Masters Without Golf Fans Pushing Augusta Hotels to Delinquency
(Bloomberg) -- For Augusta’s lodging market, the Masters really is a tradition unlike any other -- one that puts well-coiffed heads in hotel beds, and lifts room rates like a 9 iron.
This year, the annual golf tournament was postponed from its usual April date, and will be played this month without fans walking the course or checking into the Georgia city’s hotels.
That’s bad news for properties like the Partridge Inn, a historic 143-room hotel that’s 60 days delinquent on its $15 million mortgage, according to an Oct. 19 report compiled by Wells Fargo & Co.
A representative for the owner -- listed in property records as Partridge Inn DE LLC -- declined to comment.
At least two more Augusta hotels are delinquent on loans that have been packaged into commercial mortgage-backed securities, data compiled by Bloomberg show. Several others are on servicer watch lists.
Covid-19 has punished the entire travel industry, grounding corporate travelers and pushing vacationers to reconsider trips. Lodging markets across the U.S. are dealing with the fallout of canceled events, and the impact is acute in Augusta, where the local calendar revolves around the Masters.
Local schools typically schedule spring break around the tournament, and many families book vacations and rent out their houses. Visitors flood in, making restaurant reservations and hotel bookings months in advance.
“It feels like this city triples in size,” said Bennish Brown, chief executive officer of the Augusta Convention & Visitors Bureau.
Brown expects this year’s tournament to attract some visitors, including corporate sponsors, television crews and the golfers themselves, but it won’t be enough to push occupancies and room rates to past highs.
Augusta hotels recorded revenue per available room of $338 during the week of the 2019 Masters, held in April, according to lodging-data provider STR. That compared with $74 during the same period of 2018, a year when the tournament was held on a different calendar week. The difference was worth roughly $185,000 to a 100-room property.
This year, Augusta hotels saw revpar dip to $25.60 for May, down 46% from the year before. The pandemic would have cost the same 100-room hotel roughly $67,000 for the entire month, meaning a single lost week in April probably cost hotel owners more than months of Covid-related slowdowns.
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