Consulting a qualified expert may open the financial lifeline your business needs
In March 2020, with the world shutting down, Lark Hotels CEO Peter Twachtman was forced to temporarily suspend operations for 20 of his hotels in seven states due to COVID-19.
As it did for many other hoteliers who’ve universally been battling diminishing NOIs, the rising cost of labor, and increased competition from Airbnb and VRBO, the mandated shutdowns felt like a coup de grâce. Twachtman, however, was resilient and motivated to adapt and overcome the challenges the pandemic brought to the industry.
Especially in the earliest days of the pandemic, hoteliers were forced to adjust their operations on what felt like a daily basis, including modifying staff schedules, operating with minimal occupancy levels, and enforcing new sanitization protocols. These, and many other, factors added to the perfect storm of economic hardship that was brought on by COVID-19.
To survive, numerous hospitality employers applied for and received PPP loans. Many also examined the employee retention tax credit, although, with a number of legislative changes since it was introduced, properly applying for the credit proved to be a complicated and scary process for many.
“It seemed complex and overly burdensome, so I shelved it,” said Twachtman, of Lark Hotels’ decision not to apply for ERTC funds.
In its simplest terms, ERTC is a CARES Act relief measure for businesses, which encourages them to keep employees on their payroll. It’s a refundable credit that offsets employment taxes. According to the United States Treasury Department, “the amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.” Simply put, this offering has been one of the most beneficial tax credits available to hotels financially impacted by COVID-19.
THIS, TOO, SHALL PASS
After sorting out the ups and downs of the application process, with help from an outside consultation, Lark Hotels was ultimately approved to receive ERTC funds, giving the company the financial support to prevent further interruptions in business activities and look to the future with confidence.
“When COVID-19 first hit our industry back in late February 2020, we were composed of 26 hotels in seven states, but we are now 42 hotels across 10 states.” Twachtman said. “What was, and is still, surprising to me are all the people and groups I speak with that haven’t taken the time to look at the ERTC and see if their business qualifies.”
Twachtman’s story proves there is light at the end of the tunnel for hotels still struggling to pay their staff, and Lark Hotels, like countless properties, proved once again that hoteliers are resilient and can thrive during troubling times.
Don’t leave money on the table, especially if it could mean the difference between staying in business or closing your doors for good. There are numerous resources available to struggling hoteliers, and even if you’ve looked at them all before, a qualified consultant likely can pinpoint some options you may have overlooked or dismissed before.