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Relief Effort

AHLA, U.S. Travel Association Appeal To Government For Help For Lodging Industry

Wednesday, March 18, 2020
Dennis Nessler
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Describing the White House as ‘receptive’ to the lodging industry’s plea for considerable financial relief as a result of the impact of the Coronavirus, Chip Rogers of the AHLA provided a snapshot of the financial impact already taking place.

Rogers—president and CEO of AHLA (American Hotel Lodging Association)—and other travel industry leaders pleaded their case yesterday for some $150 billion in funding directly to President Trump, Vice President Pence and other elected officials. Rogers began the media conference call by pointing out that the economic impact of the Coronavirus on the lodging industry has already exceeded that of Sept. 11 and the 2008 recession combined.

Pointing out that some 61 percent of the association’s hotel members are small business owners, he talked about what’s potentially at stake for the entire industry.

“From major cities to Main Street USA our 33,000 small business hotels across the country are facing the difficult decision right now whether to close their doors and lay off millions of people over the next few days; not weeks, not months, but days. Many have, in fact, already closed,” he said.

Rogers provided some sobering statistics as well noting that hotel occupancy has fallen to levels somewhere between 10 and 20 percent in major markets nationwide. As a result, he added that this could mean 140 million rooms or more could be empty in the next 30 days alone.

According to Rogers, the hotel industry is currently estimating a loss of 4 million jobs in 2020. In addition, current projections are for a year-long occupancy rate of about 30 percent, which equates to $180 billion in lost wages and a $300 billion hit to the national GDP.

“This is crippling the hotel industry and the local communities they serve as well as the U.S. economy,” he said.

Rogers further explained the request for funds from the AHLA and the U.S. Travel Association. “Given these unprecedented circumstances the urgent steps we have recommended for the White House and Congress are more important today than ever. Our small business hoteliers need critical relief so that they can stay open and continue to employ hard working americans,” he said.

Jon Bortz, Chairman of the AH&LA, as well as Chairman, President and CEO of Pebblebrook Hotel Trust—a hospitality REIT with 54 hotels and some 13,000 rooms—drove home the point by detailing the impact on his company.

Bortz noted that his company has already laid off some 4,000 of its roughly 8,000 employees because of low single-digit occupancies and is likely to lay off some 2,000 more shortly. He also noted the company has already closed more than half of its hotels.

“This is the reality we and countless other owners and operators around the country are facing in the wake of this public health situation and the effective elimination of demand. Today we asked the White House to take immediate action providing solutions focused on protecting millions of jobs by providing relief to our small business operators and franchise owners,” he said.

Bortz offered some specifics on how any funds would be used. “These solutions include keeping people employed and the economy moving by retaining and rehiring employees; keep hotels from shutting down through access to liquidity; and low interest loans, including for small businesses,” he said.

Roger Dow, President and CEO, U.S. Travel Association (USTA), reinforced the point by pointing out that 83 percent of the travel industry is represented by small businesses. He further added the USTA is projecting some 4.6 million jobs lost, which could take the U.S. from 3.3 percent overall unemployment to more than 6 percent unemployment and “will usher in a recession.”

He further explained the request for $150 billion in relief.
“Right now it’s important fast to keep these people working and to keep these businesses operating all across the travel industry and that’s going to take several hundred billion dollars. It sounds like a big number but in contrast to what can be lost and what’s at stake in the U.S. economy it is a necessary number,” he said.

Meanwhile, Doug Dreher, CEO, The Hotel Group—an owner/operator with a good portion of its portfolio in Washington State, particularly the Seattle area—also commented on the impact in the Northwest.

“It’s really bad out here and it has been right from beginning. We got hit right after the announcement that Amazon was suspending travel. We’ve gone from 80 percent occupancy to the single digits. Today we’ll be suspending operations at one of our Hilton branded hotels with two others coming. A third of our work force will be let go in the immediate term. It is for us the Great Depression,” he said.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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