AHLA Believes Hotel Industry is on 'Brink of Collapse'

The American Hotels & Lodging Association (AHLA) is calling directly upon the U.S. Congress to prioritize financial assistance for hotel workers and small businesses in the next wave of COVID-19 economic relief legislation. Business Travel News cited the AHLA as having referred to the hotel industry as currently being on the “brink of collapse”.

“The hospitality industry is in a fight for survival,” said AHLA president and CEO, Chip Rogers. “We are grateful to the leadership of both parties during one of the most difficult health and economic challenges we have faced. We are urging Congress to do even more to help the hotel industry so that our small hotel operators can keep the lights on, and retain and rehire employees.”

New data from the Bureau of Labor Statistics (BLS) revealed that the hospitality and leisure industry is the hardest-hit sector of the U.S. economy by far, with 7.7 million jobs lost in April alone. That’s more job losses than those sustained by the construction, manufacturing, retail, education, and health services sectors combined, said AHLA’s letter to Congress, dated May 20, 2020.

Along with its letter, the AHLA provided its recommended ‘Roadmap to Recovery’ plan, calling for action on several key points, including:

—Expanding the Employee Retention Credit (ERC) from the ‘Coronavirus Aid, Relief, and Economic Security (CARES) Act’.

—Providing tax credits for certain expenditures, especially in light of enhanced sanitation measures and the provision of personal protective equipment by hotels in order to continue operating.

—Offering employees tax credits or direct tuition assistance for continuing education, in light of furloughs and job losses resulting from the pandemic.

—Extending the Paycheck Protection Program (PPP) through December 31, 2020, and expanding the scope and flexibility of PPP loans.

—Extending federal loan maturity from two years to a minimum of five years.

—Extending the re-hiring deadline to December 31, 2020, for loan forgiveness purposes.

—Providing hotels that reopen and adhere to proper public health guidance protection under a limited ‘safe harbor’ provision, applicable to guests and employees, from exposure liability related to COVID-19.

—Creation of a ‘Commercial Mortgage-Backed Securities (CMBS) Market Relief Fund’ to keep hotels in cash-flow crisis from defaulting on their mortgages.

—Creation of a ‘Federal Pandemic Risk Insurance Program’ to protect operators against future pandemic outbreaks and associated losses.

—Incentivizing travel through increased testing to reassure the public; set federally-imposed per-diem rates for the fiscal year 2021-22, based upon 2019 data; reinstate entertainment, food and beverage-related tax deductions as business expenses; and create a temporary Travel Tax Credit, similar in purpose to the homebuyer tax credit applied following the 2008 housing crisis.

AHLA hopes that such concessions would enable the hospitality industry to survive the devastation that’s been dealt out by the COVID-19 crisis, whose impact the organization called “worse than the Great Depression”. Thus far, experts say, the pandemic has caused the industry nine times the damage it suffered in the wake of the 9/11 attacks. 2020 is forecast to become the single worst year on record in terms of hotel occupancy, and predictions indicate that the sector won’t bounce back to its 2019 levels until at least 2022.

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