The COVID-19 Impact on the Hotel Industry
The hospitality industry was perhaps the single most impacted industry in the global economy. Accounting for about 10% of the global GDP, this industry was robust and secure before the COVID-19 outbreak occurred. Now, the road to recovery and survival for many hotels looks bleak. The reason for this significant impact is fairly obvious, one of the first measures countries took when trying to get a handle on the pandemic was travel bans.
Without a steady stream of travelers and tourists to fund their operations, many hotels simply could not cope with the mounting pressures of the pandemic. This caused widespread panic and disarray in the hotel industry, however new policies and safeguards have been continually implemented to subdue this impact.
Ongoing Financial Difficulties
In simple terms, the financial outlook for hotels is highly unfavorable. In these precarious times, hotels are unable to create long-term plans or forecasts to show their potential investors. Getting the necessary funds to stay operational has been near impossible for many hotels. This is why the support of international governments has been essential to their survival.
Things like the CARES Act in the United States has enabled hotels to get much needed funding, without the pressure of high risk loans or unfavorable partnerships. This is a relatively short sighted solution however, as many hotels will ultimately be forced to close if business continues in this trajectory.
Hospitality’s Talent Drain
By nature, hotels hire a wide variety of staff. From experienced hospitality clerks to highly trained chefs or spa professionals, many hotels are brimming with talent in many different areas and fields. This array of staff, which previously contributed to their success, is now a major liability. Many hotels have been unable to keep and maintain their staff, and so layoffs and unemployment in the sector has naturally increased.
As with any specialized professional, many who have lost their employment with hotel companies may seek more stable businesses in the near future. This is similar to a “brain drain”, where hotels are losing their most skilled and experienced staff members to other industries.
Incentivized Technological Adoption
Things aren’t so bleak from all angles however, as this pandemic has incentivized many hotels to look towards technology for solutions. Things like no contact options such as automatic doors, virtual check-ins, and preliminary temperature checks, may soon be more streamlined and widely implemented throughout the hotel industry.
A lot of these technologies have been adopted in immediate response to the COVID-19 pandemic, so it is unknown if they will outlive the current outbreak. However, hotels now have a clear reason and vested interest in preventing the spread of these illnesses. Therefore, their long-term usage is likely to be implemented on some level throughout the industry as a precautionary measure.
The long-term recovery strategy for the hotel industry is still unknown. Their next steps are highly dependent on when the COVID-19 pandemic subsides, which can’t be reliably predicted. In the most likely scenario, multiple hotels and hotel branches are expected to permanently close. Those that do survive, will do so through specialized aid and henceforth focus on revitalizing their talent and adopting more outbreak resistant technology. In addition to this, they will also likely seek to proactively prepare for future outbreaks by securing their financial support.