Hotel Group: COVID Impact on Travel 9X Worse Than 9/11; as Queen Mary Operator Files Chpt 11

According to a report by the Long Beach Post, the Singapore-based Eagle Hospitality Trust, the operator of Long Beach's Queen Mary, has filed for chapter 11 bankruptcy protection, placing the city's landmark on a perilous cruise.

Why it matters:

Since the start of the pandemic, the hospitality industry has been in crisis mode, and cities like Long Beach that rely on hotel taxes from tourism and events have seen a drop in revenue. COVID has shot a $30 million hole in the city's budget. Plus, according to the American Hotel and Lodging Association, a trade group that represents the hospitality industry, said in a report that "direct state and local tax revenue generated from hotels fell by one-third in 2020 and will not rebound until 2023".

The big picture:

The AHLA wrote in its annual "State of the Hotel Industry" report that the financial fallout of the COVID-19 pandemic "has been nine times that of 9/11."

• AHLA anticipates business travel to lag at least 85% through April and don't expect travel to return to 2019 levels until 2024.

• The AHLA forecast that hotel occupancy to average just 52%, compared to 66% in 2019.

• In May 2020, the Queen Mary's operator Urban Commons issued a report stating the ship generates $93.7 million in "economic output," or value, for the city, per Signal Tribune.

• Eagle Hospitality Trust's bankruptcy documents obtain by LBP state that the company is drowning in $500 million in debt.

Crash Course: Queen Mary

• The City of Long Beach owns the stationary ship, but Urban Commons has a 66-year lease to operate the old cruise ship and develop the adjacent land around it.

• In 2017, a survey conducted by naval architects and vessel specialists found that the ship is in such a terrible shape that the Queen Mary would need at least $289 million in repairs, per LA Times.

• In 2019, the Queen Mary's operator Urban Commons created Eagle Hospitality Trust and listed the company on the Singapore Stock Exchange to raise funds for its US-based projects like the $250 million Queen Mary Island project.

• The City of Pasadena sued Urban Commons for failure to pay back taxes, per the LA Daily News.