Visit Buffalo Niagara President Patrick Kaler said he was very surprised Hyatt announced it would end its affiliation with the Hyatt Regency at Fountain Plaza effective June 1.

Kaler said he immediately reached out to the Snyder Corporation that owns the property.

"They felt that the release was very premature, that they were still working on a solution with Hyatt Corporation," he said.

Hyatt did not provide a specific reason for the decision but did say the hotel suspended operation April 1 because of the coronavirus. Kaler said hotel occupancy in general is down significantly and likely won't bounce back fully until 2022.

"The great thing about the tourism industry is that it's very resilient," he said.

This comes as downtown's other largest hotel says its reducing its hotel occupancy by about half. A multimillion-dollar renovation will convert the rest of the rooms at the Buffalo Grand into apartments.

Economist Fred Floss said it makes sense.

"There's only so much room and so many beds that are needed in Western New York and as we've added additional beds, we may have saturated the market," Floss said.

However, Floss also believes the issues at the Hyatt Regency are not necessarily just because of over-saturation or the pandemic

"I think a bigger concern is the question of whether or not they can afford their debt load and that was a problem before COVID," he said.

Snyder Corporation did not immediately return a request for comment. Floss believes the ownership group can continue to operate the hotel.

"Just because they've lost their brand doesn't mean that they won't continue as an ongoing entity," he said.

Kaler said it's important that hotel have a national brand associated with it because of its central location and frequent use by business travelers that utilize rewards programs.

"Those branded properties do have a lot of cache and a lot of following with their customer base and so to ensure that the property remains flagged, if it not a Hyatt then another property, will be very critical and important to the success of our overall downtown tourism," he said.

The property is also specifically important to Visit Buffalo Niagara because it is connected to the convention center. While convention business remains on hold, Kaler said the center has been able to rebook many of its events.

"When you have that number of hotel rooms attached to the convention center, it's very important," he said.

Meanwhile, Kaler said the county was on a positive track toward building a new downtown convention center before the coronavirus outbreak. While hotel capacity will be important to that process, he says everything is on hold right now because the project was reliant on state and local funding which is now, of course, much less available.