Mass layoffs in the hotel industry are putting thousands of people out of work across Georgia as occupancy rates plunge below 20% and hotels are shuttered.
Industry leaders are calling the impact of the travel shutdown from the coronavirus worse than 9/11 and the 2008 financial crisis combined. Even hotels able to stay open are reducing staff or hours while closing floors and restaurants as revenue declines 75% to 90% in parts of the U.S.
Metro Atlanta is particularly hard hit because of its dependence on conventions and events. More than 300,000 people work in leisure and hospitality in the area, according to the Bureau of Labor Statistics.
“We had the city loaded down with the best sporting events, conferences. It was full and the switch just turned off,” said Jim Sprouse, executive director of the Georgia Hotel & Lodging Association.
He said occupancy in some areas around the state was in the single digits in percentage terms. “The hotels are in dire straits,” he added, with Savannah, Tybee Island, Columbus and other destinations being hard hit in addition to Atlanta.
InterContinental Hotels Group, which has its Americas headquarters in Atlanta, has instructed headquarters employees to work remotely as much as possible for the foreseeable future. The company’s CEO Keith Barr said demand for hotels is “at the lowest levels we’ve ever seen” and on Friday announced salary cuts and other cost-cutting measures.
An estimated 24,200 hotel jobs are expected to be lost in Georgia, along with more than 100,000 job losses in sectors supported by the hotel industry in the state, according to the American Hotel & Lodging Association.
“The bulk of our hotels in the major (U.S.) cities are closing, as we speak,” Hilton CEO Chris Nassetta told President Donald Trump in a meeting this week.
Marriott CEO Arne Sorenson in a video message said hundreds of hotels are closed or have started to close, and hundreds of employees are quarantined.
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Hilton and Marriott both are furloughing or laying off tens of thousands of employees.
Nationwide, the American Hotel & Lodging Association expects the industry will lose 1 million jobs this year, and millions more in sectors supported by hotels. The travel industry has requested a federal government bailout, calling for $150 billion in aid including loan programs to help franchisees and grants to workers.
The paltry bookings extend through April and the layoffs already number in the thousands across Georgia, according to Michael Owens, CEO of the Savannah-based Tourism Leadership Council. “We’re hearing from partners around the state a devastation that no one’s ever seen before.”
Pritpal Singh, general manager of the Perry Lane Hotel in downtown Savannah, said his hotel remains open and some guests within driving distance are coming in, but occupancy has dropped and he had to temporarily furlough 115 of his 200 employees for 60 days.
In Savannah, 1 in 7 jobs relies on tourism, said Owens, adding nearby Tybee Island “will be heavy hit.” Savannah and surroundings were hurt by the cancellation of Tuesday’s Savannah St. Patrick’s Day festival and parade.
The postponement of the Masters golf tournament will have “a massive financial ramification” in Augusta, according to Owens, because many people and businesses rely on those two weeks of business in April to help pay bills for the rest of the year.
Sprouse, of the Georgia association, said some hotels in the state are laying off 80% to 90% of employees. In some cases, they are trying to divide up shifts “so everybody gets a little bit of work.”
People who rent out houses or units on AirBnB are also seeing a drop in income from cancellations.
Kara O’Brien, who has two cottages and a treehouse in East Atlanta that she rents out on AirBnB, said she was booked at capacity, then “we got basically three months of cancellations within like three days.”
O’Brien has mortgages on both of the cottages. “It’s scary.”
She said the cancellations come with full refunds. “We certainly don’t blame them,” she said of travelers bailing. “But it was still kind of like, ‘Oh my gosh, this just got real.’”
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