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Hoteliers ask for more federal relief from COVID-19 pandemic

Industry leaders met with President to discuss industry specific stimulus

THE FEDERAL GOVERNMENT has passed its first economic stimulus in response to the COVID-19 coronavirus outbreak. Now hotel industry leaders are calling for the passage of legislation discussed in a meeting between President Trump and CEOs of major hotel companies that would specifically help the lodging sector.

Trump signed into law the Families First Coronavirus Response Act on Wednesday that will provide aid to Americans affected by the many shutdowns implemented to slow the spread of the virus. It includes a federal emergency paid leave benefits program to provide payments to employees taking unpaid leave because of the outbreak as well as free testing for the disease.


However, as U.S. hotels saw declines in occupancy, RevPAR and ADR in the first two weeks of March, industry leaders have proposed a Travel Workforce Stabilization Fund. The fund would provide $250 billion for a travel and employment grants account and a travel business stabilization account, said Cecil Staton, AAHOA’s president and CEO, in a statement.

“These would provide hoteliers and other travel-dependent businesses with emergency liquidity in the face of a sharp decline in occupancy rates and overall travel,” Staton said. “America’s hotel owners and their employees are the heart, soul, and economic engine of the travel industry. COVID-19 is hitting the industry hard, and the passage of this bill will provide much-needed relief to working Americans affected by this pandemic.”

Already about four million jobs in the hospitality industry have been cut or may soon be cut, according to the American Hotel & Lodging Association. Occupancy rates have dropped below20 percent in major markets including Seattle, San Francisco, Austin and Boston.

“The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the great recession of 2008 combined,” Chip Rogers, AHLA president and CEO, said in a statement. “The White House and Congress can take urgent action to protect countless jobs, provide relief to our dedicated and hardworking employees, and ensure that our small business operators and franchise owners – who represent more than half of hotels in the country – can keep their doors open.

The heads of Best Western Hotels & Resorts, Choice Hotels International, Hilton, InterContinental Hotels Group, Hyatt Hotels Corp., Marriott International, MGM Resorts International as well as the REIT Pebblebrook Hotel Trust and the U.S. Travel Association joined Rogers to meet with Trump on March 17 to bring their COVID-19 concerns directly to him.

“We’re deeply committed to ensuring that small businesses have the support they require,” Trump said at the onset of the meeting. “The Small Business Administration announced disaster loans, which provide impacted businesses with up to $2 million.  And we’ve asked Congress to increase the SB lending authority.  We’re going to be going up to $50 billion and actually much more than that for small businesses.”

Elie Maalouf, IHG’s CEO for the Americas, said the crisis would ripple beyond the hotel industry.

“I want to turn our attention to those small business owners in 50 states across the communities because they’re the bedrock of those communities,” he said. “And as they’re getting impacted, it’s not just their employees that begin to see an impact in job losses, but it’s an entire ecosystem of their suppliers, their vendors.”

Pat Pacious, Choice president and CEO, also cited the importance of hotels in local economies struggling with other effects from the COVID-19 outbreak.

“As others have talked about, we're in secondary and tertiary markets. We may be the only hotel in a small town,” Pacious said. “Those owners have two key concerns: one, what do they do with their employees when they've got zero occupancy?  And two, how do they pay their mortgage?  So, it is this question of employee retention and liquidity so that you get through this period.”

Pacious also went on to ask the president to remove some red tape in the SBA loan program. For example, he thinks the disaster relief cap should be raised from $2 million to at least $10 million per individual. He also would like to see the personal liquidity test rolled back and easing the approval process for individuals with partnerships in multiple hotels.

“That restricts the amount of capital available to them,” Pacious said. “We'd really like the opportunity to speak to the SBA about lifting some of those requirements to really help inject more liquidity.”

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