The Hotel Industry: National and Statewide Effects of the Pandemic
The hospitality industry has been particularly hard hit economically in terms of job losses and furloughs that have resulted from the COVID-19 pandemic. At the national level, Fox Business reported this week that the number of jobs lost in the hospitality and leisure industry is more than seven and a half million. Based on data from the American Hotel & Lodging Association, 70 percent of hotel employees have lost their jobs or been furloughed because of the pandemic, according to a Forbes report. Fox Business also reported this week on global layoffs of 1300 employees at Hyatt Hotels Corporation, along with decreases in pay at the senior management level, for board members and for other employees.
National Data and Statistics
According to jobs loss statistics provided by the American Hotel & Lodging Association (AHLA):
- hotels in the United States have lost more than $23 billion in revenue since mid-February
- layoffs or furloughs have affected 70 percent of direct hotel employees
Oxford Economic Study Data provided by the AHLA shows, for the end of March 2020, of the total of over 8.3 million jobs total hotel supported jobs in the United States, there has been a total loss of hotel supported jobs of more than 3.7 million.
Florida Data and Statistics
A year ago, according to Investopedia, Florida ranked as the world’s top travel destination.
Statistics reported by Investopedia showed that, as of February 2020, approximately 1.3 million of 9.1 million people employed in Florida were employed in the tourism industry.
As the top travel destination in the world, Florida has been significantly affected by the COVID-19 pandemic. Oxford Economic Study Data provided by the AHLA shows a total loss of hotel supported jobs of more than 336,000 (out of the total of more than 747,000 total hotel supported jobs in the state) for the end of March 2020.
Financially, the hospitality industry must also contend with the issue of its reliance on commercial mortgage-backed securities, as reported by the Real Deal, South Florida Real Estate News. Commercial mortgage-backed securities, or CMBS, are investment and loan products. They are defined by Investopedia as mortgage-backed securities that are backed by commercial mortgages (as opposed to mortgage-backed securities, which are generally backed by residential real property). These financing arrangements are more difficult to restructure, if necessary, when compared with traditional real estate loans, according to the Real Deal.
Considerations for the Future
On April 27, 2020, the Florida Restaurant and Lodging Association (FRLA) released a document entitled “Critical COVID-19 Guidance Standards for Hospitality Reopening.”
This guidance, which was developed by the Florida Restaurant and Lodging Association in partnership with the National Restaurant Association and the American Hotel and Lodging Association, addresses:
- Initial opening/operating
- food safety
- cleaning and sanitizing
- employee health monitoring and personal hygiene
- social distancing monitoring
- Hotel protocols
- safety and health resources
- basic infection prevention measures
- hygiene and environmental safety
For additional information about the effects of COVID-19 on Florida businesses, or if you have legal questions pertaining to your business in particular, contact a Fort Lauderdale business lawyer at Sweeney Law.