Stimulus Impasse Risks Dragging to September, Imperiling Economy


Source: Skift
By Cameron Sperance

August 13, 2020

While the next iteration of coronavirus relief from the U.S. Congress faces an uphill battle in Washington, hotel industry leaders rolled out a new wish list of key measures they say would be vital to ensure hoteliers stay afloat for another year.

But what will it take to get the federal help the U.S. hotel industry so desperately needs? Perhaps a structural change in how it deals with political leaders.

“The airline and auto industries are huge oligopolies and have been bailed out several times to save jobs,” said Remington Hotels CEO Sloan Dean. “Nothing has ever been done for hotels. Even if we are a bunch of small businesses, we are still a huge employer. Our fragmentation is why our lobbying efforts haven’t been as successful.”

U.S. President Donald Trump signed four executive orders earlier this month aimed at providing coronavirus relief and to execute a workaround to stalled talks on Capitol Hill. But the measures, which include $400 in added federal unemployment benefits to individuals and a payroll tax break, don’t go far enough for the struggling hotel industry, argued American Hotel & Lodging Association President Chip Rogers last weekend in a prepared statement.

The AHLA and other travel industry groups still want to see an extension of the Paycheck Protection Program small business loan initiative born from the $2 trillion relief measure passed in March. The original PPP initiative expired at the end of June and still has about $130 billion in untapped funding.

The trade groups also want Congress to pass business liability protections against coronavirus exposure claims and make adjustments to the Main Street Lending Program to give hoteliers access to further liquidity.

The Main Street Lending initiative offers loans to small and medium-sized businesses, but the hotel industry argues its debt caps essentially shut out hoteliers, who typically carry higher amounts of debt in the form of mortgages on their real estate.

“What we need is some type of credit facility and addressing of the debt in hotels by the federal government,” Dean said. “There is a wave of foreclosures coming. [Congress] gave this huge credit facility to airlines and didn’t do anything for hotels.”

While Dean and other industry leaders would also like to see measures like a tax incentive to get Americans to travel, they recognize the next few months are still about survival rather than mitigation and recovery from the cratered demand in travel.

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