NEW YORK, Jan. 2 (Xinhua) — U.S. hotel owners are bracing for a difficult 2021, as the sector continues to reel from a historic drop in bookings caused by the COVID-19 pandemic, reported The Wall Street Journal (WSJ) on Saturday.
“The start of COVID-19 vaccinations in the U.S. and Europe raised the prospect that people would start traveling again and sent shares in hotel owners and operators soaring, but investors and analysts say bookings will take years to rise back to pre-pandemic levels,” said the report.
Meanwhile, the industry faces growing financial stress as property owners struggle to pay their mortgage bills, wages and other expenses, it added.
“Despite the record drop in bookings, many U.S. hotels have been able to stay open thanks to debt relief from banks and temporary government aid like the Paycheck Protection Program. Now some lenders are starting to lose patience, which could lead to an increase in foreclosures and distressed-property sales in the first half of 2021,” brokers and investors were quoted as saying.
In a November report, S&P Global Ratings estimated that revenue per available hotel room fell by 50 percent in the United States in 2020. The ratings agency expects revenue to pick up in 2021, but estimates that it will still be 20 to 30 percent lower than in 2019. It doesn’t expect revenues to fully recover before 2023.
“Business travel is a particular concern. While some analysts expect tourism to resume at an almost-normal pace by the second half of 2021 in many places, cost cutting and the rising popularity of virtual meetings could mean fewer corporate credit cards will be swiped at hotels for the foreseeable future,” said the WSJ report.
Outside of business-travel hot spots and big conference hotels, the outlook is less bleak. Millions of Americans who have been mostly confined to their homes for the better part of a year are itching to travel again.
The paper quoted analysts as saying that “they expect a surge in bookings in popular leisure-travel destinations like Miami or San Diego once vaccines are widely available and people feel safe.”
However, three weeks into the most ambitious vaccination campaign in modern U.S. history, far fewer people than expected are being immunized against COVID-19 as the process moves slower than officials had projected and has been beset by confusion and disorganization in many states, said WSJ in another report on Saturday.
“As a result, the federal government came nowhere close to vaccinating 20 million people by the end of 2020, as it had promised,” said the report. Of the more than 12 million doses of vaccines from Moderna and Pfizer and BioNTech that have been shipped, only 2.8 million have been administered.
Confirmed COVID-19 cases in the United States topped 20 million on Friday as the discovery of a highly contagious new virus strain in the country increases pressure to speed up the vaccination process.
The United States reported over 20.1 million cases and more than 347,000 related deaths Friday afternoon, according to a tally from Johns Hopkins University.
The country, which makes up about 4 percent of the world’s population, now accounts for nearly one-quarter of over 83.8 million cases and 19 percent of 1.8 million deaths reported worldwide, showed the university’s data.