OAKLAND — A serious Oakland hotel will close its doors this summer and lay off greater than 100 employees, a heartbreaking decision that underscores the dire situation of the Bay Area's struggling hotel sector.
The Hilton Oakland Airport Hotel will cut 152 jobs, the hotel chain announced in an official notice to the state Department of Employment Development.
“It is with regret that we must inform you of the closure of the Hilton Oakland Airport hotel at 1 Hegenberger Road in Oakland,” Terry Lewis, Hilton area vice chairman, wrote within the WARN letter to the state EDD.
According to the WARN announcement, the shutdown is scheduled to happen on August 28.
The closure of the Hilton Oakland Airport hotel is further evidence that the Bay Area lodging market remains to be affected by economic problems even after the coronavirus outbreak greater than 4 years ago.
The problems of the Bay Area hotel market primarily affect accommodation complexes that cater to business travelers and should not positioned in vacation areas comparable to Wine Country, the Monterey Bay Region or Big Sur.
“The Bay Area hotel market is still struggling,” said Alan Reay, president of Atlas Hospitality Group, which tracks the California lodging market. “The costs of operating large, business-oriented, full-service hotels seem to exceed the revenue they can generate.”
The hotel buildings and customary areas are owned by Park Hotels & Resorts, which has leased the land beneath the hotel from the Port of Oakland.
Park Hotels & Resorts has divested itself of ownership of two upscale hotels in San Francisco as a consequence of weak financial conditions.
Park Hotels said they might not comment on the upcoming closure of the hotel.
Both Oakland and San Francisco are stricken by problems that make these cities less attractive to visitors and business travelers.
“You have problems with crime on Hegenberger Road in Oakland and you have problems with crime and homelessness in San Francisco,” Reay said.
Hilton officials said they’d attempt to help laid-off staff on the Oakland hotel.
“We deeply regret the impact this closure will have on our dedicated employees and their families,” Hilton said within the WARN letter to the EDD. “We are committed to providing support during this transition period, including providing options for transfer to other Hilton locations in the Bay Area.”
Despite the closure in Oakland, Hilton emphasizes that it’s committed to the Bay Area market.
“Hilton continues to welcome guests throughout the Bay Area, where Hilton and our franchise partners operate nearly 50 hotels,” Hilton said in a comment to this news organization.
The renowned hotel operator said he still sees the Bay Area as a market that gives quite a few opportunities.
“We remain committed to doing our part to drive business, tourism and growth in the Bay Area and California,” Hilton said within the WARN letter.
However, Reay said larger business-oriented hotels comparable to those in San Francisco, Oakland and San Jose still face problems as a consequence of a scarcity of business travelers and problems with the region's office centers.
“The office market is still weak, people are still working from home and there's a sharp decline in conventions,” Reay said. “When you factor in the crime problems on Hegenberger Road in Oakland and in San Francisco, that's why these hotels are struggling.”
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