As universities across the U.S. weigh whether to reopen
campuses for the fall semester, some schools are eyeing the use of hotel
guestrooms as a safer and social distancing-friendly alternative to crowded
dorms.
According to local news reports, Tulane University in New
Orleans and the University of Northern Colorado in Greeley, Colo., are among
those considering hotel rooms for students in need of single-occupancy lodging.
Northern Colorado is also reportedly looking into using hotel conference rooms
as potential classroom space. Likewise, Boston’s Northeastern University has
said it is exploring the use of hotels as the school plans to “expand student
housing into new buildings and communities to reduce residential density.”
Though specifics regarding these plans remain fluid, Nancy
Mitchell, a restructuring partner at the New York office of law firm O’Melveny
& Myers, which is advising higher education clients on risk management
under its colleges and universities practice, said hotels could certainly play
a key role in allowing students to come back to campus safely.
“Colleges and universities have a need for more rooms, fewer
shared bathrooms and less common space,” Mitchell said. “And when we think
about how college towns are set up, we know there tends to be a fair bit of
hotel stock in many areas where these schools are located. Hotels are looking
for ways to conserve cash and address their issues of no to very low occupancy
right now, so we think it’s a natural match.”
It also wouldn’t be the first time colleges have tapped
hotels as student housing, added Mitchell. New York University, for example,
has previously relied on hotels to solve student housing shortages, though such
measures are typically stopgaps. In the case of the Covid-19 pandemic, Mitchell
predicts schools will be more interested in inking longer-term, one- or
two-year lease agreements.
“I think everybody now realizes that this is going to be a
longer-term situation than we maybe originally thought when the shutdown first
happened,” Mitchell said.
Mitchell said potential lease agreements between colleges
and hotels could be modeled after those structured as part of California’s
Project Roomkey, a statewide initiative, helmed by Gov. Gavin Newsom, to
procure hotel and motel rooms to house the homeless during the pandemic. O’Melveny
& Myers negotiated a Project Roomkey transaction with Motel 6, which
resulted in several thousand hotel rooms that are now leased to counties
throughout California.
“What we found was that hotels were very excited to do it,
as it allowed them to keep their properties occupied and keep some of their
employees employed,” Mitchell said. “And importantly, the transaction in
California moved quite quickly. Even with due diligence, we think it could take
less than a month to put similar partnerships in place.”
Being able to move quickly could be vital, as most schools
are facing mounting financial pressure to resume normal campus operations.
“The question of whether or not parents of students are
going to pay the same tuition for an online education as they would an
in-person education is one that I know concerns many colleges and universities
tremendously,” Mitchell said. “And they know that if they’re going to bring
people back and want them to have that in-person experience, then they also
have to keep students safe. Because there is that countervailing risk of
litigation on the other side if you bring people back too quickly.”