Advocates for the nation’s hotel and lodging industry expressed dire concerns on Tuesday about the state of their business amid COVID-19, with several representatives saying immediate help from the federal government is needed to stave off hotel closures and job losses in the coming weeks and months.
During a press conference involving media members from around the country, representatives from the American Hotel & Lodging Association called on members of Congress to take swift action on another round of stimulus for hotel owners who are facing one of the most difficult off-seasons in decades.
“The industry is on life support and without this final piece to help us get off life support there will be thousands and thousands of more jobs lost,” said Carol Dover, president and CEO of the Florida Restaurant and Lodging Association.
Representatives from the nationwide hotel association said a member survey conducted between Sept. 14 and 16 found that if Congress fails to pass another COVID stimulus bill, 74 percent of hotels would be forced to lay off additional employees, and two-thirds of hotels, or 67%, would not make it another six months. According to the association, prior to the pandemic, hotels supported more than 8.3 million in America, representing 1 in ever 25 positions across the country.
Chip Rogers, president and CEO of the American Hotel & Lodging Association, called on federal lawmakers to “put politics aside” and prioritize assistance for Americans who work in the hotel industry, which has been particularly hard hit by the economic fallout from the global pandemic.
While Congressional leaders have for weeks now failed to come to terms on a second round of COVID-19 relief, Rogers said the hotel industry could benefit from funds that are still left over from the initial stimulus package approved by Congress earlier this year.
Rogers said there’s roughly $150 billion in funds available under the Payroll Protection Plan that was not appropriated largely due to restrictions related to borrowing. Those funds, he said, could be redirected to assist hotel owners, many of whom did use PPP funds to shore up operations this spring.
“It only seems reasonable to direct that to the businesses that have been hurt the most,” he said.
Failing that, Rogers said Congress could also tap into funds tied to the Main Street Lending Act, a half-a-trillion-dollar program which was approved earlier this year in an effort to leverage additional investment by small and medium-sized business owners. While well-intended, Rogers said the bulk of the funds were not lent out as originally intended and could, with Congressional approval, be geared to supporting hotel operators as the lean winter months approach.
Rogers and other hotel industry executives noted that hospitality operations serve as significant sources of revenue for host municipalities which rely on them for sales and bed taxes and other sources of funding.
“Hotels are cornerstones of the communities they serve, building strong local economies and supporting millions of jobs,” Rogers said. “Thousands of hotels across America are in jeopardy of closing forever, and that will have a ripple effect throughout our communities for years to come. It is imperative that Congress act now before leaving town, or thousands of small businesses and the jobs associated with them will be lost. The American people cannot wait for relief. Congress needs to act now.”
Pre-COVID and September 2020 jobs loss figures presented by the Association, as per an analysis by Oxford Economics, showed New York having a total of 112,897 hotel jobs prior to the pandemic. Numbers included in the association’s latest analysis predict a loss of 43,014 direct hotel jobs in September, with the number estimated to increase to more than 79,000 without aid from the federal government.
The Association’s research indicates that, prior to the pandemic, there were 2,336 hotels in New York. The group believes 1,565 of those properties will be forced to close without some sort of federal support.
Lynn Mohrfeld, president and CEO of the California Hotel and Lodging Association, said the hotel industry in his state lost 108,000 jobs as of September as second quarter operations were greatly impacted by travel restrictions related to the pandemic and, more recently, a rash of damaging wildfires out west.
Mohrfeld said, so far, about 6,000 hotel properties have either closed or have been foreclosed upon in California and he predicted the state’s job loss numbers tied to the hotel industry could double by year’s end without some sort of federal relief.
“It’s almost unfathomable to think we haven’t experienced the worst yet,” he said.
Andrea Czopp, vice president of operations for Destination Niagara USA – Niagara County’s lead tourism agency – said the local hotel industry has fared better this summer than many other destinations across the country.
She said the local hotel occupancy rate in the Falls for the month of August was 60.3%, which was 24% higher than the national average. Each Saturday in August, she said the Falls area saw at least 80% occupancy or better while the national average on Saturdays in August was around 60%.
Over the Labor Day weekend, the local occupancy rate hit 96%, according to Destination Niagara, which the agency said was 25% higher than the national average. For the Sunday of Labor Day weekend, local hotel occupancy was 91%, 60% higher than the national average.
Czopp said industry research shows most travelers remain comfortable with taking vacations within a maximum of six-to-eight-hour drive from their homes and that they favor destinations, like Niagara Falls and Niagara County, that offer ample options for spending time outdoors and at a safe distance from others. Czopp noted that Destination Niagara started a heavy digital marketing push to drive markets in late June and early July and said the agency is continuing to focus its marketing in that direction.
“We are continuing to focus our marketing efforts on the drive market into the fall with specific messages for each of our target audiences,” she said.