There will be plenty of room at the inn this Christmas.

Colorado Springs hotels are preparing for a dismal holiday and winter season as COVID-19 cases surge nationwide, throughout the state and across the Pikes Peak region.

Reservations and meeting bookings for December have nearly disappeared after El Paso County moved to higher COVID restrictions on Nov. 27, barring hotels from hosting meetings and shutting down indoor dining at restaurants. Hotel general managers say they are worried about another wave of cancellations for spring if the restrictions, designed to slow the spread of the COVID-19 pandemic, remain in place in late December.

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A flag is unfurled on the last beam before it is hoisted into place for the Hyatt Place hotel on Thursday, Dec. 3, 2020. The plan is for the hotel to open early next fall, after the COVID-19 vaccine has gained traction. (Photo by Jerilee Bennett, The Gazette)

After closing for several months after the pandemic hit Colorado, local hotels were among the best performing in the nation this summer with occupancy rates well above most of the rest of the Front Range and many other tourist destinations across the nation. But as COVID cases surged in El Paso County and statewide, the state tightened restrictions on many businesses to avoid exceeding hospital capacity.

Industry and state officials have been in talks for weeks over ways to limit the damage, though the governor's office denied a request from the Colorado Hotel and Lodging Association to allow hotel restaurants and guests to serve guests indoor at 25% capacity. The group also has asked the state to increase capacity for meetings from 30% to 50% of fire code capacity. That request is pending.

Meanwhile, hotels are struggling. As of Sept. 11, a survey of 53 hotels by the hotel and lodging group found more than $1 billion in revenue from this year and future years has been lost from cancellations and more than 7,000 employees lost their jobs temporarily or permanently. More than 60% of the surveyed hotels said they would be forced to temporarily close if indoor event guidelines aren't loosened.

"Group meetings take months to plan, and the problem hotels are having is that groups are canceling meetings because they don't see a way to have their meeting under the current capacity restrictions," said Amie Mayhew, the hotel and lodging group's CEO. "We are hoping the state will give permission to have enough capacity to host meetings. We are asking for a path to capacities that will allow these meetings to happen."

Chip Rogers, president and CEO of the American Hotel & Lodging Association, part of a coalition of 300 groups seeking another relief package from Congress, warned that "millions of jobs and the livelihoods of people who have built their small business for decades are just withering away because Congress has offered no relief since March and will not survive until a vaccine is widely distributed. America’s hotel industry is on the brink of collapse.”

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Chambers of commerce and mayors from several cities, including Colorado Springs and Pueblo, also are investigating whether to join a program now being tested in Mesa County allowing businesses that complete a state certification program to operate with higher capacity limits. The Colorado Department of Public Health and Environment is seeking public comments on expanding the program statewide, which would be operated by local health departments and business groups.

Rachel Beck, vice president of government affairs for the Colorado Springs Chamber and EDC, said the business group signed a letter asking Gov. Jared Polis to approve the expansion. Other groups included in the effort included other chambers from across the state, the Colorado Chamber of Commerce, the Colorado Restaurant Association and Colorado Counties Inc.

The groups are asking Polis to approve the expansion with two twists — county health departments, rather than the state, would approve using the program in their counties, and capacity limits for businesses would be 50% or 175 people, whichever is larger, regardless of the COVID level the state has designated for that county. Beck said the local chamber supports the program and would "make sure it is implemented successfully" should the expansion be approved.

"The faster this program can be approved and businesses can open, the more businesses we can save. A matter of a few weeks could make a huge difference for many businesses," Beck said.

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The city of Pueblo and Pueblo County on Wednesday sought state approval to join the program. Under the state's schedule, counties could start operating under the program Dec. 18.

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The state guidelines for hotels, restaurants and meetings don't apply equally to all hotels and eateries — the Gaylord Rockies resort and the Westin Hotel at Denver International Airport have variances that allow them to continue to host small meetings and serve meals indoors to guests at their restaurants. The Broadmoor hotel had a similar variance but had to cancel meetings and shut down indoor dining when El Paso County went to tighter COVID restrictions.

The Gaylord Rockies and the Westin Hotel variances remained in place even though Adams County also is under the same COVID restrictions as El Paso County because they apply only to those hotels, while The Broadmoor's variance applied to all event venues in El Paso County. Mayor John Suthers said Wednesday that he has sought a similar single-location variance for The Broadmoor, which is owned by The Anschutz Corp., whose Clarity Media subsidiary owns The Gazette.

Mayhew said just a handful of COVID outbreaks have been traced to hotels and meetings, and that virtually all hotels have extensive cleaning and safety protocols in place to prevent an outbreak. The hotel and lodging group has proposed even more extensive safety and cleaning protocols as part of its bid to boost meeting capacity, including mandatory mask rules, required advance notification of safety protocols for meeting participants and comprehensive contact tracing.

The biggest issue, said Doug Price, CEO of Visit Colorado Springs, is uncertainty over when the state will increase capacity restrictions enough for larger meetings. He said fluctuating capacity restrictions has made booking meetings difficult for hotels, especially when they are competing with states and cities with fewer restrictions.

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Hotels in Colorado Springs, Price said, have survived on a relatively strong summer tourism season. Occupancy rates for local hotels has been between 63.9% and 70.9% between July and October, among the highest in the state and nation, according to the Rocky Mountain Lodging Report and Tennessee-based hotel research firm STR. Limited-service hotels have thrived by attracting leisure travelers, many from elsewhere in the state, while full-service hotels have struggled since they couldn't host large meetings, he said.

The Hilton Garden Inn-Downtown, Cheyenne Mountain Resort and Antlers and Mining Exchange hotels are good examples of that trend. The Hilton Garden Inn-Downtown has relied heavily on leisure travelers since the pandemic hit the state, but bookings have slowed in November, December and into next year, said Daniel Valdez, the hotel's general manager.

The Cheyenne Mountain Resort, Antlers and Mining Exchange hotels depend on meetings for much of their bookings and have lost bookings in November, December and into next year.

The Cheyenne Mountain Resort was forced to "cancel several bookings for December because we cannot have in-person events or indoor dining. As a result, we had to refurlough employees in those departments," said Jess Johnson, the resort's sales and marketing director. "Most of our bookings beyond February are still intact, but I can see those falling apart if we are still in red status a month from now."

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The resort hasn't had COVID cases among its guests, despite hosting "thousands" after reopening in late spring. Johnson called it "astonishing" that hotels like the Cheyenne Mountain Resort can't host meetings or allow indoor dining, even if they agree to follow local and state health guidelines, while other types of businesses remain open.

"This has had a big impact on us. It wasn't the inability to offer indoor dining, but not being able to host events has been a big blow in taking all of our business off the books," Johnson said. "We could put a tent outside for dining, but that comes with a tremendous cost and it isn't all that attractive to the customer or hotel guest, so we are offering curbside pickup for our meals instead."

Colorado Springs Mayor John Suthers and Avik Amin, with Pueblo-based AAA Hotel Developers, talk about the 120-room Hyatt Place Hotel AAA is developing in downtown Colorado Springs. (Video by Wayne Heilman)

The resort has tried to generate additional revenue by offering takeout meals for members of its Country Club of Colorado, and the hotel's management is looking at ways to expand that offer beyond club members, Johnson said. The resort also is offering a "holiday-party-to-go" meal package to employers who don't or can't host a holiday event for their workers, he said.

Perry Sanders, a partner in the Antlers and Mining Exchange hotels downtown, another in Taos, N.M., and several local restaurants, said bookings have declined sharply since El Paso County moved to COVID Level Red late last month. The move to more restrictions has prompted his Colorado Springs hotels and restaurants to furlough even more of his 300-400 employees with little hope of recalling them anytime soon.

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"This time of year is slow no matter what, but we have enough problems with people not wanting to travel. When you are not able to eat in the restaurant of the hotel where you are staying — room service only goes so far, and people want to get out of their room," Sanders said.

"I have an issue with there being no material association between sit-down restaurants that are following all the directives contributing to COVID-19 deaths (and) intensive care unit admissions."

Nearly all Colorado businesses are following state COVID-19 requirements, according to a field survey of 204 businesses conducted during the week of Thanksgiving by the Colorado Department of Revenue. Just two businesses included in the survey were disciplined as a result of dangerous conditions, according to a news release from the Colorado governor's office.

The pandemic has changed many of the opening plans for Kinship Landing, a boutique hotel in downtown Colorado Springs, said Bobby Mikulas, one of four people who developed, own and will operate the hotel. Kinship Landing, which will offer 80 beds in a mix of 27 private rooms, seven suites and six bunk rooms, will open Dec. 27, a month or two later due to pandemic-related construction and other delays, he said.

The hotel might delay or alter opening plans for its Homa café and bar as a result of COVID-related restrictions and the hotel is delaying its grand opening celebration and New Year's Eve event because both would attract large crowds, Mikulas said. Kinship Landing also reduced staffing plans three times in recent months and adopted more extensive cleaning and safety plans to keep guests safe, he said.

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"We are excited to be opening and there are plenty of reasons to believe we can meet our pre-COVID projections, but we have definitely adjusted those projections to prepare for what could be," Mikulas said. "We expect some challenging months ahead, but are hopeful there will be better times ahead" once the current wave of pandemic cases subsides.

Two hotels that haven't taken much of a hit are the seven-story, 120-room Hyatt Place hotel under construction across from City Hall in downtown Colorado Springs and a 65-room Holiday Inn Express underway in Manitou Springs. Both hotels aren't expected to open until August or September, likely after a COVID-19 vaccine is widely available, said Avik Amin, a partner in Pueblo-based AAA Hotel Developers, which is developing both hotels.

"Their timing may be okay, since they are opening in August or September. I'm thinking by then that tourism will be back into the flow of things by then," Suthers said Wednesday during a "topping off" ceremony for the hotel that included city officials because the hotel is in an urban renewal area. Suthers believes a vaccine, if distributed on the current schedule, will help restore demand for travel next summer.

Contact Wayne Heilman 636-0234

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