Coronavirus and Meetings
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Updated March 24, 2020, at 4:00 p.m. EDT
The outlook has gotten considerably worse over the past week: Decreased travel due to the coronavirus outbreak could equate to a $910 billion economic hit to the U.S. economy and the loss of 5.9 million travel-related jobs in this country by the end of April, according to a newly revised analysis prepared by Tourism Economics and released by the U.S. Travel Association. Last week's analysis projected a revenue loss of $809 billion this year and 4.6 million travel-related job losses before May. These estimated losses are severe enough to push the United States into a protracted recession, lasting at least three quarters, with a low point occurring in the second quarter of 2020. This is assuming that day-to-day business begins a return to normalcy in June, which would follow a pattern roughly similar to the course COVID-19 has taken in China.
According to the latest analysis, the expected $910 billion in economic losses would be seven times the impact of 9/11. The effects already felt by the hotel industry alone are staggering -- the outbreak "has already had a more severe impact on the hotel industry than 9/11 and the 2008 recession combined," according to Chip Rogers, president and CEO of the American Hotel and Lodging Association. Rogers, together with U.S. Travel Association president and CEO Roger Dow and a number of hotel company CEOs, held a media briefing last week following White House meetings in which they requested federal relief.
"The coronavirus crisis is hitting the travel economy hard, and it's also hitting fast," said U.S. Travel Association president and CEO Roger Dow. "These new figures underscore the extreme urgency of financial relief for travel businesses — 83 percent of which are small businesses—so they can keep paying their employees. Not only are workers suffering right now, but if employers are forced to close their doors, it is unknown when or if those jobs will ever come back."
The estimated 5.9 million travel-related job losses would more than double the current U.S. unemployment rate on their own, pushing the rate from 3.5 percent up to 7.1 percent by the end of next month.
Hotel owners, the vast majority of which are small-business operators, need aid quickly, Rogers pointed out last week. "We have to make sure that hotel owners who right now have zero occupancy can make their mortgage payments," Rogers said, in addition to ensuring they can retain as many employees as is feasible.
Industry leaders requested $150 billion in immediate federal relief for the hotel industry and an additional $100 billion for travel-related businesses like retail shops, attractions and restaurants. U.S. airlines are looking for $58 billion in relief.
"It sounds like a big number," said Dow, "but in contrast to what can be lost and what's a stake in the U.S. economy, it’s a necessary number."
Based on the latest calculations, fast action is even more crucial. The travel industry supports 15.8 million jobs in the U.S., representing employment for one out of every 10 Americans. "The health crisis deserves the government's full attention, but the economic crisis will be worse and longer without aggressive action to confront it right now," Dow said.
According to Dow and Rogers, the relief funds would most importantly serve two purposes: to cover wages, or at least some percentage of them, for front-line workers, who otherwise would be collecting unemployment; and to provide enough liquidity for travel business owners to stay afloat. "Businesses can't keep their lights on if they don't have any customers, and they don't have any customers because of the actions that are necessary to stem the spread of coronavirus," Dow added. "The resulting closures will take the greatest toll on the front-line employees who can least afford to lose their jobs — wait staff, housekeepers, concession workers and more.
"This situation is completely without precedent," Dow added. "For the sake of the economy's long-term health, employers and employees need relief now from this disaster that was created by circumstances completely out of their control.
"We're witnessing the shutdown of travel," Dow continued. "The economic effects of that are already disastrous, but could become worse and permanent unless the government acts now."