Every other year in October, hotels in Midland and Odessa are fully booked during the week of the Permian Basin International Oil Show. But this year, as was the case with most major events, the oil show was canceled, adding to the “double whammy” hotels were already facing from the pandemic and lower oil prices.
That combination has led to hotels in the Permian Basin faring “substantially worse” than hotels across Texas, where there’s been a statewide revenue drop of 64 percent, according to Keith Dial, partner and regional sales director at the DoubleTree by Hilton Hotel Midland Plaza.
By the time the oil show’s executive committee announced in July that the show would be postponed until October 2021, hotels had already been suffering from four months of cancellations and losses. News of another cancellation didn’t come as a shock, Dial said.
But while the oil show is one of the biggest events of the year for hotels, Dial said it doesn’t usually make or break the entire year in the way many people think.
“In a boom year, it’s kind of like just a flutter, because we’re busy all the time in a boom year,” he said. “But in a year like this, it would have substantially helped in the month of October.”
Hotels earn about a third more revenue during the week of the oil show compared to the rest of the year, according to Dial. However, what has hurt hotels in Midland more than the cancellation of any one large event is the cancellation of conferences, weddings and other smaller events that has been occurring since March, he said.
And more than any events being canceled, what has devastated Midland’s hotel industry is the loss of the “Monday through Thursday” crowd who fly in from Houston, Dallas or other energy centers to work in Midland for a couple days.
“Everyone’s bread and butter is that day-to-day — one or two nights or three nights from an individual or company business that comes in very steadily over the course of a year,” Dial said. “That’s where you survive in this economy.”
Dial said events such as the oil show are “gravy” on top of steady bookings throughout the year during a good year, and that stability is what’s missing as oil prices remain low and less activity in the oil field translates to fewer people traveling for work.
He estimated that about a third of the staff at the Midland DoubleTree has been furloughed, and those who have returned to work have reduced hours because there’s not enough to do.
“We’d love to see them back being able to work full-time and take care of their families, and hopefully, we’ll get there,” he said. “I really hope we get there before the end of the year but you’ve just got to look at that realistically, and it doesn’t look like that – not until this vaccine comes along and gets some distribution and people start traveling again.”
Dial fears, though, that travel won’t pick back up to the same level, as companies have become accustomed to holding meetings and conferences over online platforms like Zoom.
And while some industries also affected by the pandemic, such as the airline industry, have received aid from Congress, the hotel industry has not received similar federal relief. Dial said they continue to be hopeful assistance will soon be on the way.
In the meantime, he said they’ll do their best to ride out this downturn and stay a part of the community.
“We hope to get something that will help us buy some time before things stabilize, because we desperately want to pay our bills,” Dial said. “We want to do that – this is in our DNA out here, I think. We don’t want to be just dragging along.”