Congress signed off on a $2 trillion coronavirus stimulus bill on Friday that provides aid to individuals, small businesses, and large corporations — including America’s airlines, which will get billions in direct grants in exchange for giving the federal government stakes.
The plight of airlines commands much focus, as their businesses have all but come to a stand-still amid the coronavirus pandemic. But a vast number of the nation’s small businesses as well as larger hotel chains are fighting for survival, too.
The hotel sector was among the first to feel economic pain. In mid-March the world’s largest hotel company, Marriott International Inc. (MAR), furloughed ten of thousands of workers with Hilton (HLT) and Hyatt (H) following suit.
CBS Travel Editor Peter Greenberg forecasts a grim future for hotel chains, telling Yahoo Finance’s On The Move on Thursday that many will “go under.”
They’re “hurting big-time,” Greenberg said, noting that they’re not just suffering from the loss of individual travelers. “It's meetings and conventions. There's a reason why the New York Hilton is closed. It's closed because they make most of their money from meetings and conventions, and those book two to three years out. Well, they've all canceled. Even if they've postponed, they may not postpone for this year. It slides into next year — a lot of revenue that's missing.”
Canceled conventions and conferences spell disaster for small businesses connected to the events. “They're operating on small margins to begin with,” he noted.
‘Small businesses will fail’
A staggering number of ancillary travel and tourism jobs, dependent on a traveling public, will be lost, according to Greenberg. “While Trump is bailing out the airlines, the small businesses in America will fail and this will not be trickle down — it will be tumble down,” he said.
The ripple effects of the global shutdown extend far and wide, he said, and include restaurants, spas, resorts, Uber (UBER) and limo drivers, tour bus operators, theme parks, and retail shops. Nobody in the travel sphere is unscathed, he warned.
According to government statistics, the U.S. travel and tourism industry generated over $1.6 trillion in economic output in 2017, supporting 7.8 million U.S. jobs. That same year it accounted for 2.8% of GDP.
“Travel represents one in every 10 jobs in the world,” Greenberg said. “When you put that all into perspective on a global scale, we're talking about 75 million jobs in the travel and tourism industry that are currently at risk.”
To be sure, the bailout package passed on Friday includes aid for small businesses, including $350 billion in loans that can be forgiven if they’re used to meet payroll and other expenses — and if businesses keep workers on their payroll through June.
Yvette Killian is a producer for Yahoo Finance’s On The Move.