As COVID-19 keeps people at home, North Carolina hospitality workers suffer
When Cesar finished his last day of work as a banquet worker at a Durham hotel on Feb. 28, he never expected he’d still be out of work today.
Cesar, who didn’t want his last name published to avoid harming his relationship with potential employers, said he’s held jobs in the hospitality industry — dishwasher, waiter, bartender — since he arrived in North Carolina from Mexico.
“In the 20 years I’ve been here, I’ve never seen anything so bad to harm us like this,” he told The News & Observer in Spanish.
“I feel bad, I feel powerless, I feel frustrated,” he said. “Sometimes I can’t sleep because I’m thinking [about] what I’m going to do for work the next day. It’s not just me, I hear my friends saying that ‘tomorrow I won’t have any work, do you know where I can find some?’ It affects all of us a lot, not just me.”
The tourism industry has been one of the hardest hit by the pandemic. From March 1 to Aug. 1, travelers in North Carolina spent about 60% less money compared with the same time period last year, according to estimates from the Economic Development Partnership of North Carolina, based on data from the U.S. Travel Association. The nationwide drop during that time was about 64%.
Hotel occupancy in July in North Carolina was estimated at around 49%, compared with about 80% during July of last year, according to STR, a company that provides data for hospitality companies.
And hospitality workers have been paying the price.
Many, like Cesar, “had no severance, no paid time off, nothing that they were left with. Just one day they were told not to come in, and that was it,” said Spencer Bloom, civic engagement organizer with El Pueblo, a nonprofit that serves the Latinx community in the Triangle.
“The complete inaction from the government and government officials at every level to come up with a meaningful solution and a meaningful plan to take care of these families has resulted in a disaster that is going to ripple through these communities for years to come. Now is not the time to look away.”
Cesar, who received help from El Pueblo’s relief fund, was one of more than 1,000 immigrants to apply to the fund since it launched in May. He says the hardest part of the last few months has been seeing his children struggle with their new financial situation.
“My son is 15 and he understands. But my daughter is 10 years old and I simply didn’t have the words to give her. I told her not to worry.”
‘Push the panic button’
“We’re really reaching a critical point where many businesses across our state — restaurants and hotels specifically — are not going to be able to survive. We’re really trying to push the panic button that if we don’t see some significant relief by Labor Day, our industry in this state might be decimated,” said Lynn Minges, president of the NC Restaurant & Lodging Association, in an interview.
According to the Department of Commerce, nearly 540,000 people in July 2019 — 11% of people employed in the state — were employed in the leisure and hospitality services industry. In June of this year, that was down to 396,000. In July it was up to nearly 405,000.
Minges expects those numbers to drop further if federal aid isn’t renewed. Many hotels and restaurants in the state were able to retain employees for a few months using Paycheck Protection Program funding. But that program expired on Aug. 8 and efforts to renew it by Congress remain stalled. As the funds many businesses received in the initial round run out and peak tourism season comes to a close, Minges said more layoffs are likely.
The NCRLA established the NC Restaurant Workers Relief Fund in late March to provide one-time grants of up to $500 to hospitality workers who’ve lost their jobs. More than 17,000 people applied for assistance, according to Margo Metzger, director of communications at NCRLA. There are still thousands of people on the wait list for the relief fund, and it is no longer accepting applications.
The situation for workers in the tourism industry is increasingly dire, after the extra $600 weekly unemployment insurance benefit offered through the CARES Act expired at the end of July. North Carolina was approved in August for an extra $300 in weekly benefits, but state officials have not announced when workers will receive that. There is only enough money for three weeks’ worth of benefits.
“The sense of desperation that people feel — most folks that I know who are in this situation have worked their whole lives, they’re not used to being on unemployment,” said Stuart Mora, an organizer with UNITE HERE Local 23, which represents workers at the Charlotte Douglas International Airport. Nationwide, an estimated 90% of the union’s 300,000 members, who work across the hospitality industry, remain out of work, according to a union representative, Brooks Bitterman.
“So many tears. Proud hard-working adults feeling intense uncertainty and fear to the point that they can’t talk about it without crying. I’m used to hearing this from folks once in a while because they catch some bad luck and were already struggling. Now it’s multiple times a day,” Mora wrote in a text message to The News & Observer.
Ripple effects
The impacts of tourism losses ripple far beyond just hotels and airports.
“People don’t understand that if tourism goes away the restaurant you love maybe and probably will go away. They need those visitors to help make it profitable,” said Wit Tuttell, vice president of tourism at the Economic Development Partnership of North Carolina.
Lodging accounts for just 21% of total visitor spending in NC, according to EDPNC.
