More than 8,000 U.S. hotels could be forced to close in September, thanks to Covid-19, warns Chip Rogers, ceo, American Hotel & Lodging Association.
“If business travel doesn’t pick up by this fall, and the PPP funding has run out, then the really bad problem that exists today is going to result in massive foreclosures for hotels,” Rogers says.
AHLA says only 20% of hotels have received any debt relief from Commercial Mortgage-Backed Security lenders on Wall Street.
Rogers is asking Congress to step in and help before it’s too late. “Give them a low interest loan, give them something where they can just stay afloat because that is all they are asking for,” Rogers says.
U.S. hotel transactions are down 74% year-over-year for the months of March to May, according to the latest Hotel Transaction Almanac produced by STR’s Consulting and Analytics office and CoStar Group. May represented the largest decline in the total volume of hotel deals, falling 94% compared to last year.
According to STR, only 68 assets representing a combined total of $112 million were sold in the month of May, compared to 329 hotels worth $1.8 billion in May 2019. The number of transactions will likely begin to rebound as investors look for distressed inventory, according to the report.
Since mid-February, U.S. properties have lost more than $40 billion in room revenue, according to the AHLA. Hotels across the country are on track to lose more than $400 million in room revenue per day due to COVID-19, which equates to losses of $2.8 billion weekly.
In June, Hilton let go 22 percent of its corporate workforce and Marriott International announced that the furloughs and reduced work schedules that were implemented in April will be extended until Oct. 2. A number of corporate Marriott positions are also expected to be eliminated later this year. The hotelier said it does not except to return to prior levels of business until beyond 2021.