Local Travel Industry Takes Huge Hits from Virus
YOUNGSTOWN, Ohio – The economic impact caused by the coronavirus pandemic is wreaking havoc with businesses worldwide, but the weight of job loss is crushing the travel industry and could be catastrophic to the sector in Trumbull and Mahoning counties.
“There are no words to describe the effect and how quickly things went from normal to, ‘Oh my goodness,’ single-digit occupancy rates. No one could have prepared for this. This is unprecedented, unlike anything we’ve ever seen,” says Linda Macala, director for Mahoning County Convention and Visitors Bureau.
Beth Kotwis Carmichael, director of the Trumbull County Tourism Bureau, says the economic impact of travel to the local economy is sometimes overlooked because people think of tourism as a trip or staying at a hotel and don’t understand the broad definition. Besides the hotel industry, tourism takes into account the food and beverage industry, outdoor recreation, retail shopping and transportation.
Last year, Mahoning County’s tourism industry brought in $565 million while the economic impact in Trumbull County was $550 million.
The devastation began with the discouragement of travel, the suspension of dine-in service at bars and restaurants and the banning large gatherings, which included entertainment events. And now, with Gov. Mike DeWine’s stay-at-home order, massive layoffs are crippling hotels, including the temporary shutdown of the Hampton Inn & Suites at the Eastwood Mall Complex in Niles and the Country Inn & Suites on Interstate Boulevard in Austintown.
“The temporary closure is expected to last anywhere from three weeks to 60 days,” says Carrie Plecko, general manager of Hampton Inn & Suites.
She says existing guests are shifting to nearby Residence Inn, which is also part of the Hilton Hotels & Resorts group. Most workers at Hampton Inn were furloughed as of Monday. The hotel employs between 23 and 30, depending on the season. Residence Inn, she adds, is operating with a reduced staff.
Plecko said all perishable food was donated to the Warren Family Mission and that Hilton has an online portal to help furloughed employees find jobs with partner companies.
Macala said the 65-room Country Inn & Suites also was temporarily closing, but had no further details. A note on the door said security measures had been enacted and the hotel is closed until April 4, which a hotel representative said is subject to change.
“This decision does not come lightly and we apologize for any inconvenience this may cause,” the note reads. “We have worked with the Sleep Inn and they have agreed to give a discount to our guests, please ask for the Country Inn and Suite’s rate.”
Nationwide, the hotel industry supports nearly 8.3 million jobs total between direct hotel operations, guest spending and its supply chain, according to the American Hotel and Lodging Association.
Since the coronavirus started to spread, the hotel industry has or will cut 3.9 million total jobs. In Ohio, 18,669 direct hotel-related jobs have been lost, as well as 78,512 jobs that support the hotel industry, according to the association.
“Some hotels have just two people working seven days a week. You can’t keep that up for too long,” Carmichael says.
At Holiday Inn Boardman, owner Mike Moliterno says what was once a staff of 85 is now down to 10. Three of the five floors at the hotel are closed. “This has been horrific,” he says.
Moliterno says the hotel is operating with a skeleton crew.
The hotel tried offering carryout service, but that only lasted two weeks. “We’ve given up that fight. It just wasn’t worth it,” he says.
Moliterno adds that he and the staff are taking it day by day.
“The unknown is always so scary, and you don’t know when it will be over,” says the Mahoning tourism bureau’s Macala. “I would be lying if I said I wasn’t fearful.”
One of the largest hotels in Trumbull County, Avalon Resort & Spa is open, but only operating part of its first floor, says employee Toni Cameron.
An employee at Courtyard by Marriott in Canfield says only two of 110 rooms are occupied.
Richard Patel, a partner in Days Inn in Niles said the 70-room hotel only has 10% to 12% occupancy.
“We’re trying our best to keep employees working. It’s a matter of time and it’s hard to say what will happen next,” Patel says. “They have families and bills to pay.”
An employee America’s Best Value Inn in North Lima says occupancy is down and all employees’ hours have been cut.
And in Cleveland, one of the city’s landmark hotels, Westin Cleveland Downtown, has temporarily closed, furloughing 256 employees. “We do not know what the future will hold at this juncture,” said hotel executive Shanti E. Dickinson in a letter to state and city officials.
Nationwide, the hotel industry supports 8.3 million direct and indirect jobs, accounting for $97 billion in wages and salary income. These jobs contribute $660 billion to U.S. gross domestic product, according to the American Hotel and Lodging Association. The industry includes 33,000 small businesses, which make up 61% of hotel properties nationwide, finds an Oxford Economic Study commissioned by the association.
Since the COVID-19 pandemic began escalating in the United States in mid-February, hotels already have lost more than $5 billion in room revenue. This figure is rapidly accelerating with hotels currently on pace to collectively lose more than $500 million in room revenue per day,based on current and future reported occupancy rates.
Holiday Inn Boardman’s Moliterno says he has been through severe setbacks with 9/11 and the Great Recession. He;s banking on that experience to get through this crisis, but admits he is nervous.
“The losses we’re looking at daily, we’re looking to see what we need to do to survive,” he says. “We’ll get through it.”
What the tourism bureaus will have to get through is the loss in revenue they rely on to exist.
Trumbull County’s Tourism Bureau received approximately $350,000 last year in revenue from bed taxes collected from hotel fees.
Mahoning County’s bed tax brought in nearly $1.65 million. The Convention and Visitors Bureau receives one-third of that and the Western Reserve Port Authority gets two-thirds.
John Moliterno, executive director of Western Reserve Port Authority, says the bed tax is a large portion of the organization’s funding.
“It’s only a portion of our revenue from a variety of sources because of the airport through state and [Federal Aviation Administration] grants. We’re fortunate it’s not our only revenue source,” he says. “It pales in comparison to the tourism bureaus. I’m more concerned with their well-being. We’ll find other ways to generate revenue.”
WRPA operates the Youngstown-Warren Regional Airport in Vienna Township, and is responsible for its upkeep, maintaining the runway and cutting grass areas on the 1,500 acres. John Moliterno says one maintenance worker has been laid off since the virus outbreak began.
Outreach efforts are still being made to companies despite the uncertainty caused by the global outbreak, John Moliterno says. The port authority is working with General Motors-LG Chem on their joint venture $2.3 billion battery plant in Lordstown. Plans are still on track to break ground sometime in June at the site, next to the former GM Assembly Complex, now owned by Lordstown Motors Corp.
“It is my understanding at this point that their timeline has not been disrupted,” he says.
Citing the Ohio Travel Association, Macala says the economic impact of COVID-19 is projected to be six times as great as 9/11’s impact.
In the Great Recession, hotel occupancy dropped to 54% nationwide and 470,000 workers lost their jobs, according to the association. In the coronavirus pandemic, room occupancy has dropped to 25% and between 2.6 million to 3.4 million jobs have been lost with more projected through July.
The CARES Act provides assistance for the hospitality industry, including $377 billion in loans and loan forgiveness for small businesses in the sector.
Pictured: Country Inn & Suites in Austintown is among the local hotels that have temporarily as a result of the stay-at-home order.
Copyright 2022 The Business Journal, Youngstown, Ohio.