Some Denver Area Hotels Dim The Lights And Wait For The Creditors To Come Knocking
A sixth of area hotel loans are in trouble, with more defaults expected next year amid the pandemic
Months of empty rooms and discounted rates are catching up with hotel owners in Denver and across the country. Unless Congress steps in with more financial assistance or travel spending finds a way to surge, a big shakeout looms next year, industry insiders warn.
"The lockdowns are having a devastating effect on the hotel industry," said Eric Holtze, co-CEO at Denver-based Stout Street Hospitality, which recently modified $51.3 million in loans on the Magnolia Hotel Denver. "This has gone on way longer than we had hoped."
In 2016, Holtze and his sister Sarah Treadway, co-CEO and president, took over the family business. Their father, Steve Holtze, purchased the American National Building on 17th Street in 1993, converting it into the Magnolia Hotel Denver. That hotel served as a model for five other boutique urban hotels.
At the start of the year, the Magnolia hotels were running 75% full and operating ahead of budget. By April, occupancy was down to 10%. Staffing was cut deeply and managers were asked to take on day-to-day chores. For a brief period, Treadway was making beds, Holtze was folding laundry and the general manager was running the front desk.
"Everyone was doing what we could to take care of the few guests we had," Treadway said. "We feel blessed because our team of people is so loyal and so dedicated. People were willing to jump in and work in every department."
