Hotels are still struggling to fill rooms like they were before an avalanche of cancellations starting in March.
Now, travelers are slowly returning to train stations, airports, and hotels.
“This is something that none of us were expecting or were prepared for,” said Daniel del Olmo, the President and COO of Sage Hotel Management, a Sage Hospitality Group company.
Sage Hospitality Group manages 52 hotels across the U.S.
“We went from basically a level of revenue of $3 million on a daily basis to effectively $40,000 per day in early May,” del Olmo said.
“The economic impact has been something that no one could have ever prepared for, you could not have prepared for it financially, you could not have even prepared for it psychologically or emotionally,” said Chip Rogers, President of the American Hotel & Lodging Association. “2020 will go down on record of having the lowest occupancy in the history of the hotel industry and that includes during the Great Depression.”
The association represented the entire industry from large brands to small hotels.
For smaller companies, the impact of COVID-19 is especially difficult on their bottom line.
“Well over 60% of all hotels are actually classified as small businesses by the Small Business Association,” Rogers said.
“In the third week of March, we found ourselves having to furlough over 90% of our staff,” del Olmo said.
“With no further assistance, about two thirds of hotels say they cannot make it another six months,” Rogers said.
Del Olmo said they haven’t reached that point.
“We have not had to permanently close, thankfully, any of our properties,” he said.
But others have. Fewer visitors means less money and less work.
“We’re right at almost 2 million jobs lost in the hotel industry,” Rogers said.
Del Olmo said Sage Hospitality had to furlough 5,000 employees, then eventually lay off 4,000.
“What keeps us up at night,” Del Olmo said, “is how we bring our associates back to work.”
In the meantime, the group is providing help for former employees.
“We initially established a Sage Associate Relief Fund, which allowed us to basically provide pantry items to our associates in need,” he said.
While employees still on the job were given more tasks to help fill the gap.
“Everybody basically on the teams is doing multiple jobs that, in the past, they might have never done before. We have general managers that on a daily basis strip beds and run the parking,” Del Olmo explained.
As hotels continue to balance health, safety and running a business, they are getting creative with ways to bring in revenue, such as hosting micro weddings and hallways concerts with musicians.
“Basically roaming the halls. You basically could be listening from the comfort and safety of the entry from your room,” Del Olmo said.
Even with the creative new solutions, Rogers said without aid or an uptick in travel, some hotels may suffer.
“We may be a much smaller industry in the next couple of years but we will adapt,” Rogers said.
