In the age of COVID, numerous operating costs have decreased, as hoteliers have done all they can to reduce expenses to help offset the extreme reduction in revenue.
A devastating $155 billion looks set to be lost from the U.S. economy due to the collapse of international travel during 2020, according to latest research conducted by the World Travel & Tourism Council (WTTC).
As a result of COVID-19, hotel operators have been forced to make tough decisions, including the most basic one on whether to keep the lights on. Many were required to close their doors after municipal mandates were put in place and some decided to remain open, despite record-low occupancy levels, to house pandemic-related first responders and other essential personnel related to the fallout from the spread of coronavirus, largely in place of more traditional sources of demand during "normal times".
AMERICAN HOTEL AND LODGING ASSOCIATION PRESIDENT AND CEO CHIP ROGERS: - "With a sharp decline in travel demand, nine times worse than September 11 and with lower room occupancy than during the Great Depression, our small business owners are struggling to survive. The human toll on our industry has been equally as devastating. Right now, many hotels are struggling to service their debt and keep their lights on, especially those with Commercial Mortgage-Backed Securities (CMBS) loans as they have been unable to obtain urgently-needed debt relief. Without action to shore up commercial debt, especially CMBS loans, the hotel industry will experience mass foreclosures and permanent job losses which will snowball into a larger commercial real estate crisis impacting other segments of the economy."
Eldorado Resorts, Inc. (NASDAQ: ERI) ("Eldorado," "Eldorado Resorts" or the "Company") announced today that the Federal Trade Commission (the "FTC") has accepted a proposed consent order, which concludes the FTC's Hart-Scott-Rodino review of Eldorado's pending merger (the "Merger") with Caesars Entertainment Corporation (NASDAQ: CZR) ("Caesars"). The FTC's acceptance of the consent order satisfies all required antitrust clearances for the Merger.
The COVID-19 pandemic has placed at risk the substantial investment of state and local governments in the tourism and hospitality industries. Publicly funded destination marketing organizations ("DMOs"), tourism agencies, and convention centers face budget shortfalls, staffing reductions, and growing financial uncertainty. Targeted federal aid is urgently needed to support DMOs, tourism agencies, and convention centers whose work is critical to the recovery of vital sectors of the US economy.
With the advent of the COVID-19 pandemic in the U.S. in early to mid-March 2020, hotel owners and managers watched demand for their rooms suddenly evaporate. Since then, tough decisions have been made regarding whether to remain open or temporarily suspend operations. Hotels that have temporarily suspended operations now need to decide when to reopen. This article addresses the considerations to be weighed in this process and provides one example of the calculus for a hypothetical hotel.
A recently published article by several of my colleagues at HVS forecasts the expected pattern of decline, and the subsequent recovery, in the market value of hotels in the United States under "best case," "most likely case," and "worst case" scenarios. And while they further acknowledge a variety of factors that will also influence the ultimate value impact realized by a hotel under each of these scenarios, the decline in asset value under the "most likely" scenario is expected to average 26% in 2020, with 2019 market values not being fully recovered until 2023, at which time they are anticipated to surpass 100% of the 2019 market value.
The American Hotel & Lodging Association (AHLA) released a new report today showing the average small business hotel will require additional funding from SBA loans under the Paycheck Protection Program (PPP) in order to rehire employees or prevent further layoffs and keep their business open. AHLA also sent an urgent letter today to Congress asking for additional funding for SBA loan program and several technical updates to the CARES Act to help these hoteliers keep their doors open and save jobs.
As a result of the current COVID-19 pandemic, the HVS Team has received many questions about when U.S. hotel transaction volume will return to reasonable, pre-pandemic levels. While we do not have a definite answer, as these circumstances are evolving daily, we have tried to use past events to provide some insight on the factors that would affect a possible rebound. We see the anticipated volume declining because of COVID-19.
When it comes to the economic toll from the coronavirus, few sectors have taken a bigger hit than travel.
To receive financial assistance (in the case of air carriers and contractors), or loans and loan guarantees (in the case of other eligible businesses), a company must agree to the following limits (which generally apply during the period of assistance and for one year thereafter) on annual compensation and severance payments for each officer and other employee (other than a unionized employee) whose "total compensation" exceeded $425,000 in 2019 ("CARES Act HCEs"):
MGM Resorts International (NYSE: MGM) today recognized the support of many of its resident entertainment partners who generously donated to the company's Employee Emergency Grant Fund in support of those impacted economically by the coronavirus (COVID-19) pandemic.
As we commence a new quarter in 2020, facing heavy headwinds in the face of the new decade, it is more important than ever to develop a plan to work through this pandemic. There is still so much uncertainty, yet it is our responsibility as business professionals to develop a plan to prepare ourselves for the worst-case scenario.
Less than a month ago, Mitch Patel's hotel business was booming. His company, Vision Hospitality Group, owns 37 hotels in six states and it had seen record business in January and February, according to Patel. Things were going so well, he was planning to open two more hotels this year, and seven next year.
In a video presentation released today, Magnuson Hotels CEO Thomas Magnuson advised hotel owners to weather the current economic downturn by quickly cutting costs.
The losses to the U.S. tourism industry due to the coronavirus are snowballing-make that avalanching-by the day. To the point that the national non-profit organization representing all travel sectors estimates the economic fallout for the country will be seven times worse than 9/11.
Heading into 2020, the hotel sector was expected to slow down, but deals were still getting financed. Then came coronavirus.
Summit Hotel Properties, Inc. (NYSE: INN) (the "Company") today announced that it has taken significant steps to enhance its overall liquidity position in light of the operating and financial effects on the Company due to the COVID-19 (Coronavirus) pandemic.
A wave of layoffs at restaurants, bars and hotels, as efforts to contain the coronavirus pandemic bring much of everyday American life to a halt, could drive new applications for U.S. unemployment benefits to a record 1.5 million or more next week, economists warned on Thursday.