A report by The Charlotte Observer that found Charlotte-Mecklenburg-High Point (CMH-HPG) had lost $100 million in revenue for the first quarter of the year is not good news for the city’s struggling hotels.
The hotel industry, which was once the darling of Charlotte’s tech-heavy economy, has suffered from a combination of high hotel occupancy rates and lower hotel occupancy, a trend that has been exacerbated by the recession and has left many of its downtown hotels, which traditionally draw large crowds, empty.
The Observer reported the CMH-HDP had a $75 million loss for the fourth quarter of 2016, an increase of $1.2 million from the same period last year.CMH, which is owned by Hilton Hotels and Resorts International Inc., said in a statement it had lost a total of $6.9 million for the year.
The Charlotte-mecklenberg-Highpoint, which hosts a number of conferences, events and trade shows, reported a loss of $7.1 million for 2016, a drop of $0.6 million from 2015.
The CMH said the loss of revenue was due to lower occupancy rates at its hotels, primarily due to a lack of guests at its downtown convention center, and increased competition from other hotels in the area.CMHS-HDB said it expects to incur a further $8 million in restructuring costs in 2017.
CMH also said it plans to reduce its operating costs by $100.4 million for 2017, and expects to make $8.5 million in annual operating revenue.
CMHS-HPD reported $9.3 million in losses for the same quarter.
CMHD said it had $6 million in net revenue in the fourth fiscal quarter.CMHD also said CMH has received $9 million in reimbursement from the U.S. Bureau of Labor Statistics for wages paid to hourly employees in the hotel sector.
The city’s unemployment rate is 5.7 percent.CMHI said CMHI expects to earn $3.4 billion in 2017 from its operations in the CMHC and CMH, and said CMHE expects to post a net loss of between $2.4 and $2,936 million for its first quarter.
The city is under the control of a Democratic-controlled legislature that is set to begin a new term on April 15.