Labor Day weekend hotel bookings are down 66% compared to 2019, 40% of hotel employees are still out of work and 65% of properties are operating below 50% occupancy, the breakeven point for hotels.
Six months into the coronavirus pandemic, that’s the dire news released by the American Hotel & Lodging Association (AHLA) in its recent “State of the Hotel Industry” report. Americans are not traveling much for business or pleasure and it looks like that trend will continue through 2020.
Consumer travel remains at an all-time low, with only 33% of Americans saying they have traveled overnight for leisure or vacation since March. Additionally, only 38% say they are likely to travel by the end of the year.
Hotel bookings reflect those stats, especially in urban markets. Hotels in major cities have a 38% occupancy rate, lower than the national average, resulting in widespread unemployment among hospitality workers and a reduction in state and local tax revenue. Some properties are at risk of permanently closing their doors.
“We are incredibly worried about the fall and what the drop in demand will mean for the industry and the millions of employees we have been unable to bring back,” Chip Rogers, president and CEO of AHLA said in a statement. “The job loss will be devastating to our industry, our communities and the overall American economy.”
Like the restaurant industry, the hotel industry is urging Congress to act quickly with a meaningful relief package, specifically an extension of the Paycheck Protection Program that’s targeted to hotels. The AHLA is also recommending the establishment of a commercial mortgage-backed securities market relief fund and changes in the Main Street Lending Facility to ensure that hotel companies can access the program.
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