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MGM Resorts Leads U.S. Travel Sector With Job Cuts So Far in 2019

Sean O'Neill, Skift
MGM Resorts Leads U.S. Travel Sector With Job Cuts So Far in 2019

The U.S. travel industry continues to see an overall tight job market, benefiting from a strong economy that drove the unemployment rate to a half-century low, the U.S. Bureau of Labor Statistics reported Friday. But some individual travel companies experienced job cuts tied to retrenchment this year, providing a humbling context to Friday’s jobs report.

The year’s most extensive job cuts by a U.S. hotel company took place at MGM Resorts International, according to data tallied for Skift by Challenger, Gray & Christmas, an outplacement and career-transitions company.

The Las Vegas-based MGM Resorts International trimmed 2,040 positions through September 2019, according to the data. In January, the casino and hotel operator began to cut costs in an effort that would trim about $150 million a year over two years in labor cutbacks.

In the aviation sector, the largest job loss came at ABM Aviation, a subsidiary of publicly held facility management company ABM Industries. A few airlines dropped their service contracts with the company, switching vendors either in-house or to other providers.

ABM lost a contract with Delta Airlines, costing AMB 1,121 positions in Atlanta this year. It lost a contract with American Airlines that cost it about 600 jobs in Dallas, and lost a contract with United Airlines and had to cut 735 jobs in Chicago. It lost some other deals for cleaning planes, helping transport passengers in wheelchairs through the airport, and other services this year as well, for a total loss of more than 2,700 positions.

PrimeFlight Aviation Services, a similar facility service provider, lost a United Airlines contract that led to 1,174 job losses this year.

Please see this table for other notable job losses in the traveler accommodations, and airline and commercial passenger aviation sectors:

Company Number Reason
MGM Resorts International 2,040 cost-cutting
ABM Aviation 2,707 contract loss
PrimeFlight Aviation Services (United Airlines contractor) 1,174 contract loss
Coney Island and its amusement complex 285 restructuring
Bongo’s Cuban Café, Estefan Restaurant Walt Disney World Resort 245 closing
Desert Hills of New Mexico 242 no reason given
La Torretta Lake Resort & Spa 241 restructuring
Langham Boston 231 closing
Doubletree Suites by Hilton Hotel NYC Times Square 215 closing
Pier Sixty-Six Hotel & Marina 213 restructuring
Clift Royal Sonesta 206 no reason given
Villas of Grand Cypress 178 restructuring
Monticello Casino & Raceway 160 closing
1 Hotel South Beach 139 no reason given
Bear Island 132 no reason given
Chelsea Park dba The Park 129 closing
Southwest Airlines Co. 118 no clear reason
Doubletree by Hilton New Bern 115 hurricane Florence
SeaWorld Entertainment Inc. 105 restructuring
United Airlines (Houston) 100 outsourcing domestic
Radisson Suites Hotel Tucson 82 closing
Sheraton Clayton Plaza Hotel 82 no clear reason
AAR Aircraft Maintenance 80 demand downturn
Beachcomber Resort & Villas 79 closing
Diamond Resorts, The Modern Honolulu 57 restructuring
Alaska Airlines 70 restructuring
Sodexo American Airlines Admirals Club 69 contract loss
Twin Rivers Casino 65 competition
Westin Sheraton Vacation Services 62 no reason given
Crowne Plaza Hotels & Resorts 61 closing
Holiday Inn San Antonio Airport, Interstate Management 61 closing
Delaware North Companies Travel Hospitality Service 60 closing
Lamplight Inn of Fort Myers 56 no reason given
La Loggia LLC, Tarry Lodge 50 closing
Airport Management Service LLC 50 no reason given
Eastern Airlines LLC 50 no reason given
Menzies Aviation 50 no reason given
Southern Airways Mokulele Airlines 24 acquisition/merger
Quin Central Park Hotel 18 restructuring
Allegheny County Airport Authority 16 cost-cutting
Library Bar at the Hudson Hotel 10 closing
Hotelbeds 17 restructuring
Mauna Kea Summit Adventures 9 government regulations

Source: Challenger, Gray & Christmas

A strong economy has benefited U.S. hotels in strong guest bookings but has run up operational costs on the labor front due to labor shortages in some markets. But that pressure may be easing.

Hourly earnings in the hospitality segment representing hotels, motels, and inns of 50 or fewer people was $16.12 an hour in September, according to data pulled for Skift by Paychex, a payroll services firm.

That represented hourly earnings growth of 2.22 percent over the past 12 months in the traveler accommodation sector, which was slightly weaker than the 2.77 percent national rate. A decline of 1 percent in year-over-year weekly hours worked pulled down the earnings growth, Paychex said.

As for Friday’s federal jobs report, the leisure and hospitality sector grew by a seasonally adjusted 21,000 jobs in September, to 16.72 million.

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