‘Very bleak.’ Job losses in Kentucky hotel industry could top 7,000, industry says
A wave of cancellations due to coronavirus-related travel restrictions and bans on large groups gatherings will likely mean a loss of more than 7,000 hotel jobs in Kentucky alone, according to estimates from a hotel trade association.
“It is changing by the day and not for the better,” said Hank Phillips, president and CEO of the Kentucky Travel Industry Association. “I would say the job loss is significant. The occupancy rate is precipitous.”
With no hotel rooms to clean and no guests to check in, hotels have either had to dramatically slash work hours or lay people off, Phillips said.
“The only hotel that I have talked to that is doing OK business is on Interstate 75,” Phillips said. “And that’s largely due to Canadians who are trying to get home.”
It’s worse in Lexington and Louisville, but the drop in hotel bookings has occurred statewide, Phillips said.
The American Hotel and Lodging Association said last week that nationwide it estimates more than 4 million hotel jobs have already been eliminated based on near record-low hotel stays.
Kentucky has more than 16,000 direct-hotel jobs, according to the association. About 44 percent of those jobs — 7,377 positions — either have already or will be eliminated due to low occupancy rates over the coming months.
“With travel stopping, with most events and meetings canceled, it’s devastating,” Phillips said.
In just one week in March, Lexington hotel occupancy was down almost 30 percent.
“We just received our Smith Travel Report for Fayette Country properties for the week of March 8-14 that states an overall weekly occupancy rate of 44.8%,” said Mary Quinn Ramer, president and CEO of VisitLex, Fayette County’s tourism bureau. “This is down 29.7% from that same time period last year.”
And it’s about to get worse.
Lexington has had 65 large groups cancel since March 9
In Fayette County, April and May are two of the busiest months of the year, hotel managers have previously said. That’s largely due to Keeneland’s spring meet in April, University of Kentucky regional sports tournaments and May graduation. Those events have been postponed or canceled.
Since March 9, VisitLex, which books many larger group events in Lexington, has had 65 large groups cancel meetings from March 12 until the end of June. Some have agreed to re-book sometime in the fall. Others have not yet or cannot re-book.
That’s a loss of 34,000 hotel stays, Ramer said.
“The direct economic impact is $7.5 million,” Ramer said. That includes the room fees and lost food and beverage revenue. Unfortunately, larger group cancellations will likely continue in the coming weeks.
No hotel in Lexington has had to close, Ramer said. Yet.
“Everything is on the table,” Ramer said. “We have hotels that are operating on skeleton staff. It’s mostly senior management. We have general managers who are changing beds. Every property is handling it differently.”
The U.S. Department of Labor has told states not to release unemployment numbers, a move that has angered many as it hinders reactions by states, cities and counties to job losses. It’s also not clear if hotel industry estimates are accurate.
Gov. Andy Beshear said Sunday that unemployment applications are up 30 times what they were a year ago. Prior to the coronavirus-related closings, state officials have previously said they typically received 2,000 unemployment applications a week.
Hotel industry pushes for a federal bailout, relief
Phillips said the hotel industry has asked President Donald Trump’s administration for short-term relief in the form of low-interest loans and other measures to keep the industry afloat and retain hotel workers over the next several months. That relief package has not yet been approved.
Meanwhile, Ramer said hotels and other tourism-related industries can apply for Small Business Administration loans. On its web site, VisitLex has a page dedicated to updates on federal relief packages and other programs to help the tourism industry.
Meanwhile, the industry is also doing what it can to help, she said. Some hotels have offered their rooms if additional space is needed to treat coronavirus-infected patients, Beshear said Sunday. Others are adapting their business models to meet public health needs. Several Kentucky distilleries, for instance, are now producing hand sanitizer.
Ramer and Phillips said the industry will rebound eventually. But there is worry that too many hotels and other tourism-related businesses will have to shutter before travel restrictions are lifted.
“It is very bleak,” Phillips said. “When we have had similar situations in the past, we have always been able to see that with every canceled meeting and every canceled event, it converts to pent-up demand. People will need to meet, businesses will need to travel to sell their product. Families will want to take vacations. The question is: How long until we get to that point?”
