Impact of COVID-19 on the US Hotel Industry by State

Impact of COVID-19 on the US Hotel Industry by State

The American Hotel & Lodging Association is raising the panic button today about the expected job loss and the collapse of the hospitality sector in the United States, due to coronavirus



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The hotel industry is facing an abrupt and unprecedented drop in hotel demand that is gaining pace and getting progressively deeper and more severe week by week. AHLA and top hotel CEOs met with President Trump and Congress this week to seek urgent assistance to keep hotels from shuttering, protect millions of employees from losing jobs.

Based on current occupancy estimates, the American Hotel & Lodging Association (AHLA) says four million total jobs have been eliminated already or are on the verge of being lost in the next few weeks. In certain affected markets, including Seattle, San Francisco, Austin and Boston, hotel occupancy rates are already down below 20 percent and individual hotels and major operators have already shut down operations.

Chip Rogers, AHLA president and CEO said: “The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the great recession of 2008 combined,” stated Rogers. “The White House and Congress can take urgent action to protect countless jobs, provide relief to our dedicated and hardworking employees, and ensure that our small business operators and franchise owners – who represent more than half of hotels in the country – can keep their doors open.”

The impact on the local economy is more relevant in regions where the travel and tourism industry is relevant to the overall economy. Hawaii is one of the most fragile states in this regard as an example.

44% of hotel employees in every state are projected to have lost their jobs in the coming weeks.

he hotel industry is an industry of people and the current human toll is proving to be catastrophic. Based on current occupancy estimates, the American Hotel & Lodging Association (AHLA) says four million total jobs have been eliminated already or are on the verge of being lost in the next few weeks. In certain affected markets, including Seattle, San Francisco, Austin and Boston, hotel occupancy rates are already down below 20 percent and individual hotels and major operators have already shut down operations. 
 
Chip Rogers, AHLA president and CEO, said the burgeoning COVID-19 health crisis is unprecedented in its size and scope, and it represents the single largest decline in travel in modern times.
 
“The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the great recession of 2008 combined,” stated Rogers. “The White House and Congress can take urgent action to protect countless jobs, provide relief to our dedicated and hardworking employees, and ensure that our small business operators and franchise owners – who represent more than half of hotels in the country – can keep their doors open.”
 
“Pebblebrook Hotel Trust is a REIT with 54 hotels with over 13,000 rooms and over 8,000 employees around the country. Our hotels are in most of the hardest-hit cities – Seattle, San Francisco, here in Washington, DC, NYC, Boston, Chicago and more. As of today, we have had to make the difficult decision to let go of over 4,000 employees,” noted Jon Bortz, Board Chair, AHLA, and Chairman & CEO, Pebblebrook Hotel Trust. “By the end of the month, we expect another 2,000 employees will also be let go, representing over three-quarters of our employees. We are looking at closing the doors at more than half of our properties. This is the reality we, and countless other owners and operators around the country are facing in the wake of this public health situation.” 
 
According to an Oxford Economics study, a 30 percent decline in hotel guest occupancy could result in the loss of nearly 4 million jobs, with $180 billion of wages and a $300 billion hit to the GDP – crippling the hotel industry, the local communities they serve and the U.S. economy.  
 
Top hotel industry leaders laid out several immediate actions the White House and Congress could take to help the hotel industry protect jobs and help small business operators. The group focused on two critical goals – retaining and rehiring employees and keeping hotels from shutting down through access to liquidity and low-interest loans, including for small businesses. 
 
Hotel CEOs who participated in the roundtable discussion today at the White House were hopeful that President Trump and Members of Congress will work together urgently to provide relief and ensure the industry is positioned to rebound from the unprecedented impact from the Coronavirus pandemic.
 
“This unprecedented public health crisis has quickly become a catastrophic economic crisis as well,” said Roger Dow, President and CEO, U.S. Travel Association. “The losses for the travel industry alone are projected to double the unemployment rate over the next two months and plunge the country into recession. Small businesses, which make up 83 percent of travel businesses, need relief right now if they’re going to be able to keep paying their employees.”
 
The Oxford study estimates the hotel industry supports 1 in 25 American jobs, totaling 8.3 million jobs, paying more than $97 billion in wages and salary income, and contributes nearly $660 billion to the U.S. GDP annually. In addition to major hotel brands, the hotel industry includes more than 33,000 small businesses, which represent 61 percent of hotel properties in the U.S.

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