Even before Gov. David Ige called Tuesday for a 30-day pause in travel to Hawaii, the state’s No. 1 industry was reeling from the impact of the coronavirus outbreak and seeking government relief.
The U.S. Travel Association released new analysis on Tuesday projecting that decreased travel due to COVID-19 this year could result in an $809 billion hit to the U.S. economy and eliminate 4.6 million travel-related jobs. Additionally, travel spending alone this year is projected to fall 31% or $355 billion — more than six times the impact of 9/11.
The dire impacts, as outlined in the Tourism Economics study prepared for the U.S. Travel Association, would be enough to double the U.S. unemployment rate and push the U.S. into a recession.
U.S. Travel Association President and CEO Roger Dow presented the results Tuesday at a White House meeting with President Donald Trump, Vice President Mike Pence, Commerce Secretary Wilbur Ross and other travel leaders. During the meeting, he urged the administration to consider $150 billion in relief for the broader travel sector, including: establishing a travel workforce stabilization fund, providing an emergency liquidity facility for travel businesses, and optimizing and modifying Small Business Administration loan programs.
“The health crisis has rightly occupied the public’s and government’s attention, but a resulting catastrophe for employers and employees is already here and going to get worse,” Dow said Tuesday. “Travel-related businesses employ 15.8 million Americans, and if they can’t afford to keep their lights on, they can’t afford to keep paying their employees. Without aggressive and immediate disaster relief steps, the recovery phase is going to be much longer and more difficult, and the lower rungs of the economic ladder are going to feel the worst of it.”
The American Hotel &Lodging Association, along with CEOs from Best Western, Choice Hotels, Hilton, Hyatt, InterContinental Hotels Group, Marriott, MGM, Pebblebrook, Universal, and The Walt Disney Co., were also part of Tuesday’s White House travel discussion. They wanted assistance in retaining and rehiring employees and keeping hotels from shutting down through access to liquidity and low interest loans, including for small businesses.
Arne Sorenson, president and CEO of Marriott International, a major Hawaii hotel employer, issued the following statement, “The COVID-19 pandemic has resulted in an unprecedented decline in demand impacting our hotels and our associates. We are looking to government to support the hospitality industry through this period of time so we can assist our associates and hotel owners, many of whom are small businesses.”
Marriott already is moving to place tens of thousands of employees on furlough due to significantly dropping demand. Workers won’t be paid during the leave, but the company said that they will keep their health benefits and continue to be eligible for company-paid free short-term disability.
Airlines for America, the nation’s airline industry trade group, also is calling for immediate assistance — grants, loans and tax relief — in an economic climate that it says has grown unsustainable and is getting worse by the day.
Hawaii’s largest domestic carrier, United Airlines, announced Monday that it would cut approximately 50% of its capacity for April and May. On Friday, Delta Air Lines announced a 40% schedule reduction. And the list, which also includes Asiana Airlines and Korean Airlines, goes on.
Peter Ingram, CEO and president of Hawaii’s biggest carrier, Hawaiian Airlines, sent a message Monday to HawaiianMiles members that the carrier will make 15% to 20% cuts to its systemwide capacity in April and May. On Tuesday, it announced it would make a new cut with the temporary suspension of its thrice-weekly nonstop service between Honolulu’s Daniel K. Inouye International Airport and Sapporo’s New Chitose Airport from April 2 through July 18.
Alaska Airlines also announced that it will deepen previously announced flight reductions and institute a hiring freeze among other cost containment steps. The carrier now plans to immediately reduce systemwide capacity for April by 10% and another 15% for May.