OAKLAND — A big hotel in Oakland will shut its doors this summer and idle more than 100 workers, a wrenching decision that underscores the devastation in the Bay Area’s battered lodging sector.
Hilton Oakland Airport Hotel will chop 152 jobs, the hotel chain reported in an official notice it sent to the state Employment Development Department.
“It is with regret that we inform you of the closure of Hilton Oakland Airport Hotel located at 1 Hegenberger Road in Oakland,” Terry Lewis, a Hilton area vice president, wrote in the WARN letter to the state EDD.
The shutdown is scheduled to take place Aug. 28, according to the WARN notice.
The Hilton Oakland Airport Hotel’s closure offers fresh evidence that economic maladies continue to afflict the Bay Area lodging market in the wake of the coronavirus outbreak more than four years ago.
The ailments for the hotel market in the Bay Area affect primarily lodging complexes that cater to business travelers and those that are not located in resort areas such as the Wine Country, Monterey Bay region or Big Sur.
“There are still a lot of problems with the hotel market in the Bay Area,” said Alan Reay, president of Atlas Hospitality Group, which tracks the California lodging market. “The cost of operating big full-service hotels that are business-oriented seems to outweigh the income they can generate.”
The hotel buildings and common areas are owned by Park Hotels & Resorts, which is leasing the land beneath the hotel from the Port of Oakland.
Park Hotels & Resorts has walked away from its ownership of two upscale San Francisco hotels due to their faltering financial performance.
Park Hotels said they could not comment about the pending closure of the hotel.
Both Oakland and San Francisco are plagued by problems that tend to make those 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 would attempt to assist the displaced workers at the Oakland hotel.
“We deeply regret the impact this closure will have on our dedicated employees and their families,” Hilton stated in the WARN letter to the EDD. “We are committed to providing support during this transition, including providing options for transfer to other Hilton locations in the Bay Area.”
Despite the shutdown in Oakland, Hilton says it’s committed to the Bay Area market.
“Hilton continues to welcome guests across the Bay Area where Hilton and our franchise partners operate nearly 50 hotels,” Hilton stated in comments it provided to this news organization.
The iconic hotel operator said it still views the Bay Area as a market that offers plenty of opportunities.
“We remain committed to doing our part to drive business, tourism and growth across the Bay Area and California,” Hilton stated in the WARN letter.
Nevertheless, larger business-oriented hotels such as those in San Francisco, Oakland and San Jose still must combat problems due to a lack of business travelers and the woes with the region’s office hubs, in Reay’s view.
“The office market is still depressed, people are still working remotely, and there has been a major drop off 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.”