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Hotel operators forecast bleak prospects as COVID-19 surges

Andy Uhler Nov 19, 2020
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A closed hotel is seen in April in New York City. Stephanie Keith/Getty Images
COVID-19

Hotel operators forecast bleak prospects as COVID-19 surges

Andy Uhler Nov 19, 2020
Heard on:
A closed hotel is seen in April in New York City. Stephanie Keith/Getty Images
HTML EMBED:
COPY

A survey by the American Hotel & Lodging Association of its members found that seven in 10 say they won’t make it another six months without further federal assistance given projected travel demand.

Even more hotel operators said they’ll be forced to lay off more workers. And the holidays, usually a busy time for hotels, won’t help this year as many families stay put with COVID-19 continuing to surge.

Back in February, Brent Underwood was getting ready for South by Southwest in Austin. He owns a 20-bed hostel there and was booked solid. Then, COVID-19 hit and he suspended operations.

“Effectively, we are out of business,” he said. “The business has been shut down; the property is for sale.”

It’s not just mom-and-pop hotels feeling the crunch. The Marriotts and Hiltons of the world operate some hotels, but they also franchise out a lot of them to independent owners.

Alex Susskind at Cornell said as in most sectors, “the larger companies are probably in a little bit better shape than some of the smaller ones.”

He said there’s likely to be some consolidation of property as a result of the pandemic.

Still, Michael Noel at Texas Tech University said eventually, boutique hotels will rebound.

“There will be a time where that hotel will reopen, because the demand is going to come back,” Noel said. “But not every business owner is going to survive and be able to raise the capital to start it up again.”

But he said nothing will get back to normal in the hotel industry until COVID-19 is under control.

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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