xi's moments
Home | Americas

Pummeled hotels in long wait for recovery

By SCOTT REEVES in New York | China Daily | Updated: 2020-08-27 09:05

A worker sweeps an empty courtyard outside the Lotte New York Palace hotel as the coronavirus outbreak continued to affect the tourism industry in Manhattan, New York City, US, March 13, 2020. [Photo/Agencies]

The novel coronavirus has battered the US hotel industry as state-imposed travel restrictions probably mean bookings won't recover until the third quarter of 2021 at the earliest, industry officials said on Monday.

Many hotel operators have had trouble making mortgage payments, and federal aid or other government programs such as funds for temporarily housing the homeless, while welcome, are viewed as stopgap measures.

The effect of the COVID-19 pandemic on the industry is nine times greater than the decline in bookings following the Sept 11,2001, terrorist attacks in New York and Washington, the American Hotel and Lodging Association said.

Simply put, there are not enough customers to keep hotels financially sound.

Mike Somers, CEO of the New Hampshire Lodging and Restaurant Association in Concord, was downbeat on the industry's immediate prospects.

"Demand is soft," he said. "Customers are terrified about traveling. Anyone coming to New Hampshire from outside New England must quarantine for 14 days. That puts pressure on the industry."

Somers said he expected little change until a vaccine is developed and widely distributed.

"Elected officials are being cautious and want to avoid a spike in cases," he said. "Things are't going to get significantly better anytime soon."

It's a nationwide problem. The Baird/STR Hotel Stock Index is down 42.7 percent through July 31 as investors flee the hospitality industry.

"Hotel stocks underperformed again in July as industrywide occupancy growth continued to moderate on a weekly basis," said Michael Bellisario, senior hotel research analyst at Baird, an investment bank and wealth management company based in Milwaukee, in a report.

"Investors remain focused on the impact of rising coronavirus case counts on broader travel trends, and prior optimism about prospects for business travel to return in a meaningful way this fall has faded."

Companies tracked in the index include Extended Stay America, Hilton, Hyatt, InterContinental, Marriott and Wyndham.

"The (hotel) industry in New York City is facing its worst crisis in nearly 100 years," said Vijay Dandapani, CEO of the Hotel Association of New York City, in an e-mail to China Daily.

"The consensus is that a recovery will not begin until the third quarter of next year with revenue approaching 2019 levels in 2025."

He said about 200 of the city's 700 hotels have closed temporarily or permanently and another 200 are housing the homeless as part of an effort to limit the spread of the virus.

"Federal aid can help, but it's a bit like keeping a patient on dialysis-debilitated and never able to be self-reliant," Dandapani said.

During the coronavirus outbreak, the city moved roughly 9,500 homeless people from shelters into 63 hotels across the city, 32 of which are in Manhattan.

Global Edition
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349