Best Western CEO Sees Hospitality Industry’s Future as ‘Really Bad’

According to Best Western International Inc. CEO David Kong, the damage to the hotel industry is pretty brutal.

Kong has said, “This situation we are in now, it’s not sustainable. It’s really bad.”

According to the American Hotel & Lodging Association, around 38,000 of the nation’s 57,000 hotels will close within six months without further government assistance.

The COVID-19 pandemic has a detrimental impact on travel, tourism, and hospitality. Millions of workers in the hotel and motel industry remain unemployed while many establishments struggle to keep their doors open.

According to the Labor Department, the hospitality sector saw 9.1 million layoffs from March to August. 4.9 million workers have been called back but 4.2 million are still displaced workers.

“It’s really hard to say when a recovery is going to be. This situation we are in now, it’s not sustainable. It’s really bad,” Kong said to CNBC in a phone interview. “As people use up all their savings and reserves, they’re going to default on their loans. And then what?”

The next round of funding from the government is still in discussions as the Trump Administration attempts to put forth a package.

“You’ve got a lot of pressure on cash flow, and you can only do so much with eliminating expenses and cutting people,” Kong said. “You still need revenue.”

Some hospitality-related businesses have taken advantage of Main Street loans. “Liquidity is the key here,” Kong said. “The Main Street lending program needs to help out more. The guidelines were very restrictive. Most hotels can’t avail themselves to the that, which is a shame.”

Kong has said, “The job situation is just absolutely horrible. You’re talking about people that worked 25-30 years in our industry who are laid off. There’s no safety net, no insurance. Hotels are the heart and soul of any community, and hotels are small businesses. These are hard-working people trying to make an honest living.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.