MGM, Disney, others close hotels due to COVID-19

The resort at night
The 671-room Encore Boston Harbor Resort closed March 15. Photo credit: Encore Boston Harbor Resort

As cities and states across the United States close schools, restaurants and bars to slow down the spread of COVID-19, several hotels and hotel companies have spent the past few days announcing temporary closures.

MGM Resorts International

MGM Resorts International announced temporary closures for a number of its properties.

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On Sunday, March 15 MGM announced it would temporarily suspend operations at its Las Vegas properties until further notice, effective Tuesday, March 17. Casino operations are expected to close March 16. Affected properties are the Bellagio, Aria, Vdara at Aria, MGM Grand, The Signature at MGM Grand, Mandalay Bay, Delano Las Vegas, Park MGM, NoMad Las Vegas, The Mirage, New York-New York, Luxor and Excalibur.

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"Despite our commitment to dedicating additional resources for cleaning and promoting good health, while making difficult decisions to close certain aspects of our operations, it is now apparent that this is a public health crisis that requires major collective action if we are to slow its progression," Jim Murren, chairman/CEO of MGM Resorts, said in a statement. "This is a time of uncertainty across our country and the globe and we must all do our part to curtail the spread of this virus. We will plan to reopen our resorts as soon as it safe to do so and we will continue to support our employees, guests, and communities in every way that we can during this period of closure."

That same day, the company announced plans to close MGM National Harbor in Maryland and MGM Grand Detroit by midnight Sunday and Monday at 5 p.m., respectively. MGM Resorts noted the MGM Grand Detroit will remain closed for two weeks, at which time it will reevaluate the property’s status.

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Earlier in the weekend, MGM Resorts announced plans to temporarily close the MGM Springfield in Massachusetts for at least 15 days, as well as MGM Northfield Park (Ohio) and Empire City Casino in New York. 

The closings follow a letter MGM Resorts President Bill Hornbuckle sent to employees Friday. According to the Reno Gazette Journal, Hornbuckle said the company plans to begin furloughs and layoffs this week. Those impacted, he said, would maintain benefits through June 30.

Marriott Long Wharf

On Thursday, March 12, Boston Marriott Long Wharf, the site of a conference linked to a significant portion of known COVID-19 cases in Massachusetts, temporarily closed. The 415-room hotel had hosted a leadership conference for the biotech firm Biogen on Feb. 26 and 27. According to The Boston Globe, state officials on Thursday said 82 of the 108 Massachusetts cases of the virus had been linked to the Biogen event. On Sunday, the paper reported an employee at the hotel had tested positive for the disease

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“In the interest of public health, the Marriott Boston Long Wharf, in conjunction with the Boston Public Health Commission, made the mutual decision to close the hotel to guests on March 12, 2020,” read a statement from the Boston Public Health Commission. “The mutually agreed upon decision was based on the facts obtained through confirmed cases connected to hotel and contact tracing to identify close contacts of those cases. This is a critical step as we continue to work to mitigate the potential spread of COVID-19.”

Disney Closes Parks, Hotels

Late last week, Walt Disney Co. announced the planned closures of its Disney Parks locations in Anaheim, Calif.; Orlando; and Paris in response to COVID-19. At that time, it only announced plans to close the hotels at Disneyland Resort in Anaheim on March 16. Early this week, though, the company announced Disney-owned and operated hotels at Walt Disney World Resort and Disney’s Vero Beach (Fla.) Resort will close, too. The company will keep them open until March 20 to allow guests to make other arrangements.

Wynn Resorts

On Saturday, Wynn Resorts, also in consultation with the Massachusetts Gaming Commission, announced plans to close the Encore Boston Harbor the following day. Gaming areas closed in the morning with all other non-gaming operations to have ceased by midnight. The property is to be closed to the public for two weeks. Wynn will pay all full-time employees during this time.

The following day, Wynn Resorts announced it would temporarily close Wynn Las Vegas and Encore in order to reduce the spread of COVID-19. The closure will go into effect Tuesday, March 17 at 6 p.m. and be in effect for two weeks, at which point the company plans to reevaluate the situation. The company plans to pay all full-time employees during the closure.

Necessary (and Unnecessary) Actions

On Friday, before many of these properties announced their plans, AAHOA Chairwoman Jagruti Panwala and AAHOA President/CEO Cecil P. Staton issued a statement praising proactive initiatives from hotel companies: “We are impressed with some of the responses, such as Hilton Hotels hitting the pause button on the enforcement of brand standards, [property-improvement plans] and policy rollouts. This will allow owners more flexibility in areas such as limiting hours and food-and-beverage service in addition to allowing them to focus on the fundamentals of hotel operations. Our members’ first priority is keeping their guests and employees safe. Steps such as these taken by Hilton, Choice, Wyndham, G6, RLH Corporation, Radisson, and other brands will not only help owners do just that but also reduce the cost pressures associated with the implementation of these standards.”

As opposed to the 2009-2010 downturn, cutting prices at hotels and resorts is not likely to help keep businesses afloat, said David Eisen, director of hotel intelligence and customer solutions at HotStats (and former editor-in-chief of Hotel Management magazine). Since price is not a factor in this downturn, he said, dropping rates would only hurt hoteliers in the long run.

"This, too, shall pass, and when it does, it will be incumbent that operators show their worth to owners—that they are able to navigate through a challenging patch, especially dealing with expense control, and then outperform the market on the rebound," he said. "In order to come up rosy on the backside, consulting data and measuring hotel performance can be the difference between a healthy bottom line and a profit dud."

Long-Term Impact

But even with plans in place, hotel workers could see a financial toll from the outbreak. On Friday, the London-based World Travel & Tourism Council suggested that up to 50 million travel-related jobs could be at risk due to the pandemic. Latest figures from the council, which represents the global industry’s private sector, show that global travel could be adversely impacted by up to 25 percent in 2020, equivalent to a loss of three months of global travel. This could lead to a corresponding reduction in jobs of between 12 and 14 percent. 

“The COVID-19 outbreak clearly presents a significant threat to the industry as a whole, to those employed within it, and those wishing to continue traveling,” said Gloria Guevara, WTTC president/CEO. The council is calling for a series of measures to support the industry’s recovery once the outbreak is under control. 

  1. Improve travel facilitation: Remove or simplify visas wherever possible, reduce the cost and improve processing times where practical, accept other visas when appropriate and introduce more efficient technologies for seamless and secure travel.
  2. Remove barriers: Ensure that unnecessary barriers are removed or relaxed to alleviate pressure at ports and airports, including temporarily lifting of the 80-20 slot policy rule, ports assignments and implement flexible working visas for the industry in some countries with existing limitations, especially in hospitality and tour operation. 
  3. Ease fiscal policies: Reduce and remove travelers’ taxes (air passenger duty and similar airport, port and hospitality taxes around the world) to minimize the cost of travel. 
  4. Introduce incentives: Introduce relief and incentives to support business continuity for companies that have been most negatively impacted by the outbreak. Small- and medium-sized businesses in particular will take longer to recover. 
  5. Support destinations: Increase budgets and assign resources for promotion, marketing and product development purposes in destinations when they are ready to accommodate visitors again.

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