Surviving coronavirus as a small business: Rachael Solem of Irving House at Harvard
In a time of lockdown and travel restrictions, it is hard to imagine many businesses affected more harshly by the coronavirus epidemic than hotel and guesthouse owners.
At least, this has been true for Rachael Solem, who (with partners) owns three guesthouses in Cambridge: Irving House, Turner House and Harding House. Managed by Solem, Irving House at Harvard, at 24 Irving St., Mid-Cambridge, has operated as a small hotel for almost 30 years. Up the block, Turner House is generally occupied by longer-stay guests who enjoy weekly housekeeping services. Harding House, on Harvard Street closer to Central Square, is a separate corporation, and functions as an inn.
In early March, Solem’s bookings started to take significant hits as a result of the epidemic, just as she was coming out of the slow season and anticipating a boom of spring and summer visitors – typically including commencement bookings for Harvard graduates and their families.
“We were getting cancellations from all over [and] all these deposits had to be returned. So in addition to seeing our future revenues disappear by the hour, we saw dollars leaving our operating accounts too,” Solem said.
In the past four months, Solem said, she and her partners have lost $200,000 in refunded deposits.
Like other business owners in Cambridge, Solem applied for government financial assistance.
“I applied for every possible financial assistance and got all of them: [Economic Injury Disaster and Paycheck Protection Program] loans for each company, a moratorium on mortgage payments from our bank, a delay in property tax payments and room occupancy tax payments,” she said. With these grants, and with Turner House retaining long-term guests, Solem had been “chugging along” when the governor announced June 8 that hotels could reopen for short-term stays.
Guests don’t get it
Short-term visitors, however, have not been a perfect solution.
The “trickle of guests” have booked mainly through third parties such as Expedia and Booking – a problem plaguing small hotel owners before the coronavirus pandemic, though the impact has worsened, she said.
“The bigger problem with the guests who come through this stream is that they don’t care about the details of the kind of property we are, assume we have room service, or breakfast, and they don’t wear masks or follow our suggestions for guest behavior that keep us all safe,” Solem said. “While this is distressing and very expensive, we have no choice if we are to be in the market at all.”
While Irving House has been open for about a month, there are still no plans to reopen Harding House, and Solem worries about a development from a peer in the Agassiz neighborhood: “The Mary Prentiss Inn has been put on the market.” (The 20-room boutique hotel remains open for business despite a coronavirus-induced lag in reservations, though, and a manager said a “seamless transition” to a new owner is the goal.)
Forced into fewer guests
The new way of operating cuts into revenue.
Adopting suggestions made by the Association of Lodging Professionals and the American Hotel & Lodging Association, Irving House is not serving food yet and “offering only rooms with private baths, so can never be more than 75 percent occupied. We also leave a room empty with the window open for two days after each checkout,” Solem said. “That reduces occupancy caps as well.”
For business to return to normal, Solem will need a “steady population of guests who know how to behave in safe and healthy ways.” She and her partners are considering a variety of approaches, including leasing to single entities such as Harvard or the Massachusetts Institute of Technology for their out-of-town clients or staff. Another solution could be renting to more long-term guests.
For Solem, and likely others in the hotel industry, recovery is now largely a waiting game.
“We are depending on the demand generated by a traveling public that would feel safe taking a plane, or a train or a bus, or driving, and staying in a different place … The only way I see people feeling safe about traveling is for there to be treatment, or, better, a vaccine. Until that time, we are all operating in the dark,” Solem said, “in fear.”
This series was done in partnership with the nonprofit small-business network Cambridge Local First.