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Further ‘Stating’ Its Case

By Dennis Nessler | September 30, 2020

Continuing its campaign to convince Congress to pass another COVID relief bill, the AH&LA highlighted some of the hardest hit states with various association leaders pleading the industry’s case for additional funding in a media conference call yesterday.

A recent AH&LA poll conducted in mid-September revealed that if Congress fails to pass another COVID stimulus bill some 74 percent of hotels surveyed would be forced to lay off additional employees, while 67 percent of hotels would not make it another 6 months.

Chip Rogers, President/CEO, AH&LA (American Hotel & Lodging Association), hosted the call and delivered a clear message to Congress regarding the impact of the pandemic and the need for additional funding.

“Back in March you considered this such a significant threat to our nation’s economy that you passed the single largest spending package in the history of the world,” he said.

Rogers further acknowledged that the PPP [Payroll Protection Program] was “very valuable to our industry,” while detailing the economic realities.

“While it was a great program you [Congress] anticipated this would last 8 to 10 weeks. We’re now almost 6 months into this and there has not been another round of PPP. There are businesses particularly in and around tourism—whether they be hotels, restaurants or airlines—that are desperately needing some help just to get to the other side. If we can make it through to next spring and summer we think things will begin to pick up in a significant way. But if we can’t make it better then we’re going to have a lot of unnecessary pain that will result in taking what could be a six- to eight-month problem and turning it into a three- to four-year problem,” he said.

Robert Habeeb, President/CEO, Chicago-based Maverick Hotels & Restaurants, noted that during the summer the industry saw a “bit of light” after the CARES act  was passed and some employees were brought back but he insisted it’s not nearly enough.

“There’s no question that a vaccine in 2021 is going to come far too late for many hotels and restaurants that are now piling up tons of debt and falling further and further behind with their creditors. The prospect of a widespread liquidity crisis in the hospitality sector is indeed not exaggerated. The face of hospitality might look very different in the U.S. a few months from now if we don’t see some relief and relief quickly from Washington,” he said.

Lynn Mohrfeld, President and CEO, the California Hotel & Lodging Association (CH&LA), noted that as of September the state had lost roughly 108,000 jobs while adding that number is expected to almost double to approximately 200,000 if there is no relief. He also noted that nearly 6,000 hotels have been closed or foreclosed on since the pandemic began.

“It’s no secret that California’s hotel industry has been decimated by the impact of COVID-19. Since travel and tourism is one of the pillars of our state economy, unfortunately we can expect this impact to be felt for several years at a minimum. This is particularly true for our employees. It’s almost unfathomable to think that we haven’t experienced the worst yet. With our traditionally slow season coming up it’s going to get worse before it gets better,” he said.

Bijal Patal, Chairman 2020, CH&LA, and CEO, Coast Redwood Hospitality, compared the current pandemic to past challenges the industry faced.

“Though we have operated through oil crises, natural disasters, war, terrorism, and even recessions, nothing can quite compare to the hardships and fears that we have been experiencing over the last six months with no end in sight,” he said, further adding that many of the local attractions that would normally bring in guests, such as Disney and others, remain closed.

Patel noted that as of the end of August Coast Redwood Hospitality’s properties were averaging only 41.2 percent occupancy compared to 74.6 percent at the same time last year. “We are uncertain how we can survive the winter,” he said.

Carol Dover, President and CEO, Florida Restaurant & Lodging Association, pointed out that as of September the state had the second highest direct hotel job loss compared to California with some 76,000. In addition, hotel support job loss in the state has exceeded 172,000, according to Dover.

“We have to get Congressional help, it’s the only thing that helped us survive before. The industry is on life support and without this final piece to help us get off life support there will be thousands and thousands of jobs lost,” she said.

Michael Jacobson, President and CEO, Illinois Hotel & Lodging Association, detailed the industry’s struggles in the state. He noted that while occupancy is around 50 percent nationally, that number is hovering around 20 percent in Illinois, particularly in Chicago. He further added half of the state’s hotels are at risk for foreclosure without further help and with the winter season on the way.

“We need Congress to act and act now. The hotel industry is one of the largest economic engines and tax generators for the state of Illinois. In fact, every Illinois household would pay some $1,600 more per resident without the revenue we generate. Our community simply can’t afford for us to fail,” he said.

 

Credit
Dennis Nessler
Editor-in-Chief

Dennis Nessler is Editor-in-Chief of Hotel Interactive, parent company of Hotel Community Forum. Nessler brings more than 28 years of editorial experience to his position, including some 17 years in the hospitality industry. As part of his duties, Nessler not only covers the industry editorially but moderates various high-level panel sessions at hospitality events and frequently conducts one-on-one interviews with C-level executives.


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