The hotel and hospitality industry thrives off of the ever-constant flow of people coming in and out of their establishments. Hotels have the ability to temporarily house a large number of guests despite the various reasons behind their travel and may do so comfortably. Until the recent evolution of a worldwide pandemic, that is.
The Coronavirus or COVID-19 has brought many non-essential, independently owned and operated businesses to an unanticipated and screeching halt. State regulations vary, but in an effort to minimize the impact of COVID-19, many governing officials have declared non-essential travel obsolete and in violation of temporary “stay at home” orders. Since the beginning of this pandemic in February of 2020, hotels across the United States have lost over $18 billion dollars in revenue simply because people are not allowed to travel freely. At a current average of $3.5 billion in lost revenue per week that is expected to worsen at a dramatic pace, the future of the hotel industry is at stake. As of April 29th, eight out of ten hotel rooms across the country remain empty. The massive loss in profit is not expected to improve anytime in the near future, as hotels are currently on the right track to lose more than $500 million dollars per day judging from occupancy rates. Last week alone, revenues decreased by 20% and are predicted to decrease 80% by the end of the second quarter.
The sudden and prolonged decline in guest traffic has hotels experiencing an equally devastating layoff and the unemployment rate as well. 3.9 million jobs have been lost or are expected to reach termination within the next few weeks if the pandemic does not improve. In the hotel industry alone, 70% of direct hotel staff being laid off or furloughed means that these employees are collectively losing more than $2.4 billion dollars in earnings every week. Both individually owned and operated hotels and major operators are simply unable to compensate for the extreme financial setbacks COVID-19 has created for their businesses. Occupancy rates for many establishments must stay above 35% just to cover operating expenses, and as the projected room rentals are expected to reach below 20% in the coming months, the fear of closing hotel doors has become all too real for business owners. In the event that such an unfortunate situation occurs, more than 33,000 small businesses will be placed at the immediate risk of shutting down.
Curve Hospitality is dedicated to serving our community during this time of hardship. Please reach out to us to find out how we can help to bring guests back into your establishment.