Mar182020

Hilton closing major city hotels, Marriott furloughs tens of thousands

A White House meeting yesterday with lodging industry executives discussed the impact of Covid-19. American Hotels & Lodging Association expects half of the hotels in U.S. will temporarily shut down this year. Hilton is closing most of its hotels in major cities. Marriott had 174,000 employees worldwide with about 130,000 employees in the U.S. at the end of 2019 and plans to furlough tens of thousands of employees. Job losses at U.S. hotels are estimated to be impact about 4 million employees if hotel occupancy drops to 30-35%.

Hotel occupancy for U.S. tracked at 61.8% for the week March 1-7 after a drop of 7.3% for the week. Occupancy levels will likely fall at an even greater rate as data for U.S. hotel occupancy comes out for March 8-14 and March 15-21.

While Hilton and Marriott and other major chains like Best Western, Choice, Hyatt, IHG, Radisson and Wyndham are the familiar names to customers, the reality is most hotels are small business owners. The major corporations manage a small proportion of hotels and own only a fraction of those hotels. The majority of hotels are owned by small businesses who partner with a major hotel brand chain primarily for competitive marketing purposes.

Over the past decade even fewer American hotels have remained independent at less than 40% of all properties. Disasters are more likely to impact smaller independent hotels with closure.

From the consumer point of view, my preferred angle for writing about the travel industry, Skift news survey of travelers canceling their plans due to Covid-19 show trip cancellations were in the teens for the the past month until this past week when cancellations jumped to 46% of travelers. These recent cancellations significantly impacted U.S. domestic travel.

The travel industry engine has wound down quickly to a near halt in 2020 with unknown consequences for businesses and consumers to be determined.

Portola Hotel & Spa at Monterey Bay was formerly the DoubleTree Monterey for a couple of decades.

 

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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Comments

  1. My coworker’s wife works as an event planner at a Hilton. She was laid off Tuesday with the promise of being brought back when things pick up, but who knows when that will be.

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