The head of the Bloomington-Normal Hotel and Lodging Association said the industry is generally doing well at the moment, with a lot of growth in average room rates and fairly steady occupancy rates. Hiring and retaining workers is the biggest challenge.
“Overall, the demand is good. People are traveling. Businesses are back to holding events and having people travel for work,” said Kyle Davis, president of the BNHLA and also general manager at Candlewood Suites in Normal. “So we’re seeing overall a very healthy industry right now in terms of demand and business levels.”
The industry’s average occupancy rate for 2023 (January-May) was around 55%, down slightly compared to that period last year (mid-60%), Davis said.
Rivian, which has quickly become McLean County’s second-largest employer, continues to be a big driver of hotel guests, he said.
“With the housing crunch, the hotels really stepped up and helped enable the community to continue to grow,” Davis said. “We’ve been that temporary housing for people like contractors that know they’re only gonna be here for a couple weeks or months, or families that are waiting on their house to be built or sold or closed on. That’s in addition to all of the other travel that’s happening. Rivian is the big fish right now, but there’s plenty of others in the pond too.”
More generally, Davis said business travel is “definitely coming back” from the COVID freeze.
“It’s not quite where it was pre-pandemic. Personally, I don’t know if it ever will be, just because of all the changes in the ways people are working, with remote and hybrid environments. I don’t know that it’ll ever come back to what it was in, say, 2019,” he said.
While there’s not a lot of new-hotel construction planned in the short term in Bloomington-Normal, Davis said there have been several hotels that have changed ownership post-COVID.
“Once travel came back, especially in Bloomington-Normal, (there was) a little bit of a boom. There was some demand here that wasn’t available in other communities. So we saw a lot of investors who were trying to get into this market,” Davis said.
Biggest challenge: Hiring and retaining workers
Twin City hotels’ biggest challenge is hiring and retaining workers, Davis said. Bloomington-Normal’s jobless rate was just 3.5% in May, the second-lowest for any metro area in Illinois.
In response, some hotels have bene forced to alter the services and amenities they offer, Davis said. Housekeeping might be offered every third or fifth day, instead of every day. A bigger hotel might offer fewer plated meals and more buffet-style meals that are less service-intensive.
“It’s not a particular hotel or a particular style of hotel. It’s pretty much across the board in the industry. Finding that talent is difficult,” he said.
Wages are rising. Average weekly wages for a hotel worker in McLean County climbed to $522 in 2022, up 15% from the year before and 42% from before the pandemic, according to the U.S. Bureau of Labor Statistics. Davis said he’s heard of hotels offering signing or retention bonuses too.
Davis said a new state law may help make hotel jobs more attractive.
HB 2220, which was just signed into law, will allow hotels to refuse service or remove customers who engage in abusive behavior towards hotel employees. Previously, state law did not explicitly allow hotels to remove a customer for verbally abusing employees – only when it escalated to physical assault.
“It’s a huge deal for the health and safety of our employees, for the mental health of our employees, to know that they’re now protected when they come to work, and not have to withstand verbal abuse from a guest – it’s a huge win for us in the industry,” Davis said. “It will hopefully play into being able to recruit and hire and retain workers in the future.”
The new state budget also includes a $2.5 million grant to the Illinois Hotel and Lodging Association to set up a dedicated workforce development program focused on hotels. The grant will help support the efforts of Illinois hotels to fill vacancies in ways they previously could not and provide more opportunities for workers seeking employment in the hospitality industry, providing a path to a fulfilling and upwardly mobile career even without a four-year degree requirement, according to the IHLA.
