Layoffs Coming in Hotel, Restaurant Industries

The coronavirus pandemic has curbed travel as people shelter in place, resulting in a nightmarish situation for hotels and their employees. According to a new study from the American Hotel and Lodging Association, California, which has the most hotel-related jobs of any state in the U.S., will be hit particularly hard by massive layoffs. The study projects California will lose more than 125,000 of its roughly 285,000 direct hotel operations jobs as a result of travel restrictions and social distancing. It estimates the state will lose 414,000 of its 1 million hotel-supported jobs, which include supply chain and guest spending positions. Nationwide, the study predicts “44 percent of hotel employees in every state are projected to have lost or lose their jobs in coming weeks. … Hotel owners are already reporting facing massive, unavoidable layoffs and furloughs.” Already, Marriot International Inc. has announced that it is furloughing about two-thirds of its 4,000 corporate employees in Bethesda, Md., as well as about 10,000 hotel staff including housekeepers and managers. Hilton Worldwide Holdings Inc., too, announced it has furloughed roughly 10,000 hotel staff. According to Pete Hillan, a communications representative from the Hotel Association of Los Angeles, coronavirus-related layoffs will affect California’s economy more than other states. “California is the best state for tourists,” he said. “The industry is a significant player in our collective livelihood. When we have to close down our industry the way we have … the impact is likely disproportionate to other states.” Hillan said many hotels in the region are choosing to close their doors despite the county’s determination that they are “essential businesses” that may remain open during the crisis. “It’s just the right thing to do. It doesn’t make any sense to try and stay open if you’re violating health rules, not just for guests but for employees,” Hillan said. “There’s some economic or financial stewardship at play, but the guideline has been – we can’t put anybody at risk.” He added the association is working with city and state officials to determine a safe path forward when hotels can resume regular operations and start hiring back employees at full-time hours. The restaurant workforce, too, is expecting a massive wave of layoffs as regulators shut down dine-in operations for weeks. The National Restaurant Association sent a letter to Congress last week that projects the country’s restaurants will lose $225 billion in sales over the next three months. Such losses, the letter said, would force the elimination of between 5 million and 7 million restaurant jobs in the U.S.