Congress Must Help Hotel Workers & Owners Survive
President Trump hosted executives from the nation’s leading hotel brands at the White House Tuesday to discuss the most damaging economic crisis in the industry’s history. As a hotelier himself, the President does not need to be educated about the impact the coronavirus pandemic is having on the hospitality industry. But the President and Congress need to know why their efforts to help the industry must extend to thousands of hotel owners who must stay in business so that a recovery can thrive.
The president has so far agreed to the airline industry’s request for $50 billion in assistance. He also has made clear that he supports broader efforts to help numerous other sectors of the economy, including hotels. This is critical when you consider that U.S. hotels employ 2.3 million workers, support 8.3 million jobs in total, and contribute $660 billion annually to the national GDP.
What members of Congress may not know is that over 60% of hotels in America are small businesses — 33,000 in all. This means that any assistance to the industry should be oriented to help hotel workers first, and the business owners who employ most of them second.
The president heard that Marriott and Hilton, the two best-known and respected hotel brands, are laying off thousands of employees. While the impact to these industry leaders is large, the largest cost falls to hotel owners. They’re the ones who ultimately pay to support hotel staff.
My company owns many of these hotels, as well as others that we operate under our own and other brands. This makes us a good example for Congress to study.
For example, we own 128 hotels in multiple states, which employ an average of 112 workers each. Due to the unprecedented crisis, we have been forced to lay off or furlough more than 6,000 employees. This is a catastrophe for our associates, who have no way to know if we will be able to bring them back to work.
Our first priority is to protect the interests of our associates. As the owner of the hotels that employ them, our only chance at helping to bring them back to work is to obtain the same relief that is being provided to airlines. This means we need more innovative thinking than has so far been offered to the President or Congress.
First, we appreciate the fact that policymakers are focused on helping employees first until they can get back to work. Second, hotel owners need relief that will allow them to delay debt payments on their hotels — we cannot pay wages to employees or any other bills when our occupancy rates are near-zero. Hotel owners need to use their now paltry cash flows to keep employees working and maintain operations. That means any relief legislated from Washington should allow debt payments to be delayed for at least 18 months. Hotel owners may also need cash assistance to help with liquidity problems at the hotel level to meet basic operating costs.
Congress should also consider innovative tax deductions on businesses and leisure travelers to ensure travel will resume quickly when the current crisis ends. Imagine a 400% deduction for businesses and individuals for travel that everyone hopes will resume this summer — this would be rocket fuel for a recovery, and could be phased out as the economic engine winds up.
President Trump and Congress are moving quickly to address our national crisis. In the case of the hospitality industry, the situation is significantly worse than the aftermath of 9/11 and the financial crisis. Drastic economic action will be needed to ensure our recovery. It is critical that owners can stay afloat — much like the airlines — in order to accommodate the traveling public and bring employees back to work.
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Monty Bennett is CEO of Ashford Inc., which owns and operates hotels.
