Impact of Covid-19 on the Hotel Industry in Orange County: Job losses and effect on other externalities
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Impact of Covid-19 on the Hotel Industry in Orange County: Job losses and effect on other externalities
Pre-pandemic Status
Before the occurrence of the Covid-19 crisis, the tourism sector was growing at a high within Orange county. In relation, the County was overseeing the construction of new hotels upon which investors sought to exploit the existing opportunities within the tourism industry. Among the critical hotels developed within Orange county in 2019 and early 2020 include the Cambria Hotel Anaheim Resort that consisted of 352 rooms. Also, the period oversaw the development of Hampton Inn & Suites that contained 178 rooms and the Buena Park hotel that included 102 rooms. The period oversaw the opening of the most significant number of hotels within the County upon which 4773 rooms got developed under the new hotels (Murar, 2020). At the beginning of 2020, Orange county had 17 hotels under construction, which included the larges hotel that is the Westin Anaheim Resort developed by Wincome Group. The hotel contained 613 rooms with a budget of $250 million. Also, the County had witnessed a tremendous increase in the number of visitors to its various hotels. The continuous growth relates to the accessibility of the County from the different airports, including John Wayne Airport and the beautiful sceneries within the County. In relation, Orange county developed a record in 2018 upon hosting 50.16 million visitors within the year (Rokou, 2019). In line with the increased investments within the tourism sector, the number of tourists was expected to rise more so following the partnership developed between the tourism sector and the Middle East region. Based on this analysis, the tourism sector within Orange County was experiencing tremendous growth before the occurrence of the Coronavirus crisis.
Impact of Covid-19 on the Hotel Industry in Orange County: Job losses and effect on other externalities
The occurrence of Covid-19 has developed a series of challenges within the tourism sector, which has further affected the performance of the industry and the development of tourism activities. In relation, the sector has overseen the development of regulations limiting their activities to ensure social distancing. Among the provisions include the restriction of hotel operations to take away services only. In relation, hotels could not host visitors within their facilities, which further led to losses within the hotels. In relation, Orange County oversaw the closure of crucial attraction sites such as Disneyland, Anaheim, and Universal Studios, which facilitated the movement of visitors to the County.
Furthermore, the limitation of activities within the transport sector has restricted the access of visitors to the hotel, thus lowering the demand for hotel services. In relation, Orange county airports have witnessed a 97% decline in passengers with 0% international travel (Murar, 2020). Also, the restriction of movement by the government has played a crucial role in restraining visitors from accessing the hotels within the County. The negative impact of the crisis on employment has further restricted the spending of minimal resources to help maintain the economic impact related to the crisis. Lastly, people have developed the fear of contracting the virus upon which they stay at home to ensure their safety.
Concerning the changes related to the current crisis and the measures developed to mitigate the spread of Covid-19, hotels have witnessed an adverse effect on their economic performance. In relation, the demand for hotel services has been regulated, which further results in losses. To contain the economic impact, hotels have been forced to cut off their operational cost by laying off some of their employees and minimizing hotel operations. In Orange County, most hotels have disclosed their layoff statistics under the Warn report developed by the Employment Development Department. In particular, the County witnessed a layoff of 650 employees in March. Among the companies that laid off, most employees include the Hyatt Regency in Garden Grove that has cut off 369 employees (Murar, 2020). With the development of stiffer restriction, hotels have sent home more employees on unpaid leave following their closure. In particular, about 130 hotels located around Disney and Anaheim suspended their operation since April owing to low uptake of company services and increased operational costs (Major, 2020). The effect further extended to the supply chain within the tourism sector upon which hotel terminated contracts related to the supply of various products and services as a means to regulate their operations to comply with the low demand for company services. The move further facilitated the loss of more jobs since suppliers had to hold their services.
References
Major, L. (2020). Impact of Covid-19 on Los Angeles & Southern California Hotel Markets. retrieved from www.hvs.com.article/8753-impact-of-covid-19-on-Los-Angeles- Southern-California-hotel-markets
Murar, K. (2020). Hotel development strong. Orange County Business Journal. Retrieved from www.ocbj.com/news/2020/jan/09/hotel-development-strong/
Murar, K. (2020). Hotel layoff staff. Orange County Business Journal. Retrieved from www.ocbj.com/news/2020/mar/27/state-warn-oc-hotel-layoffs/
Murar, K. (2020). JWA April down 97%. Orange County Business Journal. Retrieved from www.ocbj.com/news/2020/may/26/jwa-april-down-97/
Rokou, T. (2019). Orange County California sets tourism record: Attracts 50+ million visitors in 2018. Retrieved from www.traveldailynews.com/post/orange-county-california- sets-tourism-record-attracts-50-million-visitors-in-2018