As I See It- Corona virus hits the hotel industry big time!

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By Elpidio R. Estioko

If there is a group of people in the tourism industry that are impacted most by the corona virus, it is the employees and staff of the hotel and lodging inns!

The back page of the Hotel Business September 15, 2020 edition magazine reported that: “Travel supports 15.8 million American jobs in total, employing 1 out of 10 Americans. 2019 travel generated $2.6 trillion for the US economy. The local impact is 70 percent to local communities (in traveler related spending) in transportation, food and beverage (retail), The failure of our (National) hotels can (and will) have a massive ripple effect on our country’s economy.”

Benjie Fernandez, hotel manager, Hilton Garden Inn said: “Since the COVID-19 pandemic hits the travel industry, the hotel suffered the most as travelers no longer spend the night or two to attend meetings and conferences.  Most of the hotels, if not all, closed their operations temporarily resulting to furloughing their employees and later got laid off permanently.”

The pandemic hit the industry so much that they must lay off their employees and stop contributing to their insurance coverages and other benefits, a heavy blow to the employees.

“My very own hotel, the Hilton Garden Inn, furloughed 90% of our workforce as the hotel run only a single digit occupancy for the first 5 months during COVID-19.  Because of this, we had no choice but to let all our hourly employees go in the promise that they will be called when the business gets back to normal.  As a result, they lost their insurance coverages as hotel operators can no longer sustain or continue their coverages after the 90 day period,” he added.

Then he concluded the conversation by saying: “Personally, it will take a while to recover as many business working at home.  Not even next year, I would say in 2022 or 2023.”

As I observed the latest development with many states still surging positive of the virus, Fernandez’s observation might be true! The pandemic is still with us and is not moving away, contrary to US President Donald Trump’s view. There is no indication that it will fade away soon!

Hotels, inns and lodgings are part of the hospitality industry which is very much impacted by the COVID-19 pandemic, according to Sean Skettle in his article “COVID-19 Pandemic Impact Report for the Hospitality Industry by Grey Hospitality.” Skettle is a principal consultant at Grey Hospitality.

According to the Hotel Business Magazine’s September 15, 2020 issue, “… the lodging industry is estimated to report a 50 percent nearly $125 billion-dollar loss in 2020 making this year the worst year in history for the hotel industry, just the hotels  and not travel overall. Oxford also reported that this will equate to a total loss of $910 billion in travel related economic out =put in 2020, This is seven times the impact of 9/11.”

There is a heavy impact on hotels and lodging inns. According to the American Hotel and Lodging Industry State of the Hotel Industry Analysis dated August 31, 2020, nearly 5 out of 10 employees are still not working and the industry sector is down 4.3 million jobs; 65 per cent  of remain at or below 50 per cent occupancy; only 33 per cent of Americans say they have traveled overnight for leisure  or vacation since March of 2020 and only 38 percent  say they are likely to travel by the end  of the year.”

And… based on the latest data from STR, compared to August 2019, occupancy was down 31.7 percent, average daily rate was down 22.8 percent to $102.46 and revenue per available room was down 47.3 percent to $49.83.

The report farther said that “among the top 25 markets, Oahu Island in Hawaii experienced the steepest drop in occupancy, down 69.9 percent to 26.8 percent, and the largest decrease in RevPAR-down 81.4 percent to $42.13. San Francisco/San Mateo in California posted the steepest decline in ADR, down 50.1 percent to $123.23.”

The American Hotel and Lodging Association (AHLA) also reported that: “As of July 30th, more than half open hotel rooms were empty across the country per STR. This is in addition to the thousands of hotels shuttered completely. Since the public health issue began escalating in mid-February in the U.S., hotels have already lost more than $46 billion in room revenue.  Individual hotels and major operators are projecting occupancies below 20%. At an occupancy rate of 35% or lower, hotels may simply close their doors, putting 33,000 small business at immediate risk.

Overall, it is predicted that the world economy, despite taking a severe blow, will be back in a positive direction in a year’s time and will take around three years to completely overcome the losses the lodging industry, restaurant industry and the individual traveler accrued during this pandemic of 2020.

So, based on these data. Hotel manager Benjie Fernandez is right by saying, “Personally, it will take a while to recover as many businesses working at home.  Not even next year, I would say in 2022 or 2023!”

(Elpidio R. Estioko was a veteran journalist in the Philippines and an award-winning journalist here in the US. For feedbacks, comments… please email the author at estiokoelpidio@gmail.com).

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