Hospitality industry leaders said on Tuesday that millions of hotel workers could be laid off because of the pandemic.
The leaders called on Congress and the Trump administration to provide $150 billion in financial relief for the travel sector as massive layoffs begin and hotel occupancy hits the single digits in many establishments.
“Millions of people could get laid off in the next few days, not weeks,” said American Hotel and Lodging Association CEO Chip Rogers on a press call with reporters on Tuesday.
The coronavirus pandemic will have a more “severe economic impact on the hotel industry than 9/11 and the 2008 recession combined,” Rogers said on the phone call.
Rogers, U.S. Travel Association CEO Roger Dow, and other hospitality representatives met on Tuesday with President Trump and Vice President Mike Pence to share their fears and proposed solutions.
During the meeting, the hospitality representatives called on the federal government to create a travel workforce stabilization fund to enable the industry to have the resources to keep employees on the payroll and not have them be unemployed during the crisis.
They are asking for relief in the form of direct grants and are open to any economic package that Congress provides, either combined with an airline package or separate. Rogers said he hopes the government will give them enough money to pay their employees full salaries during this crisis or at least a large part of their salary or something similar to unemployment benefits.
Rogers noted after the meeting with Trump on Tuesday that he felt that “the president understands the severity of the problem.” Trump said he would help the hospitality industry but didn’t explicitly commit to any specific proposal or an amount of aid.
The airline industry on Monday already asked the federal government for $50 billion in aid as companies cut flights and lay off employees. The tourism industry is approximately 4.5 times bigger, in terms of workforce, than the airline industry.
Many hotels have already started laying off employees on a large scale. Jon Bortz, the CEO of the Pebblebrook Hotel Trust, said during the press call that he’s already had to let go of 4,000 workers, half of his total employees, with another 2,000 expected to be laid off by the end of the month if their financial situation doesn’t change.
Another executive, Douglas Dreher from The Hotel Group in Seattle, said a third of his workforce will be let go in the coming days.
“It’s utterly devastating on all levels. We need help in every imaginable way. The human toll breaks your heart,” said Dreher.
Rogers said that hotel occupancy has fallen somewhere between 10%-20% in major markets this week, dropping from record high occupancy and employment just a few weeks ago. He also predicted that 140 million rooms or more could be empty in the next 30 days.
Treasury Secretary Steven Mnuchin told Senate Republicans on Tuesday that the federal government wants to provide small-business relief as well as $250 billion in checks to adults in the U.S. within “a matter of weeks” to address the economic blow caused by the coronavirus pandemic.
Hitendra Chaturvedi, a business professor at Arizona State University’s W.P. Carey School of Business, said that, if it takes the federal government two or three weeks to act and get help on the ground, many small businesses will shut down.
“What’s the point in bolting the barn door when the horses have run away?” said Chaturvedi.
“Action needs to happen within days. It can’t happen fast enough,” said Bortz. “Where we thought we were a week ago is dramatically different today.”
