(Corrected on April 6 to update Red Roof's company name in the sixth paragraph.)

Hotels in college towns have always had a built-in audience from visiting students and their parents, guest lecturers and dignitaries coming to the area, but the COVID-19 pandemic turned everything upside down.

In the past year, that hotel business has dried up as many higher-ed classes have gone virtual. In response to less demand, college town hotels set up programs to house students, some of whom are being quarantined as well as those who need housing while dorms are shut down. A portion of these programs may be winding down as colleges hope to resume normal fall schedules, while others may continue in one form or another.

"Hotels in college towns have historically been stronger performers than hotels in many other markets in the United States, as colleges provide demand on weekdays and weekends for the hotels. The pandemic has caused a major decline in demand, particularly for hotels in college towns where the college has closed," said David Sangree, president of Hotel & Leisure Advisors.

Many hotels have made up for this by housing students, placed in the hotel by the school, to provide better social distancing between roommates. Some colleges that had dormitories which housed three or four people per room are now only allowing one or two people per room, and they are placing the other students in hotel rooms if they are near the campus, Sangree said.

He said he expects demand for college hotels will grow starting in the fall "as social distancing requirements dissipate and colleges can again offer various events that will attract alumni and other visitors who may want to stay overnight in hotels."

Red Roof's Student Support Program, which offers students discounted rates at participating hotels throughout the country, has continued to fare well since its inception in March 2020, said Marina MacDonald, chief marketing officer at the hotel brand company. Students continue to seek safe off-campus housing alternatives, especially as they return to campuses after holidays.

When first introduced, the program included a gift card value-add for long-term guests to help them purchase essential items for their stay. This incentive drove adoption of the program with students who wouldn’t initially think of a hotel as an alternative to campus living.

Compared to other promotions introduced in response to the pandemic, the Student Support Program continues to be a top demand driver, MacDonald said. More recently, the program has offered accommodations to students who need to quarantine or are searching for temporary off-campus options after visiting family.

As colleges and universities finalized their 2021 spring semester plans for proper social distancing in on-campus housing per COVID-19 guidelines, there was a slight reduction in demand from what was experienced during the 2020 fall semester, said Kevin McAteer, senior vice president of marketing and sales at Concord Hospitality.

Most schools that secured agreements for full hotel buyouts in the fall semester, such as The Ohio State University and the University of Pittsburgh, renewed those agreements for the spring.

For instance, OSU contracted with Concord for a hotel buyout of the Marriott Columbus University Area. It provided additional student housing space to meet social distancing requirements.

There also has been a growing number of colleges inquiring about athletic housing for sports, such as spring and summer football camps, McAteer said.

"The need is not for daily housing of the athletes and staff, but to have a reasonable number of secured rooms in a section of a hotel that could be used as a COVID-quarantine dorm area," he said.

One university niche that has started to evolve is the desire to move MBA programs off campus and into a hotel learning environment that can meet the needs of a virtual or hybrid experience, he said.

"This overall guest room block need is significantly lower than what was sourced by schools when the pandemic hit, but over time, we are seeing relocated MBA programs in our full-service hotels driving a combined room/catering/rental revenue, with revenues ranging from $400,000 to $500,000 for an MBA program that runs four to five months," he said.

John Schultzel, chief growth officer for The Olympia Cos., said college-owned hotels might be the only resource for smaller campuses in smaller markets to solve COVID-19-related housing challenges.

"For larger universities, the institution could choose between an owned asset or securing blocks at one of the many privately-owned hotels in the area," he said.

Olympia operates a collection of hotels owned by colleges and universities. In some instances, school officials sought to book blocks of rooms to address COVID-19 situations, such as quarantine needs or sports team isolation, Schultzel said.

The best example of this was at Oberlin College, he said. The school bought out The Hotel at Oberlin completely to house students and used the hotel's event spaces as classrooms. In other cases, the school held hotel rooms for use as necessary.

Olympia’s portfolio also serves many large campuses, such as the University of Virginia, Florida State University, Duke University and University of Chicago, he said.

The University of Virginia was among the most active in securing local hotel inventory to support student needs during COVID-19. These commitments seem to be winding down now, and hotel rooms are coming back to the market, he said.

At the University of Chicago, Olympia donated rooms to front-line workers at the institution's medical center, and then offered discounts to medical travelers. This helped sustain the hotel during the downturn, Schultzel said.

He said the pandemic affected campus hotel performance significantly, but Olympia's "ability to pivot quickly to related college and university segments eased the suffering with year-over-year declines being limited to 40% to 50%, as opposed to 60% or more," he said.

"With some campuses hosting smaller or split commencement activities in 2021, we are feeling optimistic about our campus portfolio and look forward to a more rapid return to pre-COVID levels when students come back after the summer," he said.