by Loren G Edelstein | March 20, 2020
USA - Even if travel activity begins to recover in June from the near-shutdown imposed by the COVID-19 outbreak, the US travel industry could lose 4.6 million jobs well before that - by the end of April. That would effectively double the national unemployment rate and potentially launch the country into a protracted recession, according to an updated analysis by Oxford Economics.

Industry leaders took that dire message to the White House last week, impressing upon lawmakers the wide-ranging impact of COVID-19 - not only on the travel industry and its employees, but on the broader US economy - and asking for about US$250 billion in immediate aid for the lodging industry and tourism-related businesses.

Among those meeting with president Donald Trump and VP Mike Pence were the heads of major US hotel companies, along with Mr Roger Dow, president and CEO of the US Travel Association; and Mr Chip Rogers, president and CEO of the American Hotel and Lodging Association (AHLA).

"Our business is facing a catastrophe," Mr Dow told the media in a press conference following the White House meeting. "It is sudden, and it needs to be fixed suddenly." Economic aid is not only necessary for the big businesses in the hospitality sector, Mr Dow emphasised, but for the small businesses that make up 83% of the travel industry. "These people are losing their jobs."

This is a critical and immediate concern that requires immediate attention, the industry leaders emphasised. "We have time in the future to talk about recovery, which is going to be important," said Mr Dow. "But right now, it's important to keep these people working, to keep these businesses operating all across the travel industry. And that is going to take several hundred billion dollars, just from a lodging standpoint."

An Unprecedented Crisis
While the hospitality business has seen its share of crises, this is unlike any other in our history, and it is happening at an unprecedented pace, noted the AHLA's Mr Rogers. Just four weeks ago, hotel occupancy rates were at a record high and unemployment rates were low.

pwUSA200320
Chip Rogers, president and CEO of the American Hotel & Lodging Association. Credit: AHLA

"… we're now faced with the reality that half the hotels in the United States may close during this year," said Mr Rogers. "Hotel occupancy is running at less than 20% today, even in the single digits in some places. If, over the year, it averages 30 to 35%, you're looking at job losses in the 4 million range just from our industry alone," he said. To minimise the damage, hoteliers need immediate funds to pay employees and assure that they are prepared to return to work when the COVID-19 crisis subsides.  

"We're asking for direct grants," emphasised Dow. "This is urgent. It's critical to our economy." The lack of travel has a dramatic ripple effect on other businesses, he noted. "What happens when people travel? It's where sales deals are done, where products are sold; it effects entire economies. When the travel stops, basically the economy stops because we're so tied together."

The President "Gets It"
"If you have a hotel that's sitting empty and there are no guests, there's no work to be done, and there's no revenue. How do we get past that? How do we make sure that we're taking care of our employees?" asked Mr Rogers. "That was the first concern of the industry. It was the first concern expressed to the president, and I feel like he fully understands that… and the vice president does as well."

Mr Dow agreed that president Trump appreciates the urgency of this crisis. "The message I heard was that he's going to act big and fast ... He's meeting with the banking leaders, and he said the banks are going to be very cooperative and helpful in this.

"This is finally an opportunity where the Congress is working together and pushing things quickly," Mr Dow added. "I think that's very important."

This is an abridged version of an article that first appeared in Northstar Meetings Group.