Impact of COVID-19 on the hospitality industry


Here's our conversation with the CEO of intercontinental hotels group D. for a challenging time for the industry I mean when you think about the impact that the travel restrictions social distancing borders being closed cancellation of conferences meetings and events you know we've never seen an impact the demand for the township like this no I when I look at the start of the year we had a fairly good January and February and then as an industry we saw revenues begin falling quite quickly it in March and and the impact on people's been significantly I mean this industry employees travelling towards one in ten jobs globally and so you seen millions of people in the U. S. become unemployed in a very visual creative talent and so keep help us understand how that plays through to your business you know by the numbers mean how many people have you have been affected within your company by this either temporarily or or god forbid permanently yeah so I mean we have a a model where we are basically a franchise or for most of our business right okay Mr tell that we have around the world no six thousand a really small businesses are individually owned hotel main point fifteen twenty fifty people on about four hundred thousand people who work in hotels around the world and many of those people today have been furloughed or been in being made employee and so on thankfully the U. S. impact the cash back then had the paycheck protection program which enabled the small businesses to hopefully retain a lot of the staff at the corporate level we've been cutting people's salaries we've been cutting capital expenditures really focusing on the quiddity to make sure that we can get through this very very challenging time in the industry having said that you know keep in having kind of an asset light business how is that protected you as a company overall from from falling into deeper crisis yeah it really I mean we were some of the less leveraged companies out there in this industry and because we don't know a lot of assets we have less exposure so about focus really isn't on customers and colleagues and our owners and how do we help all those different individuals and stakeholders get through this so customers been about giving them flexibility on bookings and so forth with a colleague has been helping them access the that the programs around the world whether it's the the program here in the U. K. with the government I'm basically funding up to eighty percent of someone to pay up to twenty five hundred pounds what is in the federal unemployment and local employment in the U. S. with our owners accessing small business loans that turn to grants to been very very focused on that because those are the people that being the hardest impacted and we know by looking after all the stakeholders and helping them get through this we can come out of this the stronger business and help your business but it is again yeah people talk about challenging I mean I know I've been to the financial crisis I've been through you know nine eleven and we've never seen demand drunk like this and I think and if he's going to have to think about how to come out of this and how do we work with government and we work as an industry to help businesses stay vibrant right during this time frame re open and then see what the what the new normal click going forward but we want to talk about that new normal for sure but one thing I want to ask you about keep before we get too far away from it is what the experience of your owners and your colleague said it has been in terms of accessing those small business loans because we're hearing hearing reports about availability we've heard a little bit of controversy of you know who's getting it ends not what's coming back to you as your colleagues report in well let me start by saying just just for the record I see we have not received any funds from the paycheck protection program full stop and we've been very focused on getting under there so we've been hosting webinars from day one helping owners get to these programs on it had really good success with it number of wonderful stories about hotels Holiday Inn express that was close was able to access the program and then reopen it hired staff back to sell it hasn't been perfect clearly by the think about the small business association I think process is normally about thirty billion dollars a year in the US and they did three hundred billion already in a month we'll testament to their if they're trying to help out as many businesses as they can the program need to expand you know one thing we've been saying to the government was great first then but this program is going to have to expand and be extended because it is not to be over a month be ready to go back to normal tomorrow and so we can see about the long term in health and stability of an industry it is one in ten jobs globally and in the U. S. as in the sector and so that's a lot of people who we need to look after a lot of small businesses who buy from local vendors who hire local construction workers ability to tell if it's the interconnectedness of our economy we have to recognize to make sure we can kind of help work through that together does the government understand that Keith do you think they understand that when you get on the other side what really needs to be done I think you know I've actually had a couple of calls with the U. S. said we've been engaging with the White House with the Senate commerce I mean it they really do understand that they had to move quickly they do seem to understand that they're going to have to do more so hopefully they'll be able to get the next part of the package out on but I think it's a responsibility of business to help continue to educate them on how this is unfolding the impact is going to have more broadly and also have a part of the solution to because we're trying to help out as much as we possibly can we are we are hosting frontline workers in medical professionals all around the world in our hotels no we donating hundreds of thousands of dollars to food banks in different markets around the world to help out people who are in need we're providing to a great initiative call purchase peptic first responders first giving thousand room nights to first responders who close the medical facility need accommodation I think that's what the issue how we have to rally around how can we help get through this both by supporting owners supporting colleagues also out front line workers and medical professions and keep it as you look around the world as you pointed out it is Carol point on the introduction truly a global company you probably have some inputs that other CEOs don't have in terms of how this looks on the ground in different markets around the world what are we missing what should we know about maybe some things and and the way this virus is manifesting in the economic manifestation at different points of the globe it's quite interesting use being the country's who've gone out quite quickly on testing quite quickly on contact treating and understand the use of technology to be able to really manage it and manage the economic impact of open up parts of the economy also countries with they've got very close borders or New Zealand being put out there and in a straight come quite well now so countries that have been able to act quickly decisively on testing and trying to think has done a better job Kevin economy's going they'll be critical for the US to do that and in Europe as well too and that's keep are the CEO of intercontinental hotels group joining us from London obviously Carol no business are very few businesses have been changed like hospitality right reminding us that tourism is responsible for one in ten jobs globally so it has a big impact on the global

Coming up next