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
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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