Hotel industry, reeling from COVID-19 economic fallout, calls for help

As lawmakers consider additional legislation to address the ongoing health crisis and economic fallout from COVID-19, the American Hotel & Lodging Association (AHLA) sent a letter to Congress calling for additional help in several areas, including extending the Paycheck Protection Program (PPP) for severely impacted businesses and their employees, creating targeted lending facilities and liquidity measures to help hoteliers meet debt service, and passing tax reforms to benefit both hotel employees and employers. Together, these provisions will help ensure hotels can retain and rehire employees, protect employees and guests, keep hotel doors open, and incentivize Americans to travel again when it’s safe.

The hotel industry has been historically impacted by the COVID-19 health crisis. According to the Bureau of Labor Statistics (BLS), the leisure and hospitality sector has lost 4.8 million jobs since February—more jobs than construction, manufacturing, retail, education, and health services combined. The human toll on hotel employees and the hotel workforce is devastating, with hotels still staffed at less than half their pre-pandemic levels. The economic impact is the worst the industry has ever faced.

“Our industry was among the first impacted by the pandemic and will be one of the last to recover. We are a major economic driver, supporting millions of jobs and generating billions in tax revenue. Getting our economy back on track starts with supporting the hotel industry and tourism in general,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association. “We need Congress to continue to prioritize the industries and employees most affected by the crisis, so that help is directed to the businesses that need it most.”

AHLA is urging Congress to provide immediate assistance in these areas:

• Provide additional liquidity for severely impacted businesses through a targeted extension of the Paycheck Protection Program (PPP).
• Create hotel industry relief opportunities utilizing Federal Reserve and Treasury authority.
• Establish a Commercial Mortgage Backed Securities (CMBS) market relief fund, with a specific focus on the hotel industry, as part of the Federal Reserve’s lending options.
• Make structural changes to the Main Street Lending Facility established under the CARES Act to ensure hotel companies can access the program.
• Include limited liability language to provide a limited safe harbor from exposure liability for hotels that reopen and follow proper public health guidance.
• Include targeted tax provisions that will benefit severely injured businesses and their employees, including tax credits for capital expenditures or expenses to meet the industry’s Safe Stay initiative; enhanced Employee Retention Credit (ERC); a temporary travel tax credit; exempting taxation on phantom income from loan modification forgiveness or cancelation; and allowing full deductibility of the food and entertainment business expense.

A recent survey conducted by Morning Consult commissioned by the AHLA found that Americans overwhelmingly support efforts by Congress to help the travel industry recover:

• 70 percent of Americans support passing additional economic stimulus for the industries most negatively impacted by the pandemic, including the travel and hospitality sectors.
• By almost a 3 to 1 ratio, Americans support a new, temporary federal travel tax credit to encourage people to travel (61% support, 21% oppose).
• By more than a 2 to 1 ratio, Americans support restoring the business entertainment expense deduction to encourage business travel (57% support, 21% oppose).
• Almost two-thirds of Americans support efforts by the federal government to require banks to offer debt relief or forbearance on commercial hotel mortgages (63% support, 16% oppose)

“With a presence in every congressional district in America, hotels are central to getting our economy back on track and supporting millions of jobs. Americans overwhelmingly support efforts by Congress to provide the hotel industry with additional support so that we can keep our doors open and bring back our employees,” concluded Rogers.

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