NYC Hotel Employment Down 82% This Year, Survey Says
The New York City hospitality world has been poleaxed by the fallout of the coronavirus pandemic, and a new survey shows just how gloomy the outlook remains.
A Hotel Association of New York City survey of more than 100 hotel owners pointed to an industry grappling with empty rooms, vast jobs losses and plunging revenue.
In the first half of 2020, 4 out of every 5 hotels surveyed experienced a more than 80% drop in net operating income, which “devastated” cash reserves, according to that survey.
In March, when the pandemic hit the city, there were 18,840 full-time hotel employee in the city. But by September, that figure had fallen to 3,329, an 82% drop. Hotels across the five boroughs represent around 9% of the city's employment, per the report.
Many hotels are now in dire straits and want a government-sponsored messaging campaign to fuel confidence in travel and tourism in the city. More than 20% of the respondents have repurposed some of their space as a result of the pandemic. The occupancy rate in the city was at nearly 88% before the crisis, but the rate had dropped by more than 58% in the second quarter of the year.
“The COVID-19 pandemic has been a wrecking ball to the delicate balance of supply and demand in the New York City hotel market,” the report said. “The screeching halt in demand has induced at least 25% of hotels in New York City [to] at least temporarily if not permanently shut down.”
The report says the industry needs a “lifeline”— some 200 hotels had shut, either short-term or for good, as of September, per the association.
In total, there are around 700 hotels in New York City, and the association predicts 20% of the city’s 124,000 hotel rooms won't reopen after the pandemic subsides.
“The COVID-19 pandemic has accelerated the need for a robust reform of business practices for both public health safety and a sustainable recovery of the hard-hit hotel industry in the City of New York in the context of global disruption,” the report states.
Multiple big-name hotels have already announced their closures. The Hilton Times Square, The W Hotel Downtown, The Roosevelt and Midtown’s the Maxwell and Omni Berkshire hotels have all announced they will close in recent months.
Those that have held on have had to make drastic staff cuts, many of which were initially temporary, but became permanent as the crisis wore on.
Still, the market was so heavily oversupplied before the crisis, those operations that are trying to cling on expect they will be well-placed to survive in a post-pandemic environment.
“I have employees who’ve been with me for 30 years, I want to get them back to work,” John Fitzpatrick, who owns and runs the Fitzpatrick Manhattan and The Fitzpatrick Grand Central, told Bisnow this summer. “I feel that if I get to the other side, there will be a lot less hotels.”
Getting there remains a challenge. The city is grappling with rising cases and Gov. Andrew Cuomo has said he will order indoor dining to close if the virus keeps spreading. Meanwhile, a recent report suggested tourism will not return to its pre-pandemic levels until 2025 after reaching a record 66 million visitors in 2019.
"There is a total absence of financial support or aid from any government," Hotel Association of New York City CEO Vijay Dandapani told Bisnow, adding that quarantine requirements for out-of-state visitors to New York state has further killed demand. "The first iteration of the PPP got us nothing."