Struck by a severe drop in travel demand, California’s hotel industry is expected to lose more than 125,000 jobs in the next few weeks, more than in any other state, an industry trade group estimated Monday.
The hotel industry in the Golden State is expected to be hit hardest by the coronavirus outbreak because California has the most hotel jobs — about 285,000 — according to the American Hotel and Lodging Assn., a trade group.
In addition to the loss of 125,000 hotel jobs, an additional 414,000 jobs that are supported by the hotel industry, such as waiters, busboys, bartenders and limousine drivers, could disappear in the next few weeks, the group said.
Only last month, the average occupancy rate — the percentage of hotel rooms filled — was 62% across the country, according to STR Global, a Tennessee company that tracks hotel data. By mid-March, the average occupancy rate nationwide had dropped to 53%.
To break even, hotels need to have an occupancy rate of 41% to 63%, depending on the type of hotel, according to industry analysis. Upscale hotels need a higher occupancy rate to pay for extra amenities, such as room service, valets and concierges, while economy hotels can break even with a much lower occupancy rate.
Because of the pandemic, hotels in some cities, including Seattle; San Francisco; Austin, Texas; and Boston, are reporting occupancy rates below 20%, with some individual hotels already shutting down, according to the American Hotel and Lodging Assn.
“The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the Great Recession of 2008 combined,” Chip Rogers, chief executive of the trade association, said in a statement Monday.
The lodging industry requested the federal government provide $150 billion in financial aid to keep the hotel industry afloat during the crisis. That is in addition to the $100 billion requested by other segments of the travel industry, such as convention centers, theme parks and tour companies.
The U.S. airline industry appealed to the White House last week for $58 billion in aid to overcome a surge in flight cancellations amid new travel restrictions.
“The White House and Congress can take urgent action,” Rogers said, “to protect countless jobs, provide relief to our dedicated and hardworking employees, and ensure that our small-business operators and franchise owners — who represent more than half of hotels in the country — can keep their doors open.”
Among other states that are expected to lose the greatest number of hotel jobs are Florida (88,000), Nevada (85,000), Texas (64,000) and New York (49,000), according to the hotel trade association.
To help those hotel workers who have already been laid off or furloughed, Unite Here Local 11, a union that represents Southern California hotel workers, launched a food bank last week that distributed food to about 3,000 families. The union also helped unemployed hotel workers file for unemployment benefits.
“We are on the brink of an economic calamity for workers in the hotel industry,” said Meghan Cohorst, spokeswoman for Unite Here International, which represents hotel, airport, casino, theme park and stadium workers.
The union estimates that 80% to 90% of its 300,000 members across Canada and the U.S. are out of work, she said, adding that the union is pushing hotel operators to continue to pay into health insurance packages for the displaced workers.