‘It’s devastating.’ Lexington hotels, conventions hit hard by mass cancellations

April and May are typically two of the busiest months for Lexington hotels and tourism industry.

But a cascade of cancellations of area conferences and sporting events because of coronavirus means once nearly-full hotels now have plenty of available rooms.

Officials with the Lexington Center Corporation, which oversees Rupp Arena, the convention center and the Lexington Opera House, said Thursday it’s too early to say how cancellations will affect its bottom line. But the losses could top $1 million.

“It’s devastating,” said Pam Avery, the president of the Bluegrass Hospitality Association, a trade group for hotels and other tourism-related businesses. Avery is also the general manager of the Embassy Suites by Hilton at Lexington Green.

“We are not alone in Lexington,” Avery said. “This is nationwide. Travel and tourism is probably the hardest hit segment right now in terms of closures and cancellations. From an industry stand point, we are on the front lines.”

Hotels struggle with cancellations

Some hotels have reported more than $1 million losses from canceled or postponed events that were scheduled in April and May. Some of those larger events include: the Alltech One conference (which is going virtual), the KHSAA Sweet Sixteen tournament and a regional NCAA track and field event at the University of Kentucky.

Keeneland announced it would hold its April spring meet but without spectators for at least its first two weeks. Most Lexington hotels are booked Thursday through Sunday in weekends in April, industry officials said.

Also hobbling the industry — most businesses have implemented out-of-state travel bans. Weekday reservations for business travel are also down nation-wide, hotel managers said.

Reservations are now tricky to predict.

Barry Kuhnke, general manager of the new City Center Marriott and Residence Inn hotels downtown, said they are still at about 50 percent occupancy for this weekend but next week is in flux.

“The upcoming week will be really interesting to see where we land. We’re still seeing cancellations, but also still seeing bookings,” Kuhnke said. “Usually you’re able to easily forecast on a short-term basis, right now that’s just too up in the air.”

But hotel officials said they are hopeful for a much better late spring and summer.

“We are a strong, vibrant industry,” Avery said. “The health and well-being of our guests and our employees is our top priority. We are all looking forward to a great summer and a great fall.”

Convention, event impact

But coronavirus-related closures are affecting other parts of the tourism industry as well.

Bill Owen, president and CEO of Lexington Center, said that they are expecting more events to postpone — as was the case with the Lexington Comic and Toy Convention — but have not heard from major concerts or Broadway shows yet.

“We just don’t know the depth or duration of the situation and until we do it’s unpredictable how widespread or long it will go, or what the financial consequences for it will be,” Owen said.

Over the next month, the three venues had been anticipating about 250,000 visitors. If all events are called off, he said, the center will be looking at losses from attendance-based revenue, including concessions and parking, of well over $1 million, he said.

“It’s going to be very significant,” he said “We’re waiting for this to play out. Our facilities were booked up through next week ... we’ve got another eight or nine days for dates beyond that to see what the outcome will be.”

Tax implications from coronavirus

The Lexington Center is in the middle of a more than $275 million expansion of its convention center. Part of that $275 million expansion will be paid for through a local hotel and motel tax. VisitLex, Fayette County’s tourism bureau, is also funded through that local hotel tax. That tax will take a hit due to loss of business during April and May.

That tax has seen steady growth in recent years. In 2019, it generated more than $16.6 million, according to VisitLex numbers. In total, Fayette County hotel room revenue topped $196 million in 2019, an increase of $5 million over 2018.

Mary Quinn Ramer, president of VisitLex, said it’s too early to say how the mass cancellations in the industry will affect hotel and motel taxes. There is one certainty: the impact will be huge.

“It is difficult to pinpoint the economic impact because circumstances are changing by the hour, but it is significant,” Ramer said.

This story was originally published March 13, 2020 at 1:52 PM.