Leading hotel CEOs met with the White House to discuss urgent economic recovery solutions needed to protect millions of U.S. hotel employees and 33,000 small businesses as travel grinds to a virtual halt across the country. From Main Street to major cities across the country, hotels everywhere are on the verge of shutting their doors in the coming days – many by the end of this week. With 1 in 25 jobs directly supported by the hotel industry, the rapid pace of booking cancellations is having an immediate, negative ripple effect that risks seeing mom and pop hotel owners shutter, furlough their employees, hurting community businesses.
The hotel industry is an industry of people and the current human toll is proving to be catastrophic. Based on current occupancy estimates, the American Hotel & Lodging Association (AHLA) says four million total jobs have been eliminated already or are on the verge of being lost in the next few weeks. In certain affected markets, including Seattle, San Francisco, Austin and Boston, hotel occupancy rates are already down below 20 percent and individual hotels and major operators have already shut down operations.
Chip Rogers, AHLA President and CEO, said the burgeoning COVID-19 health crisis is unprecedented in its size and scope, and it represents the single largest decline in travel in modern times.
“The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the great recession of 2008 combined,” stated Rogers. “The White House and Congress can take urgent action to protect countless jobs, provide relief to our dedicated and hardworking employees, and ensure that our small business operators and franchise owners – who represent more than half of hotels in the country – can keep their doors open.”
“Pebblebrook Hotel Trust is a REIT with 54 hotels with over 13,000 rooms and over 8,000 employees around the country. Our hotels are in most of the hardest-hit cities – Seattle, San Francisco, here in Washington, DC, NYC, Boston, Chicago and more. As of today, we have had to make the difficult decision to let go over 4,000 employees,” noted Jon Bortz, Board Chair, AHLA and Chairman & CEO, Pebblebrook Hotel Trust. “By the end of the month, we expect another 2,000 employees will also be let go, representing over three-quarters of our employees. We are looking at closing the doors at more than half of our properties. This is the reality we, and countless other owners and operators around the country are facing in the wake of this public health situation.”
According to an Oxford Economic Study, a 30 percent decline in hotel guest occupancy could result in the loss of nearly 4 million jobs, with $180 billion of wages and a $300 billion hit to the GDP – crippling the hotel industry, the local communities they serve and the U.S. economy.
Top hotel industry leaders laid out several immediate actions the White House and Congress could take to help the hotel industry protect jobs and help small business operators. The group focused on two critical goals – retaining and rehiring employees and keeping hotels from shutting down through access to liquidity and low-interest loans, including for small businesses.
Hotel CEOs who participated in the roundtable discussion today at the White House were hopeful that President Trump and Members of Congress will work together urgently to provide relief and ensure the industry is positioned to rebound from the unprecedented impact from the Coronavirus pandemic.
“This unprecedented public health crisis has quickly become a catastrophic economic crisis as well,” said Roger Dow, President and CEO, U.S. Travel Association President. “The losses for the travel industry alone are projected to double the unemployment rate over the next two months and plunge the country into recession. Small businesses, which make up 83% of travel businesses, need relief right now if they’re going to be able to keep paying their employees.”
The Oxford study estimates the hotel industry supports 1 in 25 American jobs, totaling 8.3 million jobs, paying more than $97 billion in wages and salary income, and contributes nearly $660 billion to the U.S. GDP annually. In addition to major hotel brands, the hotel industry includes more than 33,000 small businesses, which represent 61 percent of hotel properties in the U.S.