On November 20, American Hotel & Lodging Association President and CEO Chip Rogers issued a harsh rebuke to the federal government for its handling of the Main Street Lending Program designed to help small businesses, including many hotels, remain solvent through the Covid-19 pandemic.
“The Treasury Department’s inability to deploy the Main Street Lending Program, with only an embarrassingly small fraction being distributed of the more than half-a-trillion-dollar capacity allocated from the CARES Act, will go down in U.S. history as one of the worst bureaucratic blunders of economic policy,” he said.
Rogers’ frustration comes on the heels of the most recent AHLA member survey, which found that 71 percent of respondents won’t be able to remain in business another six months given projected travel demand unless they receive more federal assistance, up from 66 percent two months ago. In addition to the lackluster impact of the Main Street Lending Program, the U.S. Congress has not been able to agree on a second stimulus package that would include the Paycheck Protection Program to allow hotels and other businesses to continue paying their staffs.
With the first PPP program ending on December 31, Rogers says that without an extension of financial relief, “more than one-third of AHLA’s members will be facing bankruptcy or be forced to sell by the end of 2020.” Overall, 59 percent of responding AHLA members said they are in danger of foreclosure by their lenders—a 10 percent increase from two months ago.
Making matters worse, AHLA’s members must contend with the consequences of the recent resurgence in Covid-19 cases: new travel restrictions across many states as well as urgent requests by elected officials that