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The Hilton Palacio del Rio, a riverside hotel popular with tourists in normal years, struggled to book rooms for weekdays through much of the pandemic. But in the last few weeks, something has changed.

Leisure travelers, pent up during the pandemic’s worst months, have flooded into the city for spring break and booked rooms for the Easter holiday.

At the same time, the hotel workers needed to serve those guests have yet to return.

“The timing is unfortunate for us,” said Robert Thrailkill, who oversees the hotel as vice president of operations for Zachry Hospitality. As a result, he said the hotel has had to sometimes cut its number of available rooms, just because there isn’t enough staff to cover all of them.

“I have a very tired staff working six, seven days a week, and long hours,” he said.

It’s a conundrum many hotels find themselves in.

Occupancy rates for the city’s hotels have surged in recent weeks, surpassing even their pre-pandemic levels, according to the latest figures from STR, a hotel consulting company that tracks hotel occupancy and revenue.

The firm reported that for the week ending March 20, San Antonio’s daily hotel occupancy rate averaged just shy of 82% – roughly 7 percentage points higher than it was for the comparable week two years earlier, in 2019.

The rate was less than 29% for the same week in March 2020, shortly after the pandemic’s onset, and the same week that Gov. Greg Abbott declared a statewide emergency and issued an executive order shutting down bars, restaurants, and schools. Hotel bookings continued to sag through the rest of the year, especially during the winter months when COVID-19 cases skyrocketed.

Paul Vaughn, senior vice president for Source Strategies Inc., a hotel industry consulting group based in San Antonio, said 2020 saw the “worst hotel performance” since the company began tracking hotel numbers in the late 1980s.

With fewer rooms to manage for months on end, many hotels cut hours and laid off staff. Now as demand skyrockets, job postings for hotel housekeepers and in-house restaurant waitstaff are going unanswered.

The labor shortage has cut across the entire city, affecting more than just hotels downtown, said Michelle Madson, president and CEO of the San Antonio Hotel & Lodging Association.

“Most properties are hiring right now and there is a lot of opportunity in a variety of hospitality jobs across the city,” Madson said in a prepared statement. “We are excited that, as we move into the summer, the opportunity for increased travel will help us rehire many of our citizens that were impacted by the pandemic.”

Response to the help-wanted ads may be sluggish because workers are taking time to find the best jobs, said Keith Phillips, assistant vice president and senior economist at the Federal Reserve Bank of Dallas. The most recent federal stimulus package, the American Rescue Plan, extended unemployment insurance and the bonus $300 weekly payment until Sept. 6. Combined with the recent $1,400 stimulus checks, Phillips said workers have more breathing room to hold out for jobs with the highest wages, the most regular hours, or that fit their skillset.

Meanwhile, the surge in demand for hotel rooms continue.

Much of the uptick can be attributed to the changing tone in Texas, hotel operators say. Gov. Greg Abbott lifted all pandemic-related restrictions March 10, and the number of new daily infections has roughly stabilized after dropping to the same lull seen last summer. The vaccination rate has been advancing at a steady pace.

“People want to get out, they want to eat, and they’re feeling safer,” Phillips said. And after months of reduced consumer spending, higher rates of personal saving have left many Americans flush with cash.

“Checking accounts are quite full right now,” he said.

Thrailkill and other hotel operators pointed to specific reasons for the surge in hotel occupancies: spring break and the NCAA tournament, but also medical personnel traveling to the city help with vaccinations.

Sandra Wise, property director at O’Casey’s Boutique Inn and the Bonner Garden Bed & Breakfast, said upcoming in-person graduations have also driven a new demand for reservations.

Whether the travel surge is temporary or here to stay remains to be seen.

If cases begin to rise again, as they did after family gatherings over the winter, “people may be leery of traveling again,” Phillips said.

Waylon Cunningham

Waylon Cunningham

Waylon Cunningham writes about business and technology. Contact him at waylon@sareport.org.