The damage done to travel due to Covid-19 is enormous. In fact, the travel industry is projected to lose $2 trillion in revenue in 2020, and now, 8,000 U.S. hotels may be closing soon due to Covid-19.
We’re already seeing Covid-19’s significant effects with U.S. airlines, which are predicted to lose up to $252 billion in revenue. Hotels are a different story, and the devastation can be bleak. While airlines can be protected by the government with a $25 billion bailout and partnerships (like JetBlue and American) can help, hotels can simply shutter. Because 8,000 hotels in the U.S. may be closing soon due to Covid-19, there needs to be more initiatives to protect them.Lakeside View at Ritz-Carlton Chicago.
American Hotel and Lodging Association came up with the grim statistic that 8,000 hotels could close by September 2020 if business travel doesn’t pick up and funding from the Paycheck Protection Program runs out.
Occupancy at hotels continue to decline versus this time last year (almost 50%). AHLA also reports $16.8 billion in state and local tax revenue from hotels. In 2018, tax revenue for states and local government amounted to $40 billion.
What does the hotel industry need to survive and prevent 8,000 hotels from closing due to Covid-19?
Congress needs to provide additional liquidity for severely impacted businesses through a targeted extension of the Paycheck Protection Program (PPP), create hotel industry relief opportunities utilizing Federal Reserve and Treasury authority, and establish a Commercial Mortgage Backed Securities (CMBS) market relief fund, with a specific focus on the hotel industry, as part of the Federal Reserve’s lending options, according to AHLA.
In NYC, Times Square Edition, a five-star hotel, already shuttered due to Covid-19, and it was followed by Omni Berkshire Place, Hilton Westchester and W New York Downtown. In April 2020, occupancy rates in NYC were hovering at 30 percent.
Nine out of 10 hotel staff were laid off or furloughed in May 2020.
American Hotel & Lodging Association (AHLA) provided a “Safe Stay Guest Checklist” for both hotels to ensure safe guest experiences nationwide.
- Require face coverings in all indoor public spaces and practice social distancing in all common areas.
- Choose contactless options, where available, including online reservations, check-ins, and payments.
- Consider daily room cleaning, only if necessary. Ask the hotel about your options.
- Request contactless room service delivery.
- Refrain from traveling if you have, or recently had, any symptoms of COVID-19 or contact with anyone diagnosed with COVID-19.
The industry-wide set of health and safety protocols are designed to provide a safe and clean environment for hotel guests and employees.
How 11 major hotel chains have responded to the coronavirus pandemic.
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