Minnesota hotels forced to make difficult cuts amid pandemic

Minnesota hotels forced to make difficult cuts at pandemic impacts business

Seven months into the pandemic and the hospitality industry continues to be hit hard. With a decline in occupancy, some hotels are facing some tough decisions.

(FOX 9) - Seven months into the pandemic, the hospitality industry continues to be hit hard. With a decline in occupancy, some hotels are facing some tough decisions.

The effect that COVID-19 has had on the hotel industry can only be described as devastating and, as a result, people are losing their jobs. Bell attendants, cooks and reservations coordinators are some of the positions being eliminated.

"It was probably the most difficult thing that I’ve ever had to do in my life," said Radisson Blu Mall of America General Manager Edean Kam.

In September, the Radisson Hotel Group announced it was permanently laying off more than 200 employees at its downtown Minneapolis and Mall of America locations. The cuts, the company said, were the result of the unforeseen financial consequences of COVID-19.

"It’s been a very challenging time in the hospitality industry and especially the hotels," explained Kam.

It's been a months-long struggle for hotels nationwide; hotel occupancy in downtown Minneapolis is just under 20 percent.

"Without a doubt, this is really upended the normal vibe of downtown and the normal flow of activity," said Minneapolis Downtown Council CEO Steve Cramer. "We will work our way out of it."

"Unlike a usual economic downturn, this is something that happened literally overnight," said Wade Luneberg with Unite Here.

Some of those who have lost jobs across the state are represented by the hospitality workers’ union Unite Here.

"First, I think that they’re dealing with a lot of shock and disbelief; I think they’re confused and now reality is really beginning to sink in," said Luneberg. "It’s really going to be challenging heading into the winter."

And some fear the industry is on the brink of collapse. Hotel executives from the Hilton and Hyatt are among a group of CEOs now calling on the federal government to provide financial relief by using funds from what's been described as an underutilized lending program. Some workers advocates say that's just a start.

"The truth is what we need from Washington is a larger relief package similar to what we had last spring," said Luneberg.

According to a recent survey, more than two-thirds of hotels report that they will only be able to last six more months without further relief. It's important to note that the Radisson group is not part of the group of hotel CEOs asking the federal government for financial help.