Social distancing guts Berkshire hospitality industry
The county's hospitality industry is taking a severe hit from the coronavirus pandemic, with a sharp decline in reservations and hundreds of layoffs, with many more anticipated.
"The impact is enormous, it's unprecedented, there's no playbook for this," said Sarah Eustis, CEO of Main Street Hospitality, partly owned by the Fitzpatrick family, which operates the iconic Red Lion Inn in Stockbridge, Hotel on North in Pittsfield and The Porches Inn in North Adams, and owns the Briarcliff Motel in Great Barrington. "We're assuming zero revenue for the next month. We remain optimistic that by summer, we'll be able to recapture some of the lost revenue."
The company had to lay off most of its 200 employees this week, since each property is being run with a skeleton crew of three to five people, Eustis said.
Statewide hotel industry job losses could top 84,000, including several thousand in the Berkshires, according to the American Hotel & Lodging Association. The total, 40 percent of hotel-related job in Massachusetts, includes companies supported by hotels such as food and linen suppliers, farms and other purveyors.
"Everyone is anticipating that it's temporary," Eustis said, so the company's human resources department is helping the staff navigate paperwork for unemployment claims while maintaining health benefits. Main Street Hospitality continues to operate with its 15-member central administrative staff. But the senior leadership is taking pay cuts.
"We're trying to be very prudent and hold ourselves accountable first at the leadership level so we can sustain our employees as best we can," she said. "It's remarkable to see people step up, the resiliency."
"I'm pleasantly surprised by fewer cancellations from July forward," she pointed out. "We're being very flexible on cancellation policies."
"We can use all the help we can get," Eustis added, noting that gift card purchases are being marketed at "a very friendly rate" for future bookings.
At the Red Lion, all 125 rooms are open, and the few guests are spaced out throughout the hotel.
"We want to work carefully within what is safe and reasonable, and we believe we're taking all the necessary precautions to make sure people are safe," Eustis said.
Hotel on North in Pittsfield has closed its food and beverage operations, but its 45 rooms remain available with a few guests currently booked. However, Eustis said, there have been many cancellations, including group bookings for the short term.
Occupancy is below 10 percent at the Stockbridge and Pittsfield hotels, while the 17-room Briarcliff Motel is hosting a stable number of visitors.
The 47-room Porches Inn is closed temporarily in the wake of shutdowns by key North Berkshire attractions.
The loss of dining and beverage service at the Red Lion is a severe setback, since it represents half of the hotel's revenue, Eustis noted. But while the company's new Tap House at Shaker Mill in West Stockbridge is closed, the culinary team is offering pub-style takeout and delivery service for that town and Richmond.
Gateways Inn, a 12-room boutique bed-and-breakfast, restaurant and night spot in downtown Lenox, is shutting down temporarily as occupancy has flatlined and bookings for the summer have vanished.
"This is such a ridiculously crazy situation; it's really sad," said owner Eiran Gazit, who had just fired his 15 salaried and hourly employees. "The impact is huge and we still have to pay bills, with no income at all. Everything until the end of April is canceled," including scheduled meetings, business retreats, parties and a wedding.
He has had to refund advance deposits for future bookings, leading to a negative cash flow. "It's catastrophic, there's no other word for it, and I really don't know what to do," said Gazit, who estimated he has about $115,000 in operating debts. "Nobody's making reservations right now for the summer. We're all on life support."
He's hoping for a financial aid lifeline from the town of Lenox to help inns, restaurants and retail with low-interest loans.
Meanwhile, Hyatt Hotels announced Thursday that is delaying the scheduled opening of Miraval Berkshires, the high-end destination resort on the Cranwell site, from May 15 to early June.
"To ensure the safety and well-being of our Miraval Berkshires colleagues and community, we have made the difficult decision," the company stated. "We will be working with authorities to ensure that we proceed with an abundance of caution."
At the Toole Cos., owners of the Courtyard by Marriott, Yankee Inn and Hampton Inn, all in Lenox, CEO Colin Toole told The Eagle staffing needs are under review based on lower occupancies anticipated.
"We are making every effort to mitigate the full impact upon employees, but layoffs are inevitable," he said. "It is our opinion that the doomsday scenarios in terms of duration will not come to pass and that business will largely be restored by summer. Locally, If there is anything to be thankful for it is that a massive loss of business is occurring at a time of year when revenues are lowest."
On the other hand, he cautioned, "unfortunately many small businesses will fail over the next month or so."
Canyon Ranch Lenox closed temporarily on Tuesday with an undisclosed impact on staffing. "The resort will reopen on April 5, unless further extensions are determined necessary," said Managing Director Mindi Morin.
"While we cannot comment on the economic impact this evolving pandemic will have, now more than ever, we are fully focused on the well-being of our guests and team members," she said. "Our operations are temporarily paused in support of the world's, and our nation's efforts to contain the virus. It is our intention to resume business as soon as conditions allow."
Clarence Fanto can be reached at email@example.com, on Twitter @BE_cfanto or at 413-637-2551.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.