The COVID-19 pandemic has had a devastating impact on the entire travel industry but a new report finds the hotel industry in New Jersey is on the brink of collapse.
A survey of hotel industry owners, operators and employees conducted for the American Hotel & Lodging Association finds 68% of hotels have less than half of their normal staff working full-time; 74% say more layoffs are planned; and half of hotel owners report they are in danger of foreclosure.
The report also finds two thirds of hotels will only be able to last six months before they go out of business if Congress does not pass a new assistance package soon.
A closed hotel is also a major hit to local property taxpayers because municipalities levy special taxes on hotels.
AHLA president and CEO Chip Rogers said when we look at jobs in hotels and jobs that are supported by the hotel industry, New Jersey has seen 45,000 positions lost this year.
“If there is no change in current economic trajectory and no assistance from Congress, we expect by the end of next year it’ll be another 88,000 jobs that will be lost in New Jersey alone,” he said.
The report notes the total number of pre-COVID jobs supported by the hotel industry in the Garden State was 197,058
Rogers said the total number of hotels in New Jersey is slightly more than a thousand but “we believe that if there is absolutely no help from Congress you’re going to have about 500 of those hotels get foreclosed upon, and then about 700 would ultimately go out of business.”
He noted when a hotel closes and jobs are lost, it can take years for a new hotel enterprise to take its place.
“First, you have to have the demand. But the investment necessary to reopen a hotel is much greater than just continuing operations,” he said.
The report finds nationally, 38,000 out of 57,000 hotels may be forced to close if they do not receive federal funding assistance.
You can contact reporter David Matthau at [email protected]