The hotel industry is crumbling — and Uncle Sam may not be coming to the rescue.
More than 2 million hospitality jobs have already disappeared during the pandemic. Within the next six months, a stunning 38,000 US hotels could be forced to close, according to the American Hotel & Lodging Association.
“If we don’t get a vaccine soon and business doesn’t return, it’s going to get much worse,” Best Western CEO David Kong, the industry’s longest-serving CEO, told CNN Business.
Kong, who in March met with President Donald Trump at the White House to discuss federal aid, expressed deep frustration with the leaders of Congress for failing to reach a bipartisan agreement on another round of fiscal stimulus.
“They are just so stuck in their positions. I feel so aggravated by it. Why can’t we work something out?” the Best Western CEO said.
Like many hotels, Best Westerns are owned by franchisees, rather than a deep-pocketed corporation. These Best Western small businesses have cut an estimated 20,000 jobs since the start of the health crisis. That’s on top of the layoffs of 800 corporate associates at the parent company that owns the hotel brand.
“We’re putting them out on the street during a pandemic,” Kong said. “They don’t have a safety net. It’s a very heart-wrenching situation.”
With stimulus talks stalled, leading hotel CEOs wrote a letter to Trump on Thursday pleading for help.
“Your engagement is desperately needed to support struggling businesses, stem the impending wave of foreclosures and save millions of jobs,” the hotel CEOs wrote.
‘There is so much pain and suffering’
Politicians may not feel a sense of urgency to spend trillions more because of the uneven nature of the recession.
Although hotels, airlines, restaurants and cruise lines are in crisis, other parts of the economy are recovering swiftly — or already have. Home prices are soaring. Millions of jobs have been added to the economy. The S&P 500 has raced back to record highs. And companies like Amazon, Zoom and Apple are booming.
“There is so much pain and suffering, but they’re numb to it because the stock market is doing well and unemployment is below 9%,” Kong said.
Even the deadlock in Congress on another round of fiscal stimulus has failed to deal a meaningful blow to the stock market. The S&P 500 is just 2% away from its early September record high.
“A lot of people would say they don’t understand why the market is seemingly going up and up,” Kong said. “That’s not Main Street. That’s Wall Street. They don’t seem to feel the pain of most businesses.”
A broken-down car away from disaster
Maura Robson was working full-time at a Holiday Inn in Webster, New York, when the pandemic erupted. The