COVID-19

Hotel industry struggling during the pandemic

Andy Uhler Sep 7, 2020
Heard on: Marketplace
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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
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:
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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

Are people still waiting for unemployment payments?

Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.

Are we going to see another wave of grocery store shortages?

Well, public health officials are warning that we could see a second wave of the virus before the end of the year. And this time retailers want to be prepared if there’s high demand for certain products. But they can’t rely totally on predictive modeling. People’s shopping habits have ebbed and flowed depending on the state of COVID-19 cases or lockdowns. So, grocers are going to have to trust their guts.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out Tuesday 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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