“If you go to a smaller community that gets a lot of visitors, chances are they support that grocery store too. That grocery store may wind up going away if visitors don’t come back. So I think people don’t see the tentacles that the tourism industry has,” said Tuttell.
The losses in tourism-related taxes could have a broad impact, too. The state lost $494 million in state and local tourism-related taxes during from March to August, according to estimates from the U.S. Travel Association provided by EDPNC. Analysts at the North Carolina Office of State Budget and Management estimate that the state lost $350 million to $400 million in state and local taxes during that time period, according to Marcia Evans, communications officer at OSBM.
Occupancy taxes go directly back into tourism infrastructure. But sales taxes pay for a wide range of services from education to public safety.
That blow will be softer in parts of the state that are beginning to welcome tourists back. Some coastal and mountain communities have returned to normal levels of occupancy.
In Carolina Beach, for example, hotels brought in just $5,872 in room occupancy taxes in April, compared with $229,964 the previous year, according to data from the Wilmington and Beaches Convention & Visitors Bureau. By June, that number jumped back up to $581,080, more than $100,000 more than the previous June.
In Wake County, which relies heavily on business travel, hotel tax collections in June were down 53.4% from last June, according to the Greater Raleigh Convention and Visitors Bureau.
The county had booked 227 conventions, meetings or events canceled through Aug. 5, costing the county an estimated 198,911 hotel room nights, 278,924 attendees, and $118.5 million.
Before the pandemic, the county employed 67,000 people full or part time in the hospitality sector; and 53,000 had been furloughed or permanently laid off in early May, according to the Greater Raleigh Convention and Visitors Bureau.
“[Urban areas] seem to be suffering the worst in this pandemic tourism-wise. They are built on the things that have been affected the most by COVID: that’s business travel, meetings, conventions, events,” said Tuttell.
University impact
Recent clusters at universities in the Triangle have impacted tourism, too.
Management at the Chapel Hill hotel where Brenda — a housekeeping supervisor who didn’t want her last name used because she was concerned about the impact on her job — warned they might close the hotel after several COVID-19 outbreaks at UNC. Brenda said that the occupancy was already down to about 60% before UNC went online.
Before the pandemic, Brenda oversaw 15 housekeepers at the 200-plus room hotel. On March 15, the management temporarily laid off all but three of them. She said she gets two or three calls or visits a week from her former co-workers, who are desperate to get back to work.
“They just ask me how we are doing and when we are going to call them and the only thing I can say is, we don’t know,” she said. She’s been working at the hotel for 20 years and many of her coworkers have been there for years, too.
“I miss everyone — the people who work more than six years with us, it’s like we’re family,” she said “It’s really difficult for us to tell them that we are not available to give them work right now.”
She worries that she could lose her job, too, and if she does, how she’ll be able to provide for herself and her 15-year-old daughter.
“My responsibilities, payments — what am I going to do?” she said. “It’s really hard to think about.”
Demand for action
Tourism industry groups nationwide are calling on the government to step in.
“The hotel industry has been decimated by the COVID-19 health crisis,” industry groups wrote in an Aug. 18 letter to the U.S. House of Representatives. Nearly one out of every four hotel commercial mortgage-backed securities loans are delinquent on payment.
The industry has lost 4.8 million jobs since February. “The human toll on our employees and our workforce is devastating, with less than half currently employed,” the letter said.
The industry groups called on lawmakers to pass the Helping Open Properties Endeavor (HOPE) Act (H.R. 7809), introduced by U.S. Reps. Van Taylor (R-Texas), Al Lawson (D-Fla.), and Andy Barr (R-Ky.). Through the bill, commercial property owners would be able to access preferred equity loans, backed by the Treasury Department.
The bill was referred to the House Financial Services Committee for further consideration and its sponsors have been working with counterparts in the Senate to include similar provisions in future relief packages, according to staff of the bill’s sponsors.
At the state level, NCRLA is pushing lawmakers to adopt HB 1224, which would offer the hospitality industry loans with forgivable provisions. The bill is being reviewed by the Committee on Appropriations.
Cesar said that while he’s desperate to be called back to work, he’s worried about COVID-19 and his safety on the job. But it’s a risk he says he’d take.
“The truth is that I’ve never lived a very economically stable life. But when I had money, I would buy gifts for my wife, like a watch or a necklace,” Cesar said. “But we had to go pawn them. Things like that — we had to sell to get by. That hurt me so much. As the father of the house, I have to be strong and support my family.”
This story was originally published September 3, 2020 at 10:05 AM with the headline "As COVID-19 keeps people at home, North Carolina hospitality workers suffer."
