Source: The Center Square
By Kimberly Jones
September 2, 2020
(The Center Square) – The coronavirus pandemic has been rough on America’s hotel and tourism industry, and Indiana has not been exempt.
After beaches closed, sports tournaments and festivals were canceled and travel slowed to a near halt, hotel rooms sat mostly empty.
“To date, [Indianapolis] has lost 306 conventions tallying more than $541 million in lost economic impact,” Chris Gahl, senior vice president of marketing and communications at Visit Indy, told The Center Square. “These represent lost business in 2020 and 2021.”
With that loss of business has come high unemployment.
“Out of the 83,000 men and women who depend on tourism for a paycheck, roughly 40,000 of these Indy residents are currently unemployed,” Gahl said.
Nationally, one out of every four hotels has missed at least one payment on their commercial mortgage. Delinquencies on hotel loans have risen from 1.3 percent at this time last year to 23.4 percent, according to data from Trepp. Nearly $20.6 billion in hotel loans were delinquent in July, higher than the $13.5 billion in delinquent loans during the Great Recession.
Some hotels are so far behind on their mortgage payments that they are facing foreclosure and are at risk of having to close their doors permanently.
The tourism industry is lobbying Congress to pass further economic relief packages.
“We need Congress to provide hotel owners with real relief that addresses the needs of small businesses with commercial real estate assets,” Cecil Staton, president and CEO of the Asian American Hotel Owners Association, told The Northwest Indiana Times. “Hoteliers are responsible for millions of jobs in communities across the nation, but unless Congress acts, there may not be businesses left for those workers to return to at the end of this pandemic.”
The Helping Open Properties Endeavor Act of 2020 would provide relief to small businesses that hold commercial mortgage-backed security loans. The bill would use funds from the Economic Stabilization Fund, part of the CARES Act signed in March. The act would provide loans of up to 10 percent of a property’s mortgage debt. Nearly 4,000 hotel industry leaders signed a letter to Congress asking for immediate action to prevent foreclosures and save jobs.
There is hope that once hotels receive some federal help that the travel and tourism industry, like the rest of the economy, will build its way back to its former condition. Changes are already being seen in Indianapolis.
“Over a 40 day period, July 7-August 16, the city hosted 18 conventions, safely bringing in 40,000 attendees – each working with our health department to have health and safety plans stamped approved,” Gahl said.