Arkansas Hotels Doing Better as Group Business Checks Back In

The general manager for Jonesboro’s newest hotel and convention center predicts this year it will see close to the level of business expected in 2020, before the pandemic hit, as business groups return.

“We’re finally seeing the group business come back,” said Kraig Pomrenke, the general manager of the Embassy Suites by Hilton Jonesboro Red Wolf Convention Center. “That particular market segment is what really dried up for all of us. Anybody that had a convention center-type hotel or big space hotel, that one really hurt.”

The Embassy Suites was struck particularly hard as its $58 million, 203-room hotel opened on Dec. 30, 2019 — about 70 days before the pandemic arrived in Arkansas. An attached convention center offers 40,000 SF of meeting and event space.

The property had “a lot of business on the books” in its inaugural year, but all of those events were postponed, Pomrenke said.

Most of the events, though, have been rebooked for 2022. “This year, so far, is looking to be a pretty good year for us because of those delayed bookings” that have been rescheduled, he said. But bookings still have not completely rebounded. Some groups, such as those in the medical industry, are still hesitant to schedule events, he said. While the hotel’s business isn’t back to what it had booked for 2020, “it’s close,” he said. Pomrenke declined to release revenue figures.

Arkansas Business tracks hotel tax collections in 10 select Arkansas cities. Last year, all of the cities reported tax revenue gains from the previous year. And compared with 2019, the pre-pandemic year, seven cities reported hotel tax revenue increases.

Meanwhile, other hotel operators in Arkansas are dealing with a surge of leisure travelers as workers and supplies have become scarce.

“When COVID was really hitting, we were suddenly bombarded by families and people from states that were not part of our normal demographic,” said Pati Brown, lodge manager at Mountain Harbor Resort & Spa in Mount Ida, which has 82 units. “We lost a lot of our staff almost immediately because they were scared to work in a frontline service area.”

The owner of Mountain Harbor, Bill Barnes, also has properties at Self Creek Lodge & Marina on Lake Greeson in Kirby (Pike County) and Iron Mountain Lodge & Marina in Arkadelphia.

Revenue at each of those properties was up 5%-10% each year for the last two years as families sought vacation spots away from cruise ships or amusement parks, Brown said.

At the Red Apple Inn & Country Club in Heber Springs, General Manager David Smith said that once the pandemic hit in March 2020, all its booked convention business was canceled.

Instead, the Red Apple, which features 59 rooms, 10 condominiums, two rental homes and about 10,000 SF of convention space, saw a rise of leisure travelers who flocked to the resort on Eden Isle.

“In the last two summers we’ve had the best summers we’ve had in years and years,” Smith said.

He expects the business will continue. In 2020, the Red Apple attracted a number of Arkansans who had never stayed at the hotel, and those people returned last year. They are expected again this summer.

In addition, the Red Apple is attracting other business. It has five weddings booked for the spring; before the pandemic, it hosted about two or three weddings a year.

“The business groups are coming back with some adjustments,” Smith said. “And we’ll have the social [traveler] again for the lake business. I think it’s going to be a good year.”

Hazmat Suits

After the pandemic emerged in Arkansas, hotels adjusted how they operate.

The Red Apple closed for about seven weeks, sending its workers home.

Jonesboro’s Embassy Suites remained open, but reduced its staff from 200 to 24. “We ran with a very small staff for several weeks until … business allowed us to expand back,” Pomrenke said.

The hotel received an influx of customers after the March 28, 2020, tornado tore through Jonesboro, flattening homes and injuring about two dozen people.

The newly homeless stayed at the Embassy Suites. “So we ended up filling back up for a period of time with displaced residents, the Red Cross, Salvation Army,” Pomrenke said. “We had quite a few of the displaced people here for months until their home was rebuilt.”

When the pandemic first surfaced, hotels enhanced their cleaning protocols. At Mountain Harbor Resort & Spa, housekeepers started using electrostatic misting machines to disinfect rooms.

“When COVID first hit, we had our staff in disposable hazmat suits cleaning rooms,” said Mountain Harbor’s Brown. Management also told staff members to wear gloves and masks and throw them away after every unit was cleaned.

Brown said the resort also removed the magazines and a directory that were left in rooms to reduce the items that were touched by several people. The resort went to a digital directory, but has since returned to the paper directory after discovering that people enjoy something they can hold in their hands, Brown said.

To keep customers and staff safe at the Embassy, “we tried to do everything we could to separate staff from each other,” Pomrenke said. Cleaning crews didn’t work in teams unless they had to, and masks were required for the staff, he said.

Some of the cleaning changes at hotels are expected to remain, as several hotels aren’t providing daily housekeeping services unless the customer requests it. “What we found out with COVID is that people didn’t want us in their rooms,” said Brown. “I guess they like the privacy.”

Customers are given the option to call the front desk if they need additional supplies.

The Red Apple no longer offers room service, Smith said. “And if somebody has a problem in the room, they have to be out of the room before we’ll take care of it,” he said.

Labor Shortages

Labor shortages have hit the hotel industry particularly hard. The number of Americans who quit their jobs in December was 4.3 million, down from a record 4.5 million in November, according to the latest job openings and labor turnover report from the U.S. Labor Department. The most resignations came in the leisure and hospitality sector.

After Red Apple reopened after being shut down for about two months in 2020, all of its staff returned.

“We made it through last summer and into the fall, then we started getting turnover,” Smith said. “We haven’t been able to get fully staffed since then.” At full staff, the hotel has about 85 employees; it has five open positions now.

The Mountain Home Resort also is facing labor shortages, with its problems beginning at the start of the pandemic. To deal with the shortage, the management team worked harder, Brown said. “At one time, the owner was making beds,” Brown said.

To attract workers, she said, the resort focuses on the “great team” and “great environment that we have out here.”

It has about 70 employees, but will need about 100 in the summer.

“We’ve had employment ads out for 30 days and we’ve had virtually no respondents,” she said. And of the people who respond, once they realize they have to take a drug test, “we never hear from them again,” Brown said.

Supply Chain Issues

In addition to the labor shortage, hotels are dealing with supply chain issues.

Smith, of the Red Apple, first started noticing items being unavailable in the fall. Most of the shortages were food items for Red Apple’s restaurant. “We’ve had to adjust menus accordingly,” he said. “And sometimes we just have to say we’re out of an item for a while until they get it in.”

At Mountain Harbor, Brown said securing some supplies remains difficult. An order for a hot tub cover might take six months to fill, and parts for heating, ventilating and air-conditioning units are becoming harder to find.

The Embassy Suites also has felt the cracks in the supply chain. “It’s pretty rare, whether it’s food or beverage or guest supplies or building supplies, that we’ll get 100% of our order filled,” Pomrenke said. “There’s been many times that we’ll tell our guests in the restaurant we’re out of this and we’re out of that, just because we can’t get it.”

He said the solution is just “do the best you can.”