January has generally been a slow month for New York City. The holiday season is over and the tourists are gone, giving the city a breather until the next wave of events rolls into town.
But this year, after a major slowdown in tourism due to the economic crisis, the city’s service industry – hotels, in particular – has become a deadzone. With occupancy rates way down, managers are following the lead of other hotels around the country laying off employees, reducing hours, and cutting some positions entirely. Some 4,240 people are expected to lose their jobs.
Crain’s: Housekeepers are taking the biggest hit right now, but front-desk clerks, bellmen and concierges could be victims of downsizing as well.
“If you don’t have rooms to clean, there is no point in keeping people on the payroll,” says Mujo Perezic, general manager of The Kimberly, a boutique hotel on East 50th Street that has experienced a dramatic decline in business this month.
More than 10% of the city’s 42,400 hotel workers are expected to lose their jobs—some only temporarily—this year, according to Lodging Investment Advisors. In early December, occupancy rates were down 4.5 percentage points to 80%, compared with the same period last year, according to Smith Travel Research.
“We have heard that as of Jan. 5, business has fallen off a cliff,” says Joseph Spinnato, chief executive of the Hotel Association of New York City. “From the projections we are being told about by our members, the number of layoffs will be significant.”
From the Marriott to the New Yorker Hotel to the Waldorf-Astoria, discounts fail to fill room and layoffs have become a reality or are imminent, at least for now. Some establishments have even eliminated lunch and fine dining at their restaurants to cope with the crunch.
But not all hope is lost. The city hotels are looking forward to popular upcoming events such as the Dog Show at Madison Square Garden in February to book more rooms and possibly rehire staff. Also, new hotels, with some 5,000 rooms, are expected to open this year that may absorb some of the layed off housekeepers. For now.
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