Some hotels use crowdfunding to help furloughed employees

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Hotel front desk worker
Photo Credit: Sorbis/Shutterstock.com

With a staggering number of service workers laid off or furloughed, some hotels have turned to crowdfunding to help them. 

Gofundme has seen a major surge in activity during the Covid-19 crisis. The company said coronavirus-related campaigns on the site jumped 60%, from 22,000 to 35,000 campaigns, between March 20 and March 24.

Lifestyle hospitality group SBE launched a Gofundme on March 20, with founder and CEO Sam Nazarian kicking off the campaign with a $65,000 contribution and the company promising to match every additional dollar donated. 

Proceeds from SBE’s Gofundme will be used to create care packages for employees in Los Angeles and Miami. Packages are to include nonperishable food items, household essentials and a $50 gift card. SBE said it “aims to make these packages available every week as long as possible.”

To date, SBE had raised approximately $113,400 of its $250,000 goal.

The majority of SBE’s restaurants and entertainment venues in North America are temporarily closed and several of its Miami-area hotels are, too (Delano South Beach, SLS South Beach, Shore Club, SLS LUX Brickell and Hyde Midtown). The SLS Baha Mar resort in the Bahamas is also shuttered.

Boutique hotel brand The Standard launched The Standard Stands Together Relief Fund on Gofundme on March 22, with proceeds to “benefit and support team members who have lost their jobs due to the effect of Covid-19.” The Standard recently closed its New York, Miami and London hotels.

“Our employees, like many others in the service industry, tend to live paycheck to paycheck,” said Standard Hotels CEO Amar Lalvani in a letter. “Most are hourly, often relying on tips. Many are immigrants without family infrastructure here. Few have savings. Most will not be able to pay rent next month. Without relief, many will leave our cities in a few months altogether.”

As of March 31, The Standard had raised around $110,400 of its $200,000 goal.

Boutique chainlet Ace Hotel Group launched the Ace Family Fund, achieving nearly $22,000 of its $500,000 goal since launching March 22. 

The company said it has temporarily suspended operations at hotels in New York, Pittsburgh, Chicago, London and Palm Springs, Calif. 

New York-based LTH Hospitality, which operates the Vine and L’Amico restaurants at the Kimpton Hotel Eventi, has established an Employee Relief Fund on Gofundme. The hotel and both restaurants have closed. 

Similarly, Washington D.C.-based chef Colin Clark has rolled out a Gofundme to support furloughed employees at his Via Sophia and Earth N Eats restaurants. Via Sophia is in D.C.’s Hamilton Hotel. 

“People who work in restaurants almost universally lack the ‘work-life balance’ thing,” said Clark in a statement. “Whether by choice or necessity, and usually it’s at least a little of both, we live to work, and nothing is more brutal than a slow shift or a slow month or being stuck at home.”

According to Pam Loprest, a senior fellow and labor economist for the Income and Benefits Policy Center at the Urban Institute, the proliferation of employee relief funds indicates that many service workers live “so close to the edge.”

“A very large percentage of hospitality workers are lower-wage workers,” said Loprest. “It’s commendable that employers are trying to help their employees, but it’s also evidence that so many people, even in what was a good economy, have no fallback. We talk about businesses not having any profit margins, but a lot of families don’t have any margins at all.”

David Madland, a senior fellow and a senior adviser to the American Worker Project at the Center for American Progress, echoed Loprest’s concerns, calling the state of hospitality workforce “precarious.”

“There’s research [from the Federal Reserve] that shows that about 40% of Americans would have trouble coming up with just $400 in an emergency,” said Madland. “On the one hand, it is heartwarming that companies are actively trying to help their employees in times of need. On the other hand, however, this is shocking, and [shows that] the conditions for workers in many industries, especially the service sector and travel industry, are totally inadequate.”

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