Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
THERE ARE MANY challenges for hotels operating under the COVID-19 pandemic and its ensuing travel restrictions. It is a unique situation and, therefore, one that presents unique legal problems for hospitality businesses.
It may be advisable to have an attorney available to avoid or resolve issues that may otherwise produce costly results.
The Patel|Gaines law firm in San Antonio, Texas, has a page on its website dedicated to COVID-19 legal issues, and Rahul Patel, managing partner, has been taking on cases stemming from the pandemic. The main topics include property taxes, the application of “force majeure” clauses to escape contractual obligations and relief from commercial mortgage backed securities loans.
The tax man will cometh
Property taxes are, and the possibility of relief from them, are important subjects for Patel’s clients. In a March 27 property tax podcast he conducted with the firm’s Senior Associate Attorney Kathlyn Hufstetler on the tax situation in Texas, the question was raised about whether this year’s taxes would be collected.
There are a lot of discussions being held about 2020 property taxes, Patel said. For one thing, all property tax values for 2020 listed in the state’s plan are dated as of Jan. 31.
“As of Jan. 31, most businesses were not impacted by the coronavirus or COVID-19, so therefore you would not really see a lot of impact negatively or downward assessment on your 2020 taxes,” he said. “However, lots of counties are taking this into consideration and know that you will have a problem paying your taxes when they become due later in the year or Jan. 31, 2021.”
It’s still too early to say what solutions are out there yet, but they are monitoring the situation, Patel said.
“More will be known as time passes what will happen for 2020,” he said.
Of course, Patel said, property tax laws are different from state to state.
“I do think a lot of commonalities will apply when it comes to property tax and different tax-related issues in that we’re doing everything we can as a country to pump dollars back to business owners, but at some point it’s going to come from somewhere, right?” he said. “We know that, and it’s going to come in the form of taxes at some point, whether that’s income taxes, sales tax, property taxes, occupancy taxes, whatever you call it it’s going to come back.”
Hotels should be aware of that so they can mitigate the impact on their bottom lines.
“I see state sales tax across the country probably starting to increase. I think property taxes will probably start to increase as well,” he said.
Acts of God
Another possible source of relief, but one with possible legal complications, is the “force majeure” clause found in most contracts. The clauses, also known as “Act of God” clauses, essentially state that certain unforeseen events or circumstances can occur that are beyond control and may excuse or suspend a party’s obligations under the specific contract, according the Patel|Gaines website.
“They call them an ‘Act of God’ provision because it’s for something that was out of the breaching party’s control,” Patel said. “But is the pandemic an act of God? Would that negate my requirements to fulfill my contracts?”
The force majeure clause can include specific legal procedures for invoking its protection, including providing notice that it has occurred, spelling out how it might affect performance and taking steps to mitigate that impact. But actually implementing the clause encompasses accounting for many different circumstances that may or may not be spelled out.
“Let’s say you have a hotel with a big banquet hall and you had agreed to do a wedding. What if they still wanted to do the wedding and you’re not able to do it?” Patel said. “What if you’re not able to provide the food and services necessary. What if you and the other party don’t want to do it and they’re asking for a refund and you’re telling them it’s a credit?”
In other cases, he said, many hotels have leasing agreements with restaurant owners that they can no longer honor because the hotel is closed.
“Those are the types of things where force majeure is starting to come up. A lot of people are having questions about it,” he said “Generally I call it a ‘It depends’ legal argument, but it truly does depend on how it’s crafted and what the situation it’s being brought up in.”
Furthermore, nobody alive has lived through a major pandemic like this, he said.
“When was the last time something like this has come up? I think that’s where a lot of litigation will stem from,” Patel said. “I see, more or less, right now people trying to find ways to better their business situation regardless of what side they’re on.”
Business interruption coverage may not come through
Some hotel owners may be planning to cash in on business interruption insurance policies. Don’t count on it, Patel said.
“I think that there are probably some strong legal provisions that state that your insurance should or does cover this type of situation. But the flip side to that is, whether it says that or not, or whether it’s covered or not, isn’t really the situation. The situation is how long is it going to take for you to find relief under that?” he said. “Do you believe that insurance companies are going to bend over and say ‘Hey, $20,000, let’s just pay the claim.’ No, because there’s going to be thousands of claims. I told someone that it might not be a bad angle to pursue, but if you’re relying on that to come in next month then you’ve got a problem.”
