Research breaks down COVID-19's impact on hotels, travel plans

The American Hotel & Lodging Association released new data showing that 70 percent of hotel employees have been laid off or furloughed as eight in 10 hotel rooms across the nation remain empty.

As the COVID-19 crisis progresses, the impact to the travel industry is nine times worse than 9/11, with forecasted occupancy rates for 2020 hitting record lows worse than rates in 1933 during the Great Depression.

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“With the impact to the travel industry nine times worse than September 11, the human toll of this public health crisis has been absolutely devastating for the hotel industry. For the hotel industry our priority is rehiring and retaining our hardworking employees who power our vibrant industry,” said Chip Rogers, president/CEO of AHLA. “Hotels were one of the first industries affected by the pandemic and will be one of the last to recover. The [Coronavirus Aid, Relief and Economic Security] Act was an important first step with a lot of supportive measures for the hotel industry, but we need Congress to make important changes to the program to reflect the current economic reality and help the employees in the industries that have been impacted the most.”

Due to the dramatic downturn in travel, properties that remain open are operating with minimal staffing. On average, full-service hotels are using 14 employees, down from 50 before the crisis. Resort hotels, which often operate seasonally based on the area’s peak tourism months, averaged about 90 employees per location as recently as March 13, are down to an average of five employees per resort today.

The key findings of the report include:

  • Impact to travel industry 9 times worse than 9/11. (Tourism Economics)
  • 50 percent revenue decline (projected) for entirety of 2020 (Oxford Economics)
  • Eight in 10 hotel rooms are empty. (STR)
  • 2020 is projected to be the worst year on record for hotel occupancy. (CBRE)
  • Forecasted occupancy rate for 2020 worse than 1933 during the Great Depression. (CBRE)
  • 70 percent of hotel employees laid off or furloughed. (Oxford Economics and Hotel Effectiveness)
  • $2.4 billion in weekly lost wages due to the crisis (Oxford Economics and Hotel Effectiveness)
  • Nearly 3.9 million total hotel-supported jobs lost since the crisis began (Oxford Economics)

As travel halted in late February, the hotel industry took immediate action to work with the White House and Congress to help hotel industry employees and small business operators, which represent 61 percent of hotel properties in the U.S.

“The hotel industry is at a critical juncture. We need more resources to survive this unprecedented time,” said Rogers. “Additional funding is vital for small business owners across America, including tens of thousands of small business hoteliers, to help them keep their doors open and rehire and retain millions of employees.”

Travelers’ View

Results from the second wave of the Travel Intentions Pulse Survey, released this week, show that 90 percent of travelers surveyed had some type of travel or travel-related activity planned prior to the COVID-19 outbreak and 80 percent of those either canceled or postponed those plans. The research, conducted by MMGY Travel Intelligence and commissioned by the U.S. Travel Association, measures the impact of COVID-19 on U.S. leisure and business travelers.

While six in 10 leisure travelers have canceled a planned vacation as a result of COVID-19, one in three travelers has postponed vacation plans in hopes of rescheduling later in the year, according to the survey. Additionally, as the pandemic continues, travel intent during the upcoming six months continues to decline, with intent to travel for leisure vacations falling to 31 percent (from 39 percent) and intent to travel for business down to 21 percent (from 26 percent). Americans’ willingness to travel both domestically and internationally remains dependent on the slowing of the spread of COVID-19 and the reduction of Centers for Disease Control and Prevention advisories. 

The potential impact of attractive travel deals to help stimulate bookings fell nine percentage points from the first survey to the second, suggesting that concerns about safety take precedence over attractive prices. With that said, more than half of respondents (52 percent) stated they would be eager to travel for leisure once the COVID-19 pandemic passes. Early indications reveal that younger adults will be the first to travel again as evidenced by their intent to engage in almost every type of travel-related activity during the next six months.