We’re cautiously watching the trajectory of the delta variant and encourage residents and visitors to get vaccinated when and how we can,” Amey said.
Though Durham’s occupancy rates are still increasing, Amey said Discover Durham will look at the data closely to determine if delta impacts local business.
“We’ve been on this upward trajectory, since we were starting from such a low level over the winter,” she said. “So that’s a really positive piece. But if you look at the last month for July, it was almost flat to June, so now we’ll be watching. We haven’t seen any effects of people’s nervousness about the delta variant yet, but that’s the next thing for us to watch for.”
The Durham hospitality industry is still positioned well for recovery, Amey said, as Durham’s emphasis on COVID-19 safety is consistent with what many travelers are looking for and trends well for people planning to visit friends and relatives – a motivation for travel expected to bounce back sooner than others.
As for the owners of Arrowhead Inn, Ron Wood is trying to support as many local businesses as possible, particularly as the inn continues to meet or exceed occupancy targets.
The inn closed yet again for a few days in early August for the first time since summer 2020, but not as a response to COVID-19. The property simply needed maintenance work done, and there hadn’t been any gaps in reservations to complete it. Now, Ron Wood is preparing for the possibility that business trends could change as coronavirus cases trend upward.
“We’re entering back into a certain degree of uncertainty,” he said. “But, you know, in the time that you and I have been talking, I glanced and I saw three more bookings come in for September – so that’s encouraging.”