19 FEBRUARY, 2020

Hotels React as Coronavirus Spreads

UPDATE: The New World Wuhan Hotel, managed by Rosewood Hotel Group,  hosted medical workers to fighting against the coronavirus in China. “You are our role model as you risk your lives to help others,” said Sonia Cheng, CEO, Rosewood Hotel Group. “You guys are all heroes and we are proud of you.”

Coronavirus Precaution to Prevent Workers Compensation Claims

Hospitality insurance brokerage Hub International is offering this advice for employers in relation to the coronavirus:

Whether an employee contracted it while working abroad, or in the office from another employee, employers can be held liable for workers’ compensation claims associated with coronavirus. Find out how to curb your risk.

As the deadly coronavirus spreads its wings globally, many businesses have put a temporary pause on international travel. And yet the question remains: Can a business be liable if an employee tests positive for coronavirus, or causes it to spread?

The answer is yes.

Consider the following scenarios in which an employer would file a worker’s compensation (WC) claim due to coronavirus:

• An employee is working overseas and contracts the coronavirus.
• An employee contracts the coronavirus and infects others at the office.

WC policies will typically cover lost time, permanent disability, medical expenses and a death benefit in these scenarios.

What if an employee unknowingly infects their spouse and children? Again, this is a covered peril. This time under WC coverage B, or the Employers Liability of WC coverage. When more than one employee or individual is involved, the WC claim will likely be considered a catastrophic loss or exposure claim, kicking in full policy limits.

What employers can do right now

As of February 17, coronavirus has infected more than 71,000 people around the world. While mostly in mainland China, this number includes at least 15 cases in the U.S., according to the CDC.

Thanks to efficient and effective disease prevention in the U.S., there’s a good chance the disease won’t become a pandemic domestically. However, there’s no way to tell for sure. Make sure your business is prepared with the following four coronoavirus precaution best practices:

1. Be precautious. Employees arriving home from overseas work who may have been exposed to the virus should be sent straight to a doctor to be tested, even before returning home or to the office. Require clearance for any exposed employees—even those exposed domestically—before returning to the office. Require employees waiting on coronavirus test results to remain at home until a negative result is official. Let the entire staff know they have been tested, and the result was negative.
2. Be proactive. If your business doesn’t already have one, now is the time to create a business continuity, emergency preparedness and even pandemic reaction plan. First, establish a working group of employees from across your organization to author the plan. Consider business interruption issues specific to your industry, business and location and establish procedures that can be enacted on a moment’s notice.
3. Stress regular hygiene. Sounds self-explanatory but employees need constant reminders. Hang signs around the office, especially in food service and common areas, reminding employees to wash their hands frequently and cover their faces while sneezing and coughing. Urge employees who aren’t feeling well to stay home and seek immediate medical attention. If necessary, amend your company policies to allow employees to work from home as needed, and remove consequences for doing so.

UPDATE: Marriott has released the following statement relating to the COVID-19: “We are closely monitoring the Centers for Disease Control and Prevention (CDC) and World Health Organization’s (WHO) statements regarding the novel coronavirus (COVID-19) cases and following the guidelines from these agencies and the local health departments. The wellbeing of our guests and associates is of paramount importance. We have extended the date that we are waiving cancellation fees through March 15, 2020 for guests with reservations at our hotels in Mainland China, Hong Kong SAR, Macau SAR, and Taiwan and guests from Mainland China, Hong Kong SAR, Macau SAR, and Taiwan traveling outbound to other Marriott destinations globally.

JLL has released analysis on the virus’ effects on the Asia Pacific real estate market.

A Holiday Inn at Heathrow airport will be used as a quarantine facility in anticipation of more potential coronavirus cases arriving in the UK, according to a report in The Guardian. The hotel will be used for those considered at risk but with nowhere else to go, the Department of Health confirmed. This includes space for people to self-isolate if they have been advised to, and to be tested for the virus and await results.

UPDATE: The World Health Organization (WHO) has been officially renamed COVID-19 (Corona Virus Disease ’19).

