Coronavirus pushes hotel industry to ask Trump for $150 billion in aid
Staggered by the coronavirus outbreak, the lodging industry requested $150 billion in aid from the Trump administration Tuesday as Marriott International announced plans to furlough tens of thousands of workers.
After a White House meeting with President Trump and Vice President Mike Pence, hotel industry leaders said the virus outbreak is on pace to cause a bigger economic hit than the 2001 terrorist strikes and the 2008-09 recession combined.
In addition to the $150 billion requested by the hotel industry, other sectors of the travel industry — such as convention centers, theme parks and tour companies — have requested $100 billion in funding to overcome the crisis, said Roger Dow, president of the U.S. Travel Assn., the trade group for the country’s travel industry.
That is on top of the $58 billion in aid requested Monday by the airline industry to overcome a surge in flight cancellations amid new travel restrictions.
Without federal aid to the travel and lodging industries, the U.S. could lose as many as 4 million jobs in 2020, pushing the unemployment rate from 3.3% to 6.3% across the country, Dow said.
Hotel occupancy rates were around 80% a few weeks ago but are now 10% to 20% in the busiest cities of the country, Chip Rogers, president of the American Hotel & Lodging Assn., said in a conference call with reporters.
The federal aid, he said, has been requested in the form of grants to keep workers employed until the crisis subsides. Details about how the money would be disbursed had yet to be decided, Rogers said.
“The need is immediate,” said Jon Bortz, chief executive of Pebblebrook Hotel Trust, which owns 54 hotels with 8,000 employees. “Folks are being furloughed and laid off every day.”
Bortz said his hotels have already laid off 4,000 workers and by the end of the month may need to let go of an additional 2,000 employees.
“We are looking at closing our doors at more than half of our properties,” he said.
Marrriott, the world’s largest hotel company, with 30 hotel brands and more than 7,000 properties worldwide, confirmed reports that it will be forced by a surge in cancellations to either cut back work hours or furlough a large portion of its workforce. Marriott International had 174,000 employees around the world at the end of 2019, according to securities filings.
“We are adjusting global operations accordingly, which has meant either reduction in hours or a temporary leave for many of our associates at our properties,” the company said in a statement Tuesday. “Our associates will keep their health benefit during this difficult period and continue to be eligible for company-paid free short-term disability that provide income protection should they get sick.”
Marriott’s announcement signals that the blow that has already shook the airline industry, theme parks, ski resorts and restaurants has started to rattle the U.S.'s $660-billion hotel and lodging industry.
Already the effect of the outbreak is costing the hotel industry $1.4 billion a week in lost revenue, according an estimate by the American Hotel & Lodging Assn. and the U.S. Travel Assn.
Under the worst scenario, overall hotel occupancy could drop to 35% for 2020, half of all hotels in the country could close and about 4 million jobs in the industry would be lost, Rogers said.
Marriott did not address how many workers would be furloughed, but the company confirmed that news reports Tuesday about “tens of thousands” of employees being furloughed were accurate.
“While the ultimate impact is difficult to predict at this time given the fluidity of the situation, we remain confident in our long-term prospects,” the Marriott statement said.
In Las Vegas, 14 hotels along the Strip temporarily closed Tuesday, as have all the hotels and restaurants in Yosemite National Park.
In Southern California, the opening of the 466-room JW Marriott that was scheduled for Monday in Anaheim was postponed indefinitely. The Disneyland Hotel and the Grand Californian at the Disneyland Resort have closed, along with the Great Wolf Lodge in Garden Grove.
The Los Angeles City Council was expected to consider Tuesday an emergency measure to require employers faced with economic hardships to fire workers with the lowest seniority first and to have a documented just cause before permanently dismissing employees.
To help hotel workers who have already been fired, a coalition of labor groups, including Unite Here, Local 11, organized a food distribution program Tuesday at the Hospitality Training Academy.
Myra Madrid, a housekeeper at the Four Seasons Los Angeles at Beverly Hills, was among about 800 hotel workers who attended the event to get help signing up for unemployment benefits or to pick up donated food.
After 10 years at the hotel, Madrid said, she was furloughed Friday and told she may be called back once the crisis is over.
“I’m very worried because I have bills to pay and my husband doesn’t work right now,” she said. “I don’t know what to do.”
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