As traveling comes to a grinding halt to slow the pandemic, the hospitality industry is trying to weather the storm with massive layoffs and sweeping closures. The latest company to feel the sting of COVID-19 is Airbnb-backed boutique hotel Lyric, which announced a second round of staff cuts to The Real Deal on Wednesday.
“[We have] made the difficult decision to reduce our operations,” CEO Andrew Kitchell told TRD. “We know this is a very unsettling time for everyone, and our hearts go out to all of those affected by these unprecedented circumstances.”
A Lyric spokesperson confirmed on Wednesday that it laid off “the majority” of its 100-person staff headquartered in San Francisco, as the coronavirus has led to a slowdown in travel and bookings. The spokesperson also revealed 80 percent of hotel staff’s jobs are on the line if the “macroeconomic environment doesn’t change” by May.
In addition to laying off staff, the company announced the majority of its 400 units in Chicago, Dallas, Houston, Miami, Minneapolis, New Orleans, Philadelphia, Pittsburgh, San Diego, and Washington D.C. are at risk of closing. Meanwhile, Lyric’s 132 units at 70 Pine Street in New York City will “remain online.”
Inman asked for specific details on the layoff and closure numbers, but Lyric’s spokesperson has yet to respond to the request.
As a result, all guests at Lyric’s soon-to-be-shuttered locations must check out before April 3. If a guest has a reservation scheduled anywhere between April 3-16, they can cancel for a full refund. For guests who decide to keep their reservation in one of Lyric’s open locations, they won’t have access to shared amenities such as the gym or pool.
However, it seems Lyric was already in trouble before the coronavirus tightened its grip on the hotel industry.
Founded in 2014 by Andrew Kitchell, Joe Fraiman, and Kyle Larson, Lyric is a boutique hotel that leases units from swanky apartment complexes and turns them into fully-furnished oases for travelers. The company has raised a total of $171.9 million since 2015, with Airbnb becoming the lead investor during its Series B funding round in early 2019.
As more competitors such as Stay Alfred and Domio have entered the field, Lyric has struggled to keep up. After failing to meet 2019 revenue goals, the company began restructuring and downsizing in February, which included canceling the leases for 200 of its 600 units, and slimming its markets from 14 to 10.
Lyric isn’t the only company to make critical cuts at this time — Hyatt announced today furloughs and pay cuts for its 55,000 staff members from April 1 to May 31. Marriott furloughed two-thirds of its corporate employees, and multiple hotels on the Vegas strip closed their doors.
However, help is on the way as the Senate passed a $2 trillion coronavirus stimulus package that offers $350 billion to small businesses and a $500 billion lending fund for industries, cities, and states.