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Job One For Lodging Industry

Major Workforce Reductions Underscore Need For Dedicated Relief Package

Wednesday, March 25, 2020
Dennis Nessler
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Further supporting its plea for financial relief from Congress, the AHLA earlier this week revealed that some 44 percent of hotel employees have lost or are projected to be losing their jobs in the coming weeks from the impact of reduced demand as a result of the Coronavirus.

The American Hotel & Lodging Association (AHLA) last week appealed to President Trump and Congress for some $1.5 billion in relief in large part to help save the jobs of hotel workers as well as to keep hotels from closing their doors.

During that conference call, AHLA President and CEO Chip Rogers was asked how he would prioritize and distribute any potential relief funds.
“Undeniably the most important [piece] at this moment are the employees. How do we make sure that they are financially secure moving forward? We delivered that message to the president and he understands the message. There is no desire whatsoever for our industry to furlough people or to lay people off,” he said.

Rogers later went on to add, “the resources that are being requested are to keep hotel employees on the payroll. If they go on unemployment somebody is going to be paying them; the government will be paying them through one mechanism or we will be paying them. To us it makes sense to keep them employed. Let’s get past the health risk as quickly as possible and let’s get these businesses open so the economy goes back to where it was,” he said.

Based on current occupancy estimates, the AHLA says four million total jobs have been eliminated already or are on the verge of being lost in the next few weeks. In certain affected markets, including Seattle, San Francisco, Austin and Boston, hotel occupancy rates are already down below 20 percent and individual hotels and major operators have already shut down operations.

Jon Bortz—Chairman of the AHLA, and Chairman, President and CEO of Pebblebrook Hotel Trust—detailed the urgency involved in getting government funding as soon as possible.

“This can’t happen fast enough; this has occurred so quickly. I can tell you as an owner of hotels around the country that where we thought we were a week ago is dramatically different than today. And as we move to the kinds of occupancy levels that we all heard about in China in the low single digits that’s where we’re going today in order to help solve this health crisis. The need is immediate, folks are being furloughed and laid off every day. Hotels are suspending operations and it will take time to restart operations when we have a recovery. The work force fund is really about retention of employees and it’s about rehiring employees as we have a recovery,” he said.

Rogers was asked specifically to what extent any potential relief funds might be distributed to hotel workers.

“The desire would be to make sure that they are compensated as well as we can. It would be fantastic if an employee can maintain their full salary, if not at least a large portion of it, but we need to make sure those folks are economically viable and get back to work as quickly as possible,” he noted.

As the impact of the Coronavirus has increased, discussion has gained momentum about a potential domestic travel ban. Bortz, for one, noted he wasn’t overly concerned because of the current demand situation but did stress the importance of a decision.

“We don’t have that much demand left at this point. Its impact would be far less than it would be when people were actually traveling. If we have occupancies in the major cities in the single digits, whether you have airlines flying back and forth isn’t going to make much of a difference. I think where it does make a difference is if someone is contemplating travel, the concern is with these rumors about it’s hard to decide to make a trip if you don’t know you can get home. We need an answer one way or another if that’s possible,” he noted.

Roger Dow, president of the U.S. Travel Association, however, did point out a potential impact. “What happens when people travel it’s where sales deals are done, where products are sold, it actually has tentacles through the entire economy. When travel stops basically the economy stops, because we’re so tied together. It’s so important to understand how you peel the onion,” he said.

Meanwhile, the AHLA yesterday announced an initiative, in partnership with partner state associations across the country, which has identified more than 6,500 properties nationwide in close proximity to health care facilities that will provide temporary housing solutions for the health community.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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