By Jeffry Bartash, MarketWatch
Nicholas Kamm/AFP via Getty Images
Hotels and restaurants shed just over a half-million workers when the Great Recession battered the U.S. economy in 2008 and 2009, yet even those dark days for the hospitality industry pale in comparison to the destruction wrought by the coronavirus in less than two months.
In March alone, the pandemic officially cost hotels and restaurants almost as many jobs as the Great Recession — and it doesn’t even come close to telling the full story. Millions of additional workers have been laid off or sent home since then.
The unprecedented scale and speed of the devastation is sure to leave lasting scars, analysts say, and it could be years before the hospitality business fully recovers. Even then, the industry will still need a helping hand from government while widespread and costly changes that weigh on sales and profits will be necessary to lure back customers.
“The severity of this pandemic has made it clear that restaurants will remain closed — or severely curtailed in service — for far longer than originally anticipated,” Sean Kennedy, executive vice president of the National Restaurant Association wrote to Congress last week in a plea for more aid .
“Once ‘normal’ operations resume, virtually every restaurant in this country, from the favorite diner to the local icon, will be a virtual startup in desperate need of cash,” he said.
Record job losses
In March the number of people working at hotels, restaurants and bars plummeted by 446,000, according to the government’s most recent employment survey. The report was largely completed earlier in March before the true nature of the crisis became clear and many companies in the hospitality business were forced to temporarily shut down.
Unofficial estimates suggest the job losses are far higher, almost incomprehensibly so.
Restaurants by themselves may have already slashed employment by 25% and possibly as much as 50%. The NRA, a trade group in Washington, D.C., estimates the industry shed some 3 million jobs in the first three weeks of March. Some 70% of respondents said they had laid off workers or cut hours and half expected to make more reductions in April.
Hotels, for their part, have suffered from an harrowing plunge in bookings. Occupancy rates tumbled to 22% in early April, industry tracker STR said . By contrast, occupancy stood near a record high of 66% one year ago.
With most of the states on lockdown and the economy frozen, the job losses continue to pile up. Up to 60% of all hotel and restaurant jobs are at risk, according to recent studies.