Essay Example on U.S. Hospitality Industry Hit Hardest by COVID-19 Crisis

Almost every industry in the world has been affected by the COVID-19 crisis. The tourism and hospitality industries are however hardest hit by the crisis losing billions of dollars. In the United States, it is expected that all sectors related to tourism such as restaurants, lodgings, attraction sites, transport, and retail would decline by 78%.

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Since early March 2020, the hospitality industry in the United States continues to receive heft financial losses that might linger for years. According to statistics reported by HotStats on hotel, the Gross operating profit per available room (GOPPAR) went down to $-12.71 from 110.6 % YOY. HotStats reported that the march 2020 reports were the first worst seen since its charting in the United States.

The COVID-19 pandemic has far worse detrimental impact than the 2008 recession, 9/11 and the SARS crisis to the tourism and hospitality industries. OAG Aviation Worldwide reports that the COVID-19 pandemic has forced flight and foreign visits cancellation causing a decline in tour and travel. As a result, the airline industry globally incurred losses of about $ 880 billion as many hotel and leisure centres continue to remain deserted.

In the United States, hotels have reported cancellation of individual and group reservations and major events. The lockdown, travel restriction, and social distancing rules are all implemented as a way to curb the virus spread but have a hefty economic recession impact. Lockdowns in major cities have resulted in the hospitality slowdown.

In the United States, the travel industry is bound to experience a $910 billion loss which is seven times more compared to the 9/11 crisis. U.S. Travel Association CEO Roger Dow explained that the COVID-19 crisis is bound to hit hard and fast putting at risk over 1.5 million travel jobs. The travel industry in the United States holds approximately 15.8 million jobs and as the pandemic hits, unemployment rates increase will be reported. The tourism reliant destination such as California, Connecticut, Utah, Nevada, Hawaii, and New Jersey are reporting a swift economic decline due to the lockdown and travel restrictions.

It is difficult to give a conclusive report of the pandemic economic losses since economic changes are experienced daily as the COVID-19 cases continue to grow. However, the World Travel and Tourism Council predicted that more financial losses are to be experienced and jobs will be lost. The U.S. Travel Association listed in their projections that by May there will be 4.6 jobs lost, the number will increase as the travel restriction, and lockdowns extend.

In the United States, President Donald Trump continues to impose travel limits and social gathering restrictions. The hospitality industry is in fear the restrictions might hit the summer holiday. The director of the Commerce Department's National Tourism Office Isabel Hill has raised concerns since the spring-summer season brings in huge profits into the tourism and hospitality industry and if the restriction proceeds it will be a huge blow to the industry.

Due to the prolonged travel restrictions and possible economic recession the International Air Transport Association (IATA) has projected that the air travel industry profits could plunge to $252 billion, which is, a 44% drop compared to 2019 statistics. It was reported earlier in the year that the United Airlines and delta had less than two months of saving before the COVID-19 crisis hit. With the flights restricted from flying, the losses are expected to rise to $250 billion.

Companies such as FedEx, JetBlue, and UPS, which represent American projects, expressed concerns that its shareholders might lose over $87 billion in profits in 2020. Due to the huge losses expected, the government in the United States is giving airlines stimulus packages reserved in case of distress. The packages are aimed at keeping the industry running, keep employees paid and to prevent the companies from collapse.

The hotel and hospitality industry is affected by the pandemic equally as the travel business. In the United States, the hotel industry is affected differently. Large-scale hotels hat host major events are the highest affected and hotels in urban areas and resorts. Big hospitality companies such as the Marriott have registered a 75% loss and are seeking to benefit from relief packages.

The hotel industry employs about 4% of the United States population, which is around 8.3 million people. Due to the lockdowns, travel restriction, and the socials distancing rule there are no visitors, and employees have been suspended while others have incurred reduced working hours and reduced pay. If the pandemic persists and the restriction is prolonged sustaining employees will be a problem and many will end up unemployed.

Since the pandemic duration of existence cannot be estimated, the tourism and hospitality industry need to rely on government relief packages to sustain its employees. The governments can also give tax relief for a certain period to the industry to reduce revenue loss. The hospitality industry needs to come together and show their commitments to society. They can offer their venues as quarantine centres and places of rest for hospital employees.

Conclusion

It is also a time to bring onboard new business models and opportunities that include human capital sharing channels, new service delivery approaches, review social media plans, security plans, and reviewing operation procedures policies and standards. Rather than suspending employees, they can use this opportunity to train and cross-train staff for new roles. Deep cleaning and maintenances can also be taken up.