Wyndham Hotels and Resorts has closed about 70% of its hotels in China, and with fewer guests in those that remain open, Chief Financial Officer Michele Allen on the company’s recent earnings call. “We expect this to continue through at least the end of March,” Allen said. Allen reported a 75% drop in occupancy at Wyndham’s China properties.

On its earnings call, Wynn Resorts reported that it was losing as much as $2.6 million per day from closures in Macau due to the outbreak.

Trip.com Group Ltd., China’s largest online travel service provider, is seeking to raise a $1.2 billion loan, according to a report from Bloomberg. The company is in talks with international and Chinese lenders for the facility, according to people familiar with the matter. The loan is for refinancing and working capital, according to the report.

UPDATE: US Centers for Disease Control and Prevention is preparing for a wider outbreak of the illness. “Right now we’re in an aggressive containment mode,” CDC Director Dr. Robert Redfield told CNN’s Chief Medical Correspondent Dr. Sanjay Gupta in an interview on Thursday. “We don’t know a lot about this virus,” he said. “This virus is probably with us beyond this season, beyond this year, and I think eventually the virus will find a foothold and we will get community-based transmission.”

As of Thursday, there have been 15 cases of the novel coronavirus confirmed in seven states: eight in California; two in Illinois; and one in Arizona, Washington, Massachusetts, Wisconsin and Texas.

UPDATE: On a post-earnings conference call, Christopher J. Nassetta, CEO, Hilton, reported that approximately 150 hotels, totaling approximately 33,000 rooms, are closed in China as a result of the coronavirus outbreak.

Assuming that the outbreak lasts three to six months, with an additional three- to six-month recovery period, Hilton expects a $25 million to $50 million hit on full-year adjusted EBIDTA, he said. The company estimates a percentage point impact on RevPAR.

China represents 2.7% of company’s overall EBIDTA.

In a recent blog post, Laura Dietzel, partner and senior real estate analyst at RSM US LLP, discussed how the coronavirus could impact China’s growing tourism industry, both in the short and long term. Insights include the following:

• Chinese nationals comprise the largest tourist market in the world—a group that continues to grow. According to the U.S. National Travel and Tourism Office, three million Chinese tourists visited the U.S. in 2018, the third most of any country after England and Japan.
• However a sustained outbreak of the virus would pose a significant threat to this growth, constricting new developments’ cash flows, driving down occupancy and reducing average daily rates.
• In the short term, those properties most affected by the virus outbreak are likely to be at the higher end of the market. More than 60% of Chinese travelers prefer to stay in in four- and five-star properties. If the public health response thwarts further contagion, though, the long-term impact to the hospitality sector should be contained.

INTERNATIONAL REPORT—As the World Health Organization (WHO) has declared the novel coronavirus outbreak a public health emergency of international concern and the illness continues to spread, hospitality companies are reacting.

The spread of the illness, and the fear that has come with it, has caused companies doing business in China to close offices and factories, and restrict travel to and from the country. Airlines and cruise ships have cancelled flights and tours in the country.

Areas of China, including Hong Kong and the island of Langkawi, have seen dramatic declines in tourist activity in a time that is usually very busy with Lunar New Year celebrations. Zainudin Kadir, CEO, Langkawi Tourist Association, told local media that area hotels have seen a 40% drop in tourist arrivals since the outbreak.

The outbreak is having an effect on international tourism as well, as 62 countries have implemented some form of immigration control on Chinese citizens, including the U.S. About 134 million Chinese traveled abroad in 2019, up 4.5% from a year earlier, according to official figures. Before the outbreak, the China Outbound Tourism Research Institute predicted about 7 million Chinese would travel abroad for the Lunar New Year this year, up from 6.3 million in 2019.

Roger Dow, president/CEO, U.S. Travel Association, said that the outbreak should not have an effect on domestic tourism. “We are aware of the decision by WHO officials to elevate the coronavirus situation to a ‘public health emergency of international concern’ as well as the agency’s recommendation not to limit travel and trade based on the declaration,” he said. “We also understand that U.S. public health authorities, including officials at the Centers for Disease Control and Prevention, continue to believe the risk of coronavirus exposure to the American public remains low. We will await additional notice on this evolving situation that may inform whether further precautions become necessary and remind the public that U.S. health officials urge the same personal best practices that are standard for a typical flu season—frequent washing of hands, etc. All of the current expert advice indicates that business and leisure travel in the U.S. can and should continue as normal.”

Many hospitality companies are allowing guests to cancel or change reservations with no penalties.

Hyatt has implemented a set a of guidelines for all of its properties. “The safety and well-being of our guests and colleagues is a top priority for Hyatt,” a spokesperson told Hotel Business. “In light of the novel coronavirus, we are closely monitoring the situation and following guidance issued by the World Health Organization and Centers for Disease Control and Prevention. We fully understand the concerns around traveling during this time, and consistent with Hyatt’s commitment to care, the following has been implemented:

1. Guests who have booked stays through Feb. 10, 2020 at any Greater China Hyatt hotel via Hyatt official channels, including Hyatt.com, World of Hyatt App, WeChat Mini Program and Global Contact Center, can postpone or cancel without any cancellation fee;
2. Guests from Greater China who have booked stays through Feb. 10, 2020, at any Hyatt hotel globally via Hyatt official channels, including Hyatt.com, World of Hyatt App, WeChat Mini Program and Global Contact Center, can postpone or cancel without any cancellation fee;
3. Greater China Hyatt hotels continue to work with group and event customers with questions or concerns regarding future business.”

Hyatt locations globally have been instructed to “continue to remain vigilant and utilize precautionary measures to protect the health and safety of our guests and colleagues,” according to the spokesperson. “As always, Hyatt properties will continue to follow recommended procedures and protocols to ensure that all hotel practices meet the latest coronavirus guidance—for the continued safety and well-being of our guests and colleagues.”

Wyndham Hotels and Resorts released the following statement:

“The safety of our guests, owners, team members and partners around the world is a top priority. We are currently recommending that our hotels in China follow the guidelines established by the World Health Organization (WHO), the U.S. Centers for Disease Control and Prevention (CDC), and their local health departments—and to report any suspected cases to the proper authorities as soon as possible. We are sending supplies to our hotels in China for distribution to workers, guests and members of the community. Additionally, guests traveling to or from China with direct bookings for stays in any of our hotels from January 22nd through February 29th will have their cancellation or change penalties waived. We continue to monitor the situation closely.”

“We are always very focused on the well-being of our guests and team members, and are closely monitoring updates from local and international health authorities,” a spokesperson from Hilton told Hotel Business. “We encourage our guests to do the same. We have announced a modification and cancellation waiver for all guests who plan to travel to any Hilton-branded property in China between January 21st and February 29th. Additionally, guests planning to travel from China to a Hilton-branded property globally, modification and cancellation penalties may be waived during the same time period. Guests with additional questions about their reservations are invited to contact our guest assistance team.”

Marriott International is also waiving cancellation fees. “We are closely monitoring the Centers for Disease Control and Prevention and World Health Organization’s statements regarding the novel coronavirus (2019-nCoV) cases and following the guidelines from these agencies and the local health departments,” the company said in a statement. “The well-being of our guests and associates is of paramount importance. We are waiving cancellation fees for hotel stays through February 29, 2020 for guests with reservations at our hotels in Mainland China, Hong Kong SAR, Macau SAR, and Taiwan and guests from Mainland China, Hong Kong SAR, Macau SAR, and Taiwan traveling outbound to other Marriott destinations globally.”

IHG told Hotel Business: “The health and well-being of our guests and employees is our top priority. We are monitoring the situation and working very closely with local authorities. Guests traveling to or from Mainland China, Hong Kong SAR, Macau SAR, or the Taiwan region between January 23 and February 29, 2020 will be able to change or cancel a valid booking reservation made via the hotel directly, IHG.com, the IHG App, or the IHG Central Reservations Center, without financial penalty. For bookings made by a travel agent or online booking platform, we are advising guests to contact their agent.”

Ctrip, China’s largest online booking platform, said more than 300,000 hotels on its platform had agreed to refunds on bookings between Jan. 22 and Feb. 8, according to a report from Reuters.

Industry Expert: Coronavirus Impact “A Blip”