Two Major Events Which Impacted The Hotel Industry in Salt Lake City-Utah

There are two major events which have impacted the hotel industry in Salt Lake City, Utah, and the ongoing Covid-19 pandemic and the 2002 Salt Lake City Winter Olympic. As a result, the Event Impact Analysis of Salt Lake City has some unique findings. Salt Lake, is the most populous county in the state of Utah, is currently in high level of coronavirus transmission. Hotels are open and are required to follow state and county health guidelines. The restaurants, businesses, and attractions in and around Salt Lake are opening slowly and cautiously with health protocols in place. There are 252 hotel properties which participated in this STR data. According to the STR LLC. data provided, the pie diagram shows that 34.98% of the hotel rooms in Salt Lake City, Utah are Upscale Class,28.92% of the hotel rooms are Upper Midscale Class, followed by 13.36% hotel rooms which are Economy Class. Some examples of hotels in the Upscale class include Courtyard Salt Lake City Layton Hyatt House Salt Lake City Sandy, Residence Inn Salt Lake City Sandy and Homewood Suites by Hilton Salt Lake City Midvale Sandy.

Source: Texas Tech University
Source: Texas Tech University
Source: Texas Tech UniversitySource: Texas Tech University
Source: Texas Tech University

The ongoing Covid-19 pandemic has a major impact on the hotel industry in Salt Lake City, Utah. As per STR, the Daily OCC% was around 62.75% from November 2019- mid-March 2020 and dropped to around 42.3% from March-Dec 2020, but there was a gradual increase in August 2021 and a sharp decrease from October- November 2021 Using the STR data, there were 784,288 rooms sold from March to May 2020, an average of 8,525 nightly. . In Salt Lake City, theADR during the ongoing Covid-19 pandemic decreased to below $70 but saw a steady rise and drop since Feb 2021.The room revenue did drop from $56.3 million in February 2020 to $11.9 million in April 2020 according to STR. The Supply and Demand figures are among the key indicators in benchmarking hotel performance in Salt Lake City, Utah. According to the data provided by STR, during some periods supply growth may outpace demand growth, especially in markets that are performing well. In 2019, room supply grew at 2.5% while room demand grew by only 0.8%; however, occupancy was at a healthy 69.4%. . Meanwhile, the managers can halt the hotels in the planning stage , however hotels in-construction stage cannot be stopped. The impact of the Covid-19 pandemic on the hotel industry in Salt Lake City will be understood thoroughly in a few years.

Source: Texas Tech UniversitySource: Texas Tech University
Source: Texas Tech University

Using STR data, and plotting the OCC% from 1988 to 2002, it is evident that the OCC% was the highest in August 1996 and the lowest in May- June 2000. There was a decrease in OCC % from 1996 to 2002. The reason for decrease in OCC % in Salt Lake City is explained by looking at changes to supply from the period 1996 to 2002, you can understand that the reason for the decline in occupancy . While there was a significant pick up in room demand from 2000-2002, there was more substantial growth in room supply from 1997-1999. They were anticipating an increase in international travelers and cargo for the 2002 Winter Olympics. The 2002 Salt Lake City Winter Olympic Games began in February, only five months after the 9/11 attacks. This tragic event plus the memory of the Centennial Olympic Park bombing during the 1996 Atlanta Summer Games created awareness about the negative risks involved with hosting public events. As a result, federal government and its security institutions spend a lot of money on security. The Salt Lake City Organizing Committee (SLOC), the State of Utah, local government, and the Federal government spent $1.3 billion, $150 million, $75 million, and $342 million, respectively. The SLOC, State of Utah, and local government financed 82 percent of the costs of the 2002 Games. Utah enjoyed publicity, prestige, and many other intangible benefits, such as rewarding community involvement in hosting the games. As per the STR historic data, there was an upward trajectory of revenue of hotels from 1988 to 2002. Furthermore, the Revenue percentage change shows the fluctuation with 2002 generated the highest revenue percentage change at 25% in comparison to previous years. Investments in expanding hotels and ski resorts proceeded regardless of the Olympics. Moreover, the excitement and capital associated with the Olympics resulted in both types of investments constructed rapidly and extravagantly.

Rachel Mammen
Ph.D. Candidate in the Department of Hospitality and Retail Management at Texas Tech University
+1 806 834 3471
Texas Tech University

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