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Hotel industry struggling during the pandemic

Andy Uhler Sep 7, 2020
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A worker wipes down ropes near the reception of a reopened Las Vegas hotel. Even as hotels reopen, two-thirds remain at less than 50% occupancy. Ethan Miller/Getty Images
COVID-19

Hotel industry struggling during the pandemic

Andy Uhler Sep 7, 2020
Heard on:
A worker wipes down ropes near the reception of a reopened Las Vegas hotel. Even as hotels reopen, two-thirds remain at less than 50% occupancy. Ethan Miller/Getty Images
HTML EMBED:
COPY

Kevin King lives with his wife and three children outside of Buffalo, New York. He was hoping to get out of town for Labor Day before his oldest starts kindergarten on Wednesday. 

“We looked at hotel prices, and hotel prices looked good, but we just couldn’t pull the trigger,” King said. “We didn’t feel comfortable in a hotel.”

He knows hotels are cleaning more and trying to limit contact between guests and employees, but they can only do so much.

“Hallways and elevators are the things that scared us the most. I’m not sure how you socially distance when someone’s coming down the hallway,” he said.

The American Hotel & Lodging Association released a report outlining the current state of the industry as the pandemic continues to depress demand. 

Four in 10 hotel employees are still not working and two-thirds of hotels remain at less than 50% occupancy. 

“All hotels lost, but the hotels that have done the least worst are those basic drive-in, drive-out, get-out-of-here hotels,” said Michael Noel, professor of economics at Texas Tech University.

There’s also a lot less business travel these days, so hotels aren’t getting that revenue, either. 

Chip Rogers, CEO of the American Hotel & Lodging Association, said hotel workers are paying the price.

“It’s those large urban centers with so many employees that are being hit the worst and with their occupancy levels down in the 30s in revenue drops of 70%,” Rogers said. “That’s why you’re seeing such massive job loss.”

One positive — if there is one right now for the hotel industry — is that if many people can work from anywhere, that means they can also work from hotels. 

That’s the idea behind the new hotel booking platform HotelsByDay.

“We now have over 40 million new users that potentially could be using hotel rooms for the day,” said Yannis Moati, the company’s CEO.

The idea is to monetize every part of the hotel, so users can book a meeting room, a gym pass or even a spot at the pool for a day.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

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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