Hartford Business Journal

22 Hartford Business Journal • November 30, 2020 • www.HartfordBusiness.com fer extra indoor and outdoor space and amenities, such as the Delamar West Hartford and various Fairfield County properties, and as a result it hasn't seen its revenues and occu- pancies fall as steeply as its peers, Mallory said. "If you're a hotel that has a din- ing component and in particular an outdoor dining component, you might have done better than you expected this year, although no one has really come close to where they were in 2019," he said. "The bar is so low, it's just a question of how far above that bar you are." The occasional booking windfall won't be enough to save the broader hospitality industry, which is lobby- ing hard in Washington, D.C., for a major stimulus package, and warns if it doesn't come the result will be catastrophic. A survey released this month by the American Hotel & Lodging As- sociation (AHLA) found that 71% of hotels would not last another six months with- out additional stimulus. AHLA has also projected that Connecti- cut, which has already lost nearly 10,000 of its 26,000 hotel jobs as of September, would see those losses climb to more than 18,000 job losses if aid does not arrive. The state could also see two-thirds of its 367 hotels close, many of them through foreclosure, the association projected. Now more than eight months into the pandemic, many hotels have stayed afloat through a combina- tion of federal CARES Act stimulus money and flexible lenders, accord- ing to Gary Avigne, a senior advisor with Boston-based Pinnacle Advi- sory Group. Avigne has been helping banks and other lenders negotiate loan re- structuring packages, or workouts, with hotel borrowers. "Lenders are trying to be cooperative and even collaborative," Avigne said. However, barring significant improve- ments, such as ad- ditional federal aid or quicker-than-expected rollout of COVID-19 vaccinations, there could be more pain starting in March or April 2021, when the pandemic marks its one-year anniversary, Avigne said. "At the end of the day, banks have to make money too, so they may only be able to go so far with what they can do," he said. Foreclosure not an ideal option Avigne said many lenders would prefer not to foreclose on hotels, es- pecially during a period when they may not be able to sell the proper- ties for much, if at all. Hotel auctions have been rising in number across the country, accord- ing to Ten-X, the largest virtual auctioneer of commercial property in the U.S. "We're seeing a significant amount of retail assets and hospi- tality assets on the platform and I think that's not surprising because those classes have been probably most significantly impacted by CO- VID," said Kevin Spellacy, executive director of sales at Ten-X. A recent indication of soft hotel demand was seen locally via the failed auction sale of the 22-story Hartford Hilton. It was unable to garner a buyer in an online auction earlier this month, even with a relatively low starting bid price of $5.5 million. The owner, Waterford Hotel Group, said it's still talking to interested parties about a deal, but Mallory said the situation could be telling about the kinds of hotels the market will want in the coming years. "No one felt it was worth taking a punt on at even a nominal price," said Mallory, whose group competes for downtown business with the Hilton. "Maybe the hotel is obsolete, maybe the work that needed to be done to make it more viable in to- day's market is a large number." Michael Freimuth, executive di- rector of the Capital Region Devel- opment Authority, which manages the Hartford Marriott Downtown, said the Hilton sale has lots of mov- ing pieces, including a tax agree- ment that must be negotiated with the city, not to mention uncertainty over the future of the nearby XL Center. "I'm speculating, but I'm guessing it's a lot more complex than a hotel off the highway," Freimuth said of the Hilton. Meanwhile, the Sheraton Hartford South hotel in Rocky Hill heads to auction on Ten-X in December. >> The Real Deal continued Gary Avinge Hartford County hotel occupancy rates Date 2020 Occupancy 2019 Occupancy March 37% 59.2% April 21.5% 61.6% May 29% 66.1% June 32.1% 71.5% July 37.5% 69.6% Aug. 49% 66.3% Sept. 39.5% 66.5% Oct. 41.3% 71.30% Source: STR THE REAL DEAL Webster Bank, N.A. Member FDIC Webster Bank, the Webster Bank logo and the W symbol are trademarks of Webster Financial Corporation and Registered in the U.S. Patent and Trademark Office. © 2020 Webster Financial Corporation. All Rights Reserved. Webster Bank, the Webster Bank logo and the W symbol are trademarks of Webster Financial Corporation and Registered in the U.S. Patent and Trademark Office. Webster Bank, N.A. Member FDIC. © 2020 Webster Financial Corporation. All Rights Reserved. Webster Bank, the Webster Bank logo and 2020 EHL Lockup Layout Options LEFT ALIGNMENT CENTERED RIGHT ALIGNMENT Home Loan Lockup Layout Options Home Loan Lockup Layout Options J E N & J O E A N D R U Z Z I Founders Joe Andruzzi Foundation North Attleborough, MA It was the Joe Andruzzi Foundation's time to help remove cancer patients' financial barriers. What time is it for you? The Hartford Hilton hotel failed to sell via auction in November. PHOTO | COSTAR

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