According to the American Hotel & Lodging Association (AHLA), 40% of hotel employees in the US have not returned to work, while 65% of hotels remain below 50% occupancy. These are two of the findings from the AHLA’s recent survey that compared the current state of the industry in terms of employment, consumer travel sentiment, occupancy and industry trends to the immediate impact of the pandemic in March and April 2020.
The report outlines five key issues facing the hotel industry today:
- Four out of 10 hotel employees are still not working: At the peak of the pandemic, nearly 9 in 10 hotels had to lay off or furlough workers, and the hospitality and leisure industry lost 7.5 million jobs. Despite small gains in employment in May and June driven largely by restaurants and bars reopening, the leisure and hospitality sector is still down 4.3 million jobs since February. The accommodations sector is left with a devastating unemployment rate of 38% compared to the national average of 10.2%.
- Almost two-thirds (65%) of hotels remain at or below 50% cccupancy. That’s below the threshold at which most hotels can break-even and pay debt. While leisure travelers have increased average hotel occupancy since the historic low of 24.5% in April, thousands of hotels are at risk of closure or are unable to hire back staff due to continuing, drastically low hotel occupancy rates.
- Consumer travel Remains at an all-time low: Only 33% of Americans say they have traveled overnight for leisure or vacation since March, and only 38% say they are likely to do so by the end of the year.
- Industry’s leading employers – urban hotels – face collapse with cripplingly low occupancies: Urban hotels are major employers due to their size. But these properties are faring significantly worse than the national average, with an occupancy rate of just 38%. Jobs at urban hotels are unlikely to return without either a dramatic increase in occupancy – which is unlikely – or additional Congressional action.
- COVID’s impact on hotel industry felt in major cities across the country: COVID has left hotels in major cities across the country struggling to stay in business, resulting in massive job loss and dramatically reducing state and local tax revenue for 2020 and beyond.