Hotel Survival Tips During COVID-19
By Travis Crabtree President & General Counsel, Swyft Filings | June 14, 2020
The hotel industry, among many others, is feeling the impact COVID-19. According to the American Hotel & Lodging Association (AHLA), seven out of 10 hotel rooms were empty across the U.S. as of March 25th. Since then, shelter-in-place orders and social distancing have essentially put life, including travel, on hold.
At the beginning of 2020, the accommodations industry had been experiencing steady growth for a couple of years. A 2019 report found that accommodations businesses had seen 38% year-over-year growth in regards to new businesses formed. The emergence of vacation home rentals through sites like Airbnb and Vrbo drove innovation across the board, particularly by utilizing more technology. The healthy competition within the industry paved the way for new businesses to form and hotel industry veterans to adopt new trends.
Yet, the industry is now faced with a new challenge which is also driving innovation and adjustments: COVID-19. Mass cancellations, orders that prohibit or discourage traveling, and uncertainty around how long until life resumes to relative normalcy are making it extremely difficult for hotels to remain profitable, if open at all. Undoubtedly, more hotels will continue to close their doors and be forced to layoff or furlough employees.
While there's much that's out of our collective control, for the time being, there are steps hoteliers and hotel management can take now to help increase the chance that there's a hotel to open back up when the dust settles. Below, we'll discuss the hotel industry's role in the U.S. economy and explore a few options worth considering in the coming months.
The Success of Hotels Goes Beyond a Single Industry
The impact of hotels goes beyond the accommodations industry. They play a pivotal role in the U.S. economy. According to an Oxford Economics Study, the hotel industry supports 1 in 25 jobs in the U.S. Looking at these figures annually, that totals to $97 billion-plus in wages and salary income and contributes nearly $660 billion to the U.S. GDP. The sheer volume of profits lost from the hotel industry will have very negative implications for the economy as a whole.