Mar 17, 2020
Corona Virus or Covid-19 is declared a pandemic. The virus that affected most parts of China is slowly leaving its footprints on other parts of the globe too, making it a pandemic. As this virus is contagious, people are even more cautious to move or work in groups, which is directly affecting the hospitality industry. The hotel markets have gone into a state of emergency because of the virus and this directly hit the room rates and the occupancy levels.
John Lam, Chairman, and CEO of the Lam Group. He is a hotel developer and owner that has a portfolio of about 5,000 rooms in New York, and with many more properties spread across. Mr. Lam, in his viewpoint about the current situation, said, “Right now we have a lot of cancellations coming in.” “We’ve seen vacancies rise to about 30% in our portfolio, and room rates have fallen by as much as 50%.” He also said, “This is worse than 9/11. During 9/11 you still had government employees and the Red Cross coming in and staying at hotels. Now no one is coming to New York.”
In one of his statements, Lam said occupancy rates in his portfolio normally are above 90%. One of his particularly hard hit hotel properties just suffered $300,000 worth of cancellations for March, he said, erasing about a third of its usual monthly revenue. Because of the coronavirus, there is a sharp drop-off in business travels, which has affected many hotel owners and the hospitality industry overall. Mr. Lam notes that his hotels have been affected big time as there is a sharp drop-off in the business travels. Majorly, the whole of Europe and Italy stopped coming to the city.
Another Manhattan hotel owner who is bearing the effects of the coronavirus stated, “The pace of future bookings is off 30% year over year, and we are seeing group cancellations in April through June.” It is observed that many online booking services have advertised huge discounts for many popular hotels in New York.
Another issue that has hit the hospitality industry is the cancellation of several shows. The shows garnered public to the city and this helped the industry in one way. With the withdrawal of these shows, there are thousands of visitors dropping their plans to travel. According to a spokesman, for the large West Side conference facility said that Vision Expo East, 15,000 – person event for the eye care industry, nixed its Javits show at the end of the month. Javits spokesman Tony Sclafani said in his statement, “International travel restrictions played a significant role in the decisions by these event organizers to cancel or postpone their events. The convention center continues to be fully operational, and our staff is working closely with event producers to coordinate the opening of events in the near future.”
With the rapidity the virus is spreading, the damage can be seen. The hospitality industry is seeing an unpredictable loss and recovery of it cannot be predicted too.
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