Actually getting paid by the insurance companies will probably take five years and legislative as well as legal action, he said.
“You better rest assured that the insurance company lobbying arm is bigger than most, so you can expect them to argue and lobby pretty hard that business interruption doesn’t apply to a national pandemic such as this,” Patel said.
More complicated than you think
The firm’s website also contains a checklist of documents a hotel may need to seek relief from commercial mortgage backed securities loan. However, CMBS loans are more complicated than regular loans, as discussed in a recent AAHOA webinar featuring Peter Berk, president of PMZ Realty Capital LLC Hotel Finance Group.
“CMBS is going to be more of a challenge right now. You have to work through servicers, you have to work through special servicers. It’s not like your local bank,” Patel said. “When there’s a downturn in the economy, people are not going to be ready for what will happen because they haven’t really understood CMBS loans.”
Patel wrote an article in 2018 on the potential for problems with the CMBS loan market. One issue was the highly structured cash management process that comes with a CMBS loan that may not appear to be a problem while the economy is good and the hotel owner can make their payments.
“But if the hotel suffers a downturn, the lender essentially takes control of cash flow until it returns to pre-set levels. In short, the CMBS borrower gives up a lot of control over the property’s finances,” Patel wrote.
And a CMBS borrower can be considered in default even if they are making their monthly payment if their debt service coverage ratio drops too low.
“Certainly, we’ve all seen what can happen when excessive optimism mixes with excessive leverage,” he wrote.
At the end of the article, Patel concluded that hoteliers consider “funding channels that are more suited to the world of 2018” when the threats to the industry came from over supply and OTAs. In the world of the current pandemic, many may wish they had heeded that advice.
“Many of the lodging folks haven’t really understood how CMBS loans are structured, they just believe it’s a normal loan,” he said. “They’re not a normal loan. [Some hoteliers are] not ready for this.”
Marriott launches Outdoor Collection and Bonvoy Outdoors platform.
First two brands are Postcard Cabins and Trailborn Hotels.
Platform features 450+ hotels, 50,000 homes and activities.
MARRIOTT INTERNATIONAL RECENTLY launched the brand “Outdoor Collection by Marriott Bonvoy” and introduced “Marriott Bonvoy Outdoors,” a digital platform that lets travelers plan trips by destination or activity. The first two brands in the Outdoor Collection are Postcard Cabins and Trailborn Hotels.
Outdoor Collection offers stays such as cabins near national parks and hotels on cliffs, providing access to nature along with basic guest needs, including beds, running water and restrooms, Marriott said in a statement.
The Marriott Bonvoy Outdoors platform includes 450 hotels, 50,000 homes and villas, and tours and activities, the statement said. Postcard Cabins has 1,200 cabins across 29 U.S. locations within two hours of major cities and Trailborn Hotels offers properties in the Blue Ridge Mountains, the Grand Canyon, and Wrightsville Beach, North Carolina.
“We built Marriott Bonvoy Outdoors to help people, whether that’s cresting a mountain trail, catching the perfect wave, or simply finding quiet under the stars,” said Peggy Roe, Marriott's executive vice president and chief customer officer. “Travel is at its best when it speaks to who we are and what we love. It’s about reconnecting with yourself and the people you love in the places that inspire you most. With the new Outdoor Collection by Marriott Bonvoy, our curated Marriott Bonvoy Moments and activations like the Drop Pin Challenge with Dylan Efron, we’re not just offering places to stay, we’re opening doors to experiences that inspire, connect and stay with you forever.”
Marriott Bonvoy partnered with Dylan Efron on the Drop Pin Challenge, a treasure hunt across 20 U.S. and Canadian locations with 10 million points at stake. Travelers can visit marriottbonvoyoutdoors.com for rules and locations and the first 50 eligible participants to scan each pin earn 10,000 points. The platform is also partnering with Outside Interactive to offer Marriott Bonvoy Moments that connect guests with nature and activities.
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Peachtree adds six hotels to third-party platform.
Five are owned by La Posada Group, one by Decatur Properties.
Third-party portfolio totals 42 hotels.
PEACHTREE GROUP’S HOSPITALITY management division added six hotels to its third-party management platform. Five are owned by La Posada Group LLC and one by Decatur Properties Holdings.
La Posada’s hotels include Fairfield Inn Evansville East in Evansville, Indiana; Fairfield Inn Las Cruces and TownePlace Suites Las Cruces in Las Cruces, New Mexico; and SpringHill Suites Lawrence Downtown and TownePlace Suites Kansas City Overland Park in Kansas, Peachtree said in a statement.
It also assumed management of Decatur Properties’ Hampton Inn in Monahans, Texas.
“Our third-party management business is experiencing growth and these six hotels demonstrate the trust owners are placing in our team,” said Vickie Callahan, president of Peachtree’s hospitality management division. “We have experience managing hotels and managing operations for partners who have entrusted us with their assets. We are committed to protecting asset value, driving results for partners and delivering a strong guest experience.”
The division manages hotels across brands and markets nationwide, the statement said. It operates 115 hotels across 29 brands with 14,212 rooms in 27 states and Washington, D.C. The additions bring its total third-party operations to 42 hotels.
Callahan said the team uses scale, operating systems and brand relationships to optimize revenue, control costs and improve guest satisfaction.
Atlanta-based Peachtree is led by Greg Friedman, managing principal and CEO; Jatin Desai, managing principal and CFO and Mitul Patel, principal.
AHLA Foundation distributed $710,000 in scholarships to 246 students.
Nearly 90 percent of recipients come from underrepresented communities.
The foundation funds students pursuing education and careers in the lodging sector.
AHLA FOUNDATION DISTRIBUTED $710,000 in academic scholarships to 246 students at 64 schools nationwide for the 2025–2026 academic year. Nearly 90 percent of recipients are from underrepresented communities, reflecting the foundation’s focus on expanding access to hospitality careers.
The foundation awards academic scholarships annually to students in hospitality management and related programs, it said in a statement.
“Our scholarship program is helping ensure the next generation of talent has the resources to pursue careers in the hospitality industry,” said Kevin Carey, AHLA Foundation's president and CEO. “We’ve invested millions of dollars over the last several decades to recruit and support future leaders who will strengthen our industry.”
It provides funding to help students pursue education and careers in the lodging sector, the statement said. Award decisions are based on applicants’ academic performance, extracurricular involvement, recommendations and financial need.
In September, AHLA Foundation, the International Council on Hotel, Restaurant and Institutional Education and the Accreditation Commission for Programs in Hospitality Administration announced plans to expand education opportunities for hospitality students. The alliance aim to provide data, faculty development and student engagement opportunities.
The U.S. government shut down at midnight after Congress failed to agree on funding.
About 750,000 federal employees will be furloughed daily, costing $400 million.
Key immigration and labor programs are halted.
THE FEDERAL GOVERNMENT shut down at midnight after Republicans and Democrats failed to agree on funding. Disputes over healthcare subsidies and spending priorities left both sides unwilling to accept responsibility.
“A shutdown is a wholly preventable blow to America’s travel economy—costing $1 billion each week—and affecting millions of travelers and businesses while straining an already overextended federal travel workforce,” Freeman said. “While Congress recently provided a $12.5 billion down payment to modernize our nation’s air travel system and improve safety and efficiency, this modernization will stop in the event of a shutdown.”
USTA said that halting air traffic controller hiring and training would worsen a nationwide shortage of more than 2,800 controllers and further strain the air travel system.
About 750,000 federal workers are expected to be furloughed each day at a cost of about $400 million, according to the Congressional Budget Office. Essential services to protect life and property remain operational, CNN reported. The Department of Education said most of its staff will be furloughed, while the Department of Homeland Security will continue much of its work. Agencies released contingency plans before the deadline.
Immigration services are directly affected. Most U.S. Citizenship and Immigration Services operations continue because they are fee funded, but programs relying on appropriations—such as E-Verify, the Conrad 30 J-1 physician program and the special immigrant religious worker program—are suspended. Houston law firm Reddy Neumann Brown said employers must manually verify I-9 documents if E-Verify goes offline, though USCIS has historically extended compliance deadlines.
The Department of Labor will halt its Office of Foreign Labor Certification, freezing labor condition applications for H-1B visas, PERM applications and prevailing wage determinations, India’s Business Standard reported. Its FLAG system and related websites will also go offline. Immigration lawyers warn of ripple effects, since USCIS depends on DOL data. The Board of Alien Labor Certification Appeals and administrative law dockets will also pause.
Visa and passport services at U.S. consulates generally continue because they are fee funded. If revenue falls short at a post, services may be limited to emergencies and diplomatic needs.
Reuters reported that the disruption could delay the September jobs report, slow air travel, suspend scientific research, withhold pay from active-duty U.S. troops and disrupt other government operations. The funding standoff involves $1.7 trillion in discretionary agency spending—about one-quarter of the $7 trillion federal budget, according to Reuters. Most of the rest goes to health programs, retirement benefits and interest on the $37.5 trillion national debt.
According to The New York Times, unlike previous shutdowns, Trump is threatening long-term changes to the government if Democrats do not concede to demands, including firing workers and permanently cutting programs they support.
The U.S. led global travel and tourism in 2024 with $2.6 trillion in GDP, WTTC reported.
India retained ninth place with $249.3 billion in GDP.
The sector supported 357 million jobs in 2024, rising to 371 million in 2025.
THE U.S. LED global travel and tourism in 2024, contributing $2.6 trillion to GDP, mainly from domestic demand, according to the World Travel & Tourism Council. Europe accounted for five of the top 10 destinations, while India ranked 9th.
WTTC opened its 25th Global Summit in Rome with research showing investment reached $1 trillion in 2024, led by the U.S., China, Saudi Arabia and France.
“These results tell a story of strength and opportunity,” said Gloria Guevara, WTTC interim CEO. “The U.S. remains the world’s largest travel and tourism market, China is surging back, Europe is powering ahead, and destinations across the Middle East, Asia and Africa are delivering record growth. This year, we are forecasting that our sector will contribute a historic $2.1 trillion in 2025, surpassing the previous high of $1.9 trillion in 2019. As Italy hosts this year’s Global Summit, its role as a G7 leader showcases the importance of tourism in driving economies, creating jobs and shaping our shared future.”
The U.S. kept its top position, but international visitor spending is expected to fall by $12.5 billion in 2025, limiting growth to 0.7 percent. China, the second-largest market, contributed $1.64 trillion in 2024 and is forecast to grow 22.7 percent this year. Japan, the fifth-largest market, is expected to rise from $310.5 billion to nearly $325 billion.
Italy, which hosted the summit and is a G7 member, contributed $248.3 billion in 2024, driven by international visitors and the meetings and events sector. Germany, the third-largest market, contributed $525 billion. The UK generated $367 billion despite a fall in international visitor spending, while France and Spain added $289 billion and $270 billion. Europe’s growth was supported by both cultural and modern sectors.
India contributed $249.3 billion in 2024. In June, WTTC reported international visitors spent $36.09 billion in India in last year, up 9 percent from 2019.
Jobs on the rise
Travel and tourism supported 357 million jobs in 2024 and is expected to reach 371 million in 2025, increasing its share of global employment, the WTTC report found. By 2035, the sector is projected to support one in eight jobs worldwide, adding 91 million positions—most in Asia-Pacific—and accounting for one in three new jobs globally.
Uncertainties over trade tariffs and geopolitical tensions could limit sector growth in 2025, the report said. Travel and tourism’s GDP contribution is forecast to rise 6.7 percent, returning toward pre-pandemic averages but still outpacing the 2.5 percent growth projected for the global economy.
The sector is expected to contribute $11.7 trillion, or 10.3 percent of global GDP and add 14.4 million jobs, bringing total employment to 371 million, or 10.9 percent of global jobs. International visitor spending is projected to fully recover, rising 8.6 percent above 2019 levels to nearly $2.1 trillion, while domestic visitor spending is expected to rise 13.6 percent to $5.6 trillion. Annual growth for 2025 is forecast at 10 percent for international and 5.1 percent for domestic spending.
In May, WTTC projected the U.S. stood to lose $12.5 billion in international travel spending this year, falling to under $169 billion from $181 billion in 2024. The council said U.S. needs to do more to welcome international visitors rather than “putting up the ‘closed’ sign.”