Marriott started furloughs and hotel closures yesterday (read more here), and now Hilton CEO has informed the White House that they expect to close most US city hotels.
The occupancy rates have plummeted as the travel has come close to a complete halt due to the coronavirus (COVID-19) pandemic.
You can access Hilton’s info page coronavirus here.
Here’s an excerpt what Bloomberg reported (access their piece here):
Hilton Worldwide Holdings Inc. plans to close most of its hotels in major U.S. cities, Chief Executive Officer Christopher Nassetta said at a meeting with President Trump at the White House on Tuesday.
Nassetta, whose company has already begun to temporarily shutter namesake properties in New York and Washington, said occupancy rates could fall to 10% globally as world governments seek to halt the spread of the novel coronavirus.
The outbreak has hit the industry in a “devastating way,” Nassetta said, adding that occupancy rates in major U.S. cities were “running in the single digits.”
Hilton already closed half of its hotels in China:
Here’s what is happening with Marriott:
Hotels tend to stay open as long as they can cover variable expenses, which they can bring down by closing floors and combining F&B outlets.
When the occupancy rates are hovering in the low single digits, and the situation may last for some time, it is financially responsible to shut down the property.
All the hotels are facing this unprecedented shock. We’ll see all chains to close many, if not most, of their hotels for a while in North America.