Hotels, among the first businesses hit by COVID-19, are still less than half full
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The pandemic economy has been particularly brutal for hotel chains
Earlier this week, Wyndham Hotels reported it lost $174 million in the second quarter — it made $26 million in profit the same time last year. Next week we’ll find out how Hyatt, Loews and Hilton have fared. Marriott reports the following week. The major hotel chains have laid off staff as bookings have tanked.
The hotel business was among the first to feel the pain, as travelers canceled trips and people stopped going out to eat, drink and get spa treatments — pretty much anything you can do at a nice hotel.
“We hit bottom in April, of about 20% occupancy levels, which is something that the industry’s never even come close to seeing before,” said Chip Rogers, president of the American Hotel and Lodging Association.
Rogers said that as states reopened their economies in May and June, bookings started to rise again. But then, COVID-19 cases surged and occupancy stalled.
“It has leveled off in the mid- to upper-40% [range] since that point, and we don’t seem to be moving any further,” Rogers said.
In the peak summer season, hotels are usually at least 80% full. Rogers said revenues are down, but hotels still need to pay their commercial real estate loans on time.
“We’re seeing a significant amount of delinquencies,” he said. “As we move into the fall, when people stop taking vacations, if there’s no significant increase in business activity, you’re going to see a lot of those hotels fall into foreclosure.”
Since the pandemic started, about 1 in 3 hotel workers have been laid off and not called back, said Nick Bunker at the Indeed Hiring Lab. And new job openings are few and far between.
“Job postings for hospitality and tourism are about 50% below last year,” Bunker said. “It’s still absolutely depressed.”
The industry is pressing for more financial help from Congress. The other hope for the travel industry is to get the pandemic under control.
Victoria Sakal at Morning Consult said that right now, with the recent spike in cases, “people of course are getting nervous about leaving their homes. And this can affect everything from going to a shopping mall, as well as bigger traditional discretionary activities like going on vacation.”
Sakal said consumers are less comfortable going out and spending now than they were back in June.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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