Up to 80% of metro Atlanta’s hotel workers have been laid off over COVID-19, experts say
Oct. 22, 2020
ATLANTA — If you know someone who works in the hotel industry, there is a good chance they are out of work right now.
The experts told Channel 2 Action News that 70% to 80% of metro Atlanta’s hotel workforce of more than 100,000 were laid off due to the pandemic.
Experts said without another round of federal help, such as the Paycheck Protection Program or people booking more rooms, many hotels are in danger of closing.
Right now, tens of thousands of metro Atlanta hotel workers are looking for new jobs.
“It was very life-changing, shifting focus from managing a team of 25 plus people to becoming a stay-at-home mom,” said Danielle Derkink.
She worked in the hotel industry for 23 years until the pandemic hit and she lost her job as director of sales, training and effectiveness for Intercontinental Hotels Group.
For Derkink and her family, the toughest part was losing her health insurance for six weeks before COBRA kicked in.
Her two daughters have medical needs. The oldest has arthritis and gets weekly injections of an expensive drug.
“We can’t afford that medication without insurance. It’s about $2,800 a month,” said Derkink.
Her youngest daughter has a condition, which causes weakness and a loss of muscle mass. “Which impacts everything about her and her speech. It’s the ability to eat, the ability to move,” said Derkink. The youngest needs speech, behavioral and occupational therapy to help with her motor skills and communication.
Derkink isn’t alone. She said about 20% of the hotel industry workers she knows lost their jobs, and the other 80% took a pay cut.
“It’s been a struggle. I do know households, for example, where both spouses work in the hotel industry. And if you’re a double-income household with two people who work in the same industry, and you’ve both been impacted, then it’s really hard,” said Derkink.
“I’m hearing numbers anywhere from 70 to 80% of those positions are just gone,” said Georgia Hotel & Lodging Association Executive Director Jim Sprouse.
“And at this point, there is no major event left on the books for the rest of the year,” said Sprouse. Big moneymaking events like Dragon Con, sporting events and conventions are canceled or postponed.
Sprouse said occupancy rates are hovering around 30% for most hotels in or close to the city. It takes 50% occupancy just to pay the bills.
“This is painful. We have never seen anything remotely close to what’s going on in the industry today in terms of it’s just the flat-out absence of demand,” said Mark Woodworth, of hotel consulting firm R.M. Woodworth & Associations.
“I haven’t heard of any permanent closures in Atlanta. The last number I saw was roughly 5% of the hotel inventory,” said Woodworth.
He said metro Atlanta has about 900 hotels, so that would be about 40 to 50 closures.
But with projects like the new Hilton Hotel going up at the old Georgia Dome site, Woodworth said Atlanta is poised to have a bright future.
“When this is all over with, there will be some markets, some property types, some locations that will do better than they otherwise would have had the pandemic never occurred,” said Woodworth.
Derkink is also looking ahead and starting a hotel consulting firm. She is urging employers to give laid-off hotel workers a chance.
“My advice to anyone hiring out there or anyone looking for a job, tap into the talent pool of hospitality individuals because they can do anything,” said Derkink.
When it comes to recovery, experts said the conventional wisdom is that it will be mid-2023 to the end of 2023 before metro Atlanta hotels get back to 2019 levels.
They also said the more expensive a hotel is, the slower that recovery will be.