Why U.S. hotel industry could see approximately 4 million jobs wiped out this year
The hotel industry is being crushed by the impact of the coronavirus pandemic. Share prices are experiencing a sharp and steady decline. In the U.S. alone an estimated $1.4B in revenue is disappearing every week. The prediction is if occupancy levels fall by 30% this year, the U.S. hotel industry could lose approximately 4 million jobs. This would send a ripple effect around the world.
Before the coronavirus pandemic the global economy was already growing more slowly than many people wanted. Economic uncertainty was fueled by things such as Brexit, trade disagreements, and political crisis in the Maldives.
For any five-year strategic plan to remain in-tact at this point would be wishful thinking by the management team.
The direction of the Baird/STR Hotel Stock Index is not good news for C-suite executives and hospitality industry shareholders.
The Baird/STR Hotel Stock Index, which serves as a benchmark for the sector’s overall health, has declined over 47% year-to-date.
Global Stimulus Response
A number of travel industries around the world are calling for stimulus packages. The U.S. Congress finalized a historic $2T deal, which includes $25B in grants for the airline industry. In the UK, officials are providing small businesses in hospitality and leisure grants that are worth up to $30,000 as part of its $400B bailout plan.
China, Germany, Italy, and Spain have outlined multibillion-dollar proposals in response to COVID-19. Overall, at least eleven countries have announced stimulus plans along with the European Commission and the IMF.
The infographic below reveals how “BEACH” stocks have lost more than $332 billion in value in just the past month.