Greater Grand Forks hotels feeling the crunch
Times were tough even before the pandemic -- now some may not return to business as usual.
The hospitality industry in the region was suffering even before the coronavirus erupted across the globe, and the virus has tightened the squeeze on area hotels to the point where some may not return.
Joe Cozart, general manager at the Ramada Inn, says a variety of factors are behind the five-year decline. Exchange rates for the Canadian dollar, falling oil prices in 2015, a lack of attractions and the hotel market being overbuilt in general, have contributed. This is a far cry from almost a decade ago that saw a hotel building boom. In a few years span around 2013, Grand Forks added five hotels. Today, there are more than 30 hotels in Grand Forks, with a combined 2,423 rooms.
“Everybody's just hoping to get back to where we were before the pandemic, and that's not in a really good place,” Cozart said. “Every owner in town is struggling, one way or the other.”
According to Julie Rygg, executive director at the Greater Grand Forks Convention and Visitors Bureau, occupancy rates for 2018 were at 53.9%. That number went up to 57% in 2019. The numbers for 2020, at least in the short term, aren’t much better. In January, occupancy rates were at 48.1% and at 53% in February. The two months are generally considered to be slow for hotels. Then came the pandemic, and the rate fell to 34.9% in March. Some hotels told the Herald their April numbers were in the low single to double digits.
Cozart said his hotel is operating at about 10% occupancy of its 100 rooms. Before the pandemic, it was 50%. A front desk staff member at the Canad Inns Destination Center said the hotel is at 4% occupancy. That hotel was at 30% to 50% on weekdays before the pandemic set in, though the weekends saw 100%.
Low occupancy numbers mean a reduction in staff. The Sleep Inn and Suites laid off more than half its staff, and the Country Inn and Suites did the same with most of its housekeeping staff.
Some hotels, such as the Rodeway Inn near Columbia Mall and America’s Best Value Inn on North 42nd Street, are completely closed, though on a temporary basis. Ashok “Smiley” Thakker, who owns both hotels and three others in town, including the Ramada Inn, said they would reopen.
“It will open soon; it won't be closed forever,” said Thakker, about America’s Best Value Inn.
Thakkar said the Rodeway Inn should be open in about 10 days.
One hotel, the Travelodge on South Washington Street closed two weeks ago. The closure appears permanent. A sign on the door said it was closed temporarily due to COVID-19, but the hotel’s problems apparently stemmed beyond that. Ownership for the hotel has changed three times since 2009, according to Grand Forks County property records. Cozart called the closure an “anomaly.”
“Most other hotels, you wouldn’t hear they are closing, you would hear they’re selling,” he said. “Having said that, we don’t know what (the pandemic) has done to people, we are not going to see that until, as they say, it shakes out at the end.”
Not all hotels are reporting such dismal numbers, though more guests don’t necessarily mean more money, if the rates are down. La Quinta Inn and Suites reported it is at about half capacity, with its numbers bolstered by railroad workers. The Baymont by Wyndham also reported it was at about 50%.
Franchise fees and third-party booking fees for websites, such as Expedia, also eat into the bottom line. If the hotel rents the room, it still needs to be cleaned, which costs another $10 or $15 dollars.
“I mean they're just basically swapping cash for labor,” said Cozart at the Ramada Inn.
Lodging taxes collected by the city are also down from the build-boom years. In 2018, the city collected $968,555. In 2019, it saw $965,708. In 2012, that number stood at $1.072 million.
The loss of anchor stores like Macy’s, which closed in 2017, then Sears in 2018, make Columbia Mall less of an attraction to Canadian shoppers -- when the border was open. Now they can’t visit until the pandemic passes. Cozart said Canadian shoppers had been visiting Fargo, instead.
“We don't see the trend changing unless we have something to change it, meaning the mall becomes more vibrant, and then attractions in Grand Forks,” Cozart said.
The recent postponement of large-draw events at the Alerus Center, concerts such as Alice Cooper and Brantley Gilbert, and events like Hugo's Monster Truck Tour, only further the recovery. Still, Cozart and Thakker are looking towards June, when events, including wedding receptions, are booked at the Ramada Inn.
“That’s what I’m hoping for,” Thakker said. “I think we will have a clearer picture by the end of May.”
Roundup of some area hotels
Ramada Inn: 10% occupancy now, 50% before pandemic
Canad Inns Destination Center: 4% occupancy now; 30% to 50% before the pandemic and 100% on the weekends
La Quinta Inn and Suites: About 50% occupancy now
Baymont by Wyndham: About 50% occupancy now
Country Inn & Suites by Radisson: Almost fully booked for March and April, but the majority canceled when the pandemic hit. Many cancellations for May as well.
Sleep Inn & Suites: 23% occupancy in April, averaged 65% before the pandemic
Expressway Suites: Occupancy down 40% from before the pandemic
Staybridge Suites: About 70% occupancy now due to long term stays. 90% before the pandemic
East Grand Inn: 35% to 40% occupancy, due to long-term stays; 50% before the pandemic
Fairfield Inn & Suites, East Grand Forks: Two to three rooms rented out of 67 rooms
Hotels missing from the list declined to provide specific data, or did not respond.