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

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

Diamond Resorts, Ka’anapali Beach Club, Point at Poipu

247

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

78

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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