Hotels continue to face fixed costs and low occupancy rates
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The hotel industry has struggled since the outset of the pandemic and is still trying to survive with limited tourism and international travel.
There have been some signs of life in the hotel industry, said Lynn Mohrfeld, who runs the California Hotel & Lodging Association.
Mostly near outdoorsy areas in the state.
“Since air travel is not quite back yet, most people are jumping in their cars,” Mohrfeld said.
Hotels in urban areas have been struggling. The American Hotel & Lodging Association says occupancy rates in many cities are half of what they were last year or worse.
One reason? Mohrfeld says corporate conferences aren’t happening this fall.
“It’s going to be difficult to hold over across November, December, January, which are traditionally the slower months,” she said.
Hotels have high fixed costs. Owners often buy their properties and take out mortgages. Vijay Dandapani, president and CEO of the Hotel Association of New York City, said paying back that debt is tough now.
“When you don’t have money for such an extended period of time, you’re going to just lose the ability to remain solvent,” he said.
Dandapani said roughly 30% of hotels in New York City are likely to go out of business.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
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.