After months of quarantine and travel restrictions, the hotel industry is quickly becoming another victim to the coronavirus pandemic.
Woodbury Corp. senior vice president of hospitality Guy Woodbury has worked in the hospitality industry since 1989 and currently oversees the operation of 16 hotels, 13 of which are based in Utah. The Hampton Inn and Suites in Orem is overseen by the Woodbury Corp.
When the coronavirus pandemic was first making its way across the nation and into Utah, Woodbury said the hotel industry was in the direct line of fire.
Since the beginning of the year, several large groups that regularly travel to the central Utah area for concerts and conventions simultaneously canceled their reservations as the coronavirus pandemic gripped Italy and took over a cruise ship off the coast of Japan.
Organizations and events that rent out hotel spaces, such as conference rooms or ball rooms, were also canceled. Soon enough, smaller group reservations and individual travelers were also calling off their stays.
“The impacts have been clear across the industry,” he said. “We’ve just been slammed.”
Larger cities, such as Salt Lake City, saw the direct impact of the coronavirus pandemic shutdown first, but cities like Orem and Sandy were not far behind.
By mid-March, he said, Woodbury Corp. was feeling the financial brake slam its pedal against the floor. By April the hotel corporation was making 80% less revenue than the April before.
Even as the economy has begun gradually reopening, Woodbury said the industry has still not made a complete comeback. Even now, he said hotels within the Woodbury Corp. are still making 50% less revenue compared to this time last year.
“The revenue stream has grown, but this industry is one of the few industries that was targeted specifically at the peak of the impact,” Woodbury said.
Throughout his time in the industry, Woodbury said the coronavirus pandemic has impacted the hotel sector like no other incident in American history largely due to travel restrictions.
To offset the impacts of the coronavirus pandemic, the Woodbury Corp. was able to take advantage of the Paycheck Protection Program through the Coronavirus Aid, Relief and Economic Security Act and has since applied for the Safe In Utah Grant to pay for sanitization and personal protective equipment reimbursements.
On Monday, the corporation submitted its application for the Shop In Utah program, which is funded by CARES Act money allocated to the states.
Utah allocated $25 million in individual grants up to $50,000 for businesses in the state. Half of the money businesses receive through the grant are required to be used to provide discounts to customers in an effort to get money circulating throughout the economy once again.
Both programs are required to allocate at least 75% of grant funds to small businesses of 250 or fewer full-time equivalent employees.
“It’s been extremely helpful to have these programs available,” he said. “Although it’s not a big number, everything helps.”
While hotels use state and federal programs to stay afloat, Woodbury said the best the corporation can do is abide by health recommendations to ensure the safety of guests who are still supporting its hotels.
Initially, the precautions were simply higher levels of sanitization with a specific focus on high-touch areas, such as common areas and lobbies. Since then, Woodbury said his hotels have begun taking the temperatures of their employees and requiring masks for all staff.
Some companies, such as Marriott and Hilton hotels across the nation, also are requiring face masks for guests when they are in common areas.
“The message we’re trying to send is that if you can travel, this is a safe place to be,” Woodbury said. “We’re trying to send that message and live that message so that our hotels aren’t places where you’re likely to pick up the coronavirus.”
The rate at which the economy will “bounce back,” Woodbury said, is largely up to how willing residents are to follow local, state and federal guidelines.
Ultimately, a more permanent solution to the nation’s economic woes won’t happen if consumers aren’t more confident in their own health and safety, he said, which won’t happen until there is a vaccine.
For some, however, it might be too late. Economists estimate as many as half of the nation’s hotels may be forced to close after the coronavirus pandemic and economic recession have kept tourists from traveling.
The American Hotel and Lodging Association also has estimated that more than 8,000 hotels nationwide will close their doors permanently in September. The association has sent a letter to Congress asking for further aid to keep hotels afloat, including extending the Paycheck Protection Program.
Woodbury said a mass closure of this magnitude is a double-edged sword. While the hotels that are able to keep their doors open might see a slight increase in business as consumers begin looking for new places to stay, thousands of jobs also would be lost.
“It’s not a healthy thing for our industry,” he said. “When things close, there’s so many people displaced. There’s so much financial impact.”
When a hotel closes, he said, dozens of locally based employees — from reception to room service — are without jobs and larger suppliers lose a significant amount of regular business.
Since February, over 4.8 million employees in the leisure and hospitality sector have lost their jobs, according to the Bureau of Labor Statistics. Additionally, investors and lenders that funded the hotels also take critical hits financially.
“When a hotel closes, it has a pretty big impact on the economy, not just the hotel,” Woodbury said. “It has a pretty big trickle down effect.”
With all of that said, however, Woodbury said there is no doubt in his mind that the hotel industry, as well as the rest of the economy, will outlast the coronavirus pandemic and current economic recession.
“The crystal ball is cloudy as to what exactly the timing is going to be,” he said. “While the sky may have fallen somewhat, or at least it feels that way, we’re going to get through this and we’re going to survive.”
The current setback the industry is facing is temporary, he said. People need and want to travel, and as long as that remains the case, there always will be a place in the economy for the hotel industry.