Hotel Industry Struggles As Pandemic Drags On

The pandemic has hit some sectors of the economy particularly hard, among them the travel industry. A survey by the American Hotel & Lodging Association (AHLA) found that hotel managers expect, with travel restrictions and U.S. consumers’ unwillingness to travel, that their industry will continue to face devastation and significant job loss without additional relief from Congress.

AHLA found that 71 percent of hoteliers say they won’t make it another six months without further federal assistance given current and projected travel demand, and 77 percent of hotels report they will be forced to lay off more workers. Without further government assistance, such as a second Paycheck Protection Program loan or expansion of the Main Street Lending Program, nearly half (47 percent) of respondents indicated they would be forced to close hotels. More than one-third of hotels will be facing bankruptcy or be forced to sell by the end of 2020.

Chip Rogers, president and CEO of AHLA, urged Congress to move quickly during the lame duck session to pass additional relief measures.

“Every hour Congress doesn’t act hotels lose 400 jobs,” says Rogers. “As devastated industries like ours desperately wait for Congress to come together to pass another round of COVID-19 relief legislation, hotels continue to face record devastation. Without action from Congress, half of U.S. hotels could close with massive layoffs in the next six months.”

Rogers adds, “With a significant drop in travel demand and seven in 10 Americans not expected to travel over the holidays, hotels will face a difficult winter. We need Congress to prioritize the industries and employees most affected by the crisis. A relief bill would be a critical lifeline for our industry to help us retain and rehire the people who power our industry, our communities and our economy.”

AHLA’s survey, conducted in November, found that already, 63 percent of hotels are operating with less than half of their typical, pre-crisis staff working full time. Hotel operators told the AHLA that 82 percent of them have been unable to obtain additional debt relief, such as forbearance, from their lenders beyond the end of this year, and 59 percent of hotel owners said that they are in danger of foreclosure by their commercial real estate debt lenders due to COVID-19, a 10-percent increase since September.

A recent national consumer survey commissioned by AHLA shows that many Americans are not expected to travel this holiday season. Seventy-two percent of Americans said they were unlikely to travel for Thanksgiving and 69 percent were unlikely to travel for Christmas. Meanwhile, business and group travel are not expected to return to peak 2019 levels until 2023, compounding the challenges for the hotel industry during this public health crisis.

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