Up to half of San Francisco hotels could close within 2 weeks Grim outlook for hotel industry through at least mid-May say CEOs

The Hotel Vitale slated to become San Francisco's first 1 Hotel, has suspended operations due to the coronavirus crisis. The Hotel Vitale slated to become San Francisco's first 1 Hotel, has suspended operations due to the coronavirus crisis. Photo: Hotel Vitale Photo: Hotel Vitale Image 1 of / 13 Caption Close Up to half of San Francisco hotels could close within 2 weeks 1 / 13 Back to Gallery

With demand for hotel rooms plummeting amid coronavirus fears, "one third to one half of San Francisco's hotels will likely suspend operations and close within the next two weeks," said Joe D'Alessandro, the president and CEO of the San Francisco Travel Association.

These hotels would be following in the footsteps of the 401-room W Hotel which temporarily closed on Tuesday. Other major hotels that are temporarily closed, closing, or no longer accepting reservations currently include The Virgin Hotel, Hotel Vitale, and The Four Seasons hotel. San Francisco's largest hotel, the 1,921-room Hilton Union Square and its sister property, the 1,024-room Parc 55, remain open remain open at this time, but "are limiting specific hotel services and amenities" according to a spokesperson.

While several other major hotels have not officially announced closures, D'Alessandro said that many are no longer accepting any reservations. "Like we've already seen in tourist-focused areas like Anaheim and Las Vegas, the hotel industry here is shutting down," he said.

This grim outlook is shared by Hilton CEO Christopher Nassetta, whose company is already shuttering namesake properties in New York and Washington but not yet in San Francisco. He said average hotel occupancy rates could fall to as low as 10 percent worldwide as governments enact travel bans. In some U.S. cities, occupancy rates are "running in the single digits," he said.

In a similarly bleak video message to employees, Marriott International CEO Arne Sorenson said hundreds of Marriott hotels have already closed or will soon do so — and that some may never re-open. Speaking at times on the verge of tears, he said he expects the coronavirus crisis to hit his company harder than 9/11 and the Great Recession combined.

A message to Marriott International associates from President and CEO Arne Sorenson. pic.twitter.com/OwsF14TZgb — Marriott International (@MarriottIntl) March 19, 2020

D'Alessandro said that San Francisco's recently renovated Moscone Convention Center is closed, and part of the gigantic space is being used as office space for the city's Dept of Emergency Services employees during the crisis.

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"All meetings and conventions are now canceled through at least mid-May. We've lost about $200 million in citywide convention business in the first quarter alone," he said.

Looking to the future, D'Alessandro said, "It's going to be a long, slow recovery once the worst is over. In China, it's taken about two and a half months for them to start to see a trickle of normalcy, and it could take at least that long here, but who knows?"

Using that prognostication, it's going to be at least mid-May before tourism, meetings and conventions in the city could see a turnaround.

Kevin Carroll, the executive director of the Hotel Council of San Francisco said that his organization helping with the city's efforts to possibly quarantine patients in hotels who are in living situations where separation from others is not possible.

While airlines are seeking a $50 billion bailout from the federal government, the hotel industry is seeking a total of $250 billion as hotels shut down and lay off employees. At their meeting with President Donald Trump on Tuesday, top hotel executives asked for $150 billion to help them make loan payments and support laid-off employees. Another $100 billion would be used to pay their suppliers.

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Chris McGinnis is SFGATE's senior travel correspondent. You can reach him via email or follow him on Twitter or Facebook. Don't miss a shred of important travel news by signing up for his FREE biweekly email updates!

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