Here’s How COVID-19 Has Affected The Restaurant & Hospitality Industry
It’s no secret that COVID-19 has wreaked havoc on the restaurant and hospitality industry. But just how bad have things become? What’s the impact on the industry overall here in the US? And what does opening back up look like for hotels and restaurants?
We’re going to take a deep dive using available data from studies and credible publications to give you an outlook on how bad things have gotten and whether or not there is reason for optimism as the country reopens to dining in and traveling out.
Impact On Revenue & The Hospitality Workforce
The hotel industry has been one of the first and worst industries affected by COVID-19 shutdowns. Unfortunately, data shows that it will also be one of the last to recover.
Travel is slowly working its way back, but the hotel industry remains precariously close to collapse. Here are some stats on COVID-19s impact on the hotel industry.
Unprecedented hotel cancellations have hit the American hotel industry. This has led to significant layoffs and furloughs of hotel staff.
Overall Job Loss
According to the Bureau of Labor Statistics, 7.5 million leisure and hospitality jobs have been lost since February. Months later, the leisure and hospitality sector is still down 4.3 million jobs, meaning 38% of employees remain out of work compared to the national average of 10.2%. Many of those still working have seen their hours and wages
reduced.
Source: EHL Insights
Lost Earnings & Revenue
The more than half of direct hotel employees laid off or furloughed amounts to a loss of over $1.7 billion in earnings for hotel workers each week. This is a pace of $2.8 billion in lost room revenue per week (based on current occupancy rates and revenue trends.) US hotels have lost more than $46 billion in room revenue since mid-February.
The total revenue losses project to over 50% for 2020.
Source: AHLA Report: State of the Hotel Industry Analysis: COVID-19
Six Months Later
The National Restaurant Association says the restaurant industry lost more than $120 billion during the first three months of COVID-19.
(Source: National Restaurant Association)
Occupancy Rates At Historic, Unsustainable Lows
At its worst, hotel occupancy was at a historic low of 24.5% in April.
An occupancy rate below 35% is thought to be unsustainable, which puts 33,000 small businesses at risk of closure. 65% of hotels remain at or below 50% occupancy, still below the threshold at which most hotels can break even and pay debt. Urban hotels, which are major employers due to their size, have been particularly hard hit. Their current occupancy rate is just 38%, well below the national average. These jobs are unlikely to return without a dramatic increase in occupancy and/or Congressional action.
Source: AHLA Report: State of the Hotel Industry Analysis: COVID-19 Six Months Later
Source: https://www.kitchenall.com/how-covid-19-has-affected-the-restaurant-hospitality-industry-infographic
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