There is a sweet relief for battered hotel owners who are simply hoping to survive the pandemic.
California will reserve thousands of hotel rooms to house homeless people affected by Covid-19, Governor Gavin Newsom announced on Friday.
The effort, called Project Room Key, will be largely funded by FEMA, which has pledged to cover 75% of the costs, Newsom said.
The Newsom team has secured 7,000 rooms and is on track to secure a total of 15,000 rooms. Nearly 900 people have already moved into hotels, Newsom said. The rooms will largely be reserved for homeless people who have either been exposed to the virus or deemed “at high risk”.
It couldn’t happen soon enough for the hospitality industry.
Thousands of hotel workers in California have been made redundant since mid-March, when Newsom partially suspended the state’s WARN law, which normally requires employers to give workers 60 days’ notice before proceeding. dismissal of 50 or more employees. In total, around 125,000 hotel workers in the state are expected to lose their jobs.
Due to travel restrictions, occupancy rates have slumped to single digits across the country, and big hotel companies are bleeding money like never before.
Ashford Hospitality, owner of the Beverly Hills Marriott, is considering bankruptcy, for example. Other companies like Hyatt have seen their valuations cut in half.
“In my lifetime, I have never seen damage so rapid to the industry, with an end so unknown,” Peter Hillan, spokesperson for the California Hotel and Lodging Association, told The Real Deal this week.
With tourism and travel no longer an option, hotels across the country rely on government agencies to fill rooms and keep them afloat.
In Chicago, for example, the city pays several hotels $ 175 per night per room to occupy 2,000 rooms.
Project Room Key is administered at the county level, Newsom said in his speech Friday afternoon. Last week, Los Angeles County and city officials used social media to rally hotel owners to join the effort. In a Twitter message, Los Angeles Mayor Eric Garcetti said the county was seeking quotes for blocks of rooms.
Newsom reported on Friday that the state had 10,710 positive coronavirus cases. About 2,100 people are hospitalized, including 901 in intensive care units.