Walt Disney Co. (NYSE: DIS) has announced the layoff of 28,000 theme park workers. The COVID-19 pandemic already has deeply affected the broader travel industry, and this is among the first of a series of layoffs that could approach the same number at company after company. The figure likely will balloon to over 100,000 as other theme park companies, airlines and hotels face a winter that will cut short any recovery of their revenue.
Airlines already have said that, despite government aid, without additional funds from the Payroll Support Program, carriers will need to fire tens of thousands of workers to preserve cash. There has been an extremely modest return of passengers. That will be undermined by a new surge in COVID-19 cases that will be brought on by the winter and careless behavior in some areas. Airlines could find their revenue moving back in the direction of zero.
The effect on the hotel industry will be similar. Big hotel chains are among the largest employers in America. Both business travelers and leisure travelers will not book hotels in great numbers over the course of the next several months. The chains and individual hotels will face the cash preservation hurdle.
While Disney theme parks have the largest attendance in the industry, several other companies are just behind it. That includes Universal, SeaWorld, Busch Gardens, Cedar Point and Six Flags. Among them, they have hundreds of thousands of workers. Many of those jobs are at extreme risk.
There is a great deal of debate about the jobs recovery. Will unemployment rates continue to fall in America as people who find work outnumber those who lose jobs? The travel and entertainment industry could upend the recovery. The process already has begun and is certain to spread.