Hotel, restaurant job losses total nearly half-million in California
SAN JOSE — Coronavirus-linked economic woes unleashed mammoth job losses for hotels and restaurants in the Bay Area and all of California last year, as business travel, tourism and dining out shriveled, an analysis of new reports shows.
The Bay Area lost well over 100,000 hotel and restaurant jobs, a drop of 33.6 percent from 2019, according to figures compiled by Beacon Economics that were analyzed by this news organization.
In California, the economic setbacks erased nearly a half-million lodging and dining jobs, a 29 percent drop from the prior year.
“We’ll see a lot of hotel and restaurant jobs come back as we get the pandemic behind us,” said Jeffrey Michael, Stockton-based Center for Business and Policy Research at University of the Pacific. “But you won’t see all of those jobs come back. The hotel jobs connected to business travel and conventions won’t have as many jobs.”
The hotel and restaurant sector nose-dived to a steeper degree than other industries that are also suffering. The retail industry lost 2.6% of its jobs nationwide and 6.4% in California. A category called other services that includes hard-hit businesses such as beauty parlors, nail salons, and barbershops, lost 7.4% of its jobs nationwide and 20.3% of its jobs in California.
The massive job losses in lodging and dining are being accompanied by a major slowdown in the number of hotels that are being opened and constructed in both the Bay Area and all of California, according to a report by Irvine-based Atlas Hospitality Group.
Last year, 12 hotels opened in the Bay Area, down 55.6% from 2019, according to this news organization’s analysis of the research report that Atlas Hospitality provided.
“COVID-19 has continued to decimate the hotel market,” Atlas Hospitality said in its report.
The hotels that opened during 2020 in the Bay Area accounted for 1,262 rooms, down from the 4,192 rooms that opened in 2019, according to the information provided by Atlas Hospitality, which tracks the California lodging market.
“This is the worst market we have seen in 20 years of doing this survey, in terms of hotel projects being deferred or abandoned,” said Alan Reay, president of Atlas Hospitality Group.
The number of hotels under construction, measured by the number of total rooms being developed, totaled 6,205 in the Bay Area in 2020, down 13.8% from 2019.
Developers and property owners were constructing 45 hotels in the Bay Area during 2020, a decline of 13.5% from 2019, Atlas Hospitality reported.
Among the recent job cutbacks in the Bay Area for hotels:
— Auberge du Soleil, hotel and resort, Rutherford in Napa County, 159 jobs. The hotel closed on Jan. 4. “The hotel hopes that such layoffs will be temporary,” the hotel stated in an official notice to the Employment Development Department. “It is possible the layoffs could end up being permanent.”
— Ritz-Carlton hotel in Half Moon Bay, 138 jobs. “In California, brand new stay-at-home orders and other governmental mandates, effective in early December, have led to an immediate, significant, and unforeseeable downturn in the location’s already decimated business,” Lisa Krone, director of human resources, wrote in the hotel’s notice.
— The Lodge at Sonoma, Sonoma, 123 jobs. Jill Strauss, director of human resources with hotel owner Sage Hospitality Group, also cited government restrictions to the EDD.
— Hotel De Anza, downtown San Jose, 21 jobs. “With a significant reduction in our business in a rapidly evolving situation, we have to make painful choices that would have seemed unthinkable just a short time ago,” hotel general manager Craig Harris wrote in the notice.
— Courtyard by Marriott is cutting 85 jobs in Emeryville and 57 jobs in South San Francisco. Residence Inn by Marriott is eliminating 33 jobs in South San Francisco.
Ominously, it doesn’t appear that the hotel market will be recovering any time soon in California or the Bay Area.
“It will be three, four, five years before things stabilize” for hotel operators, Reay said.
Restaurants and hotels that cater to tourists or are located in popular leisure destinations could see a somewhat brighter picture.
“There could be a lot of pent-up demand from tourists who want to travel, local residents will be out in greater numbers to go to restaurants,” Michael said. “But we’re just going to see less business travel. Big meetings and conventions will be fewer in number.”