The Economic Impact of COVID-19 on the Hotel Industry

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Offline Sharmin Sultana

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The Economic Impact of COVID-19 on the Hotel Industry
« on: July 11, 2020, 07:56:09 PM »
COVID-19 has impacted nearly every industry and everyone living and working across the globe. It’s no secret the hospitality industry is among those who have been hit the hardest with a real economic impact. Hotels employ approximately 4% of the total U.S. workforce, nearly 8.3 million people, according to AHLA. And with so many of these employees currently being out of work or losing hours due to limited travel as a result of Covid-19, the economic impact is just as huge and people are really feeling the effects quickly. This article will discuss COVID-19’s impact, how the hotel industry can make the most of their time now and how they can prepare for the future.

THE IMPACT
At Hotel Effectiveness we look at data daily. Of the 8.3 million Americans employed by the hotel industry, 85% are paid hourly. Knowing that the majority of employees are paid hourly, we have seen a drastic 71% drop in hours worked over the last two weeks. So what’s the potential economic impact of a drop like this? Considering most hourly employees receive an average hourly wage rate of $13, and assuming a typical 36-hour week, this would mean hourly hotel employees in the United States have lost about $2.3 billion of income per week. But we also know that in many markets, hotels had been struggling to find enough staff which meant the staff they did have were receiving a lot of overtime hours. All of that extra pay is also lost, so the real weekly impact is even bigger. Meanwhile, the volume of employee terminations over the same period has increased by nearly 470%, mostly the result of layoffs, furloughs and hotel closures.

 source: https://hospitalitytech.com/economic-impact-covid-19-hotel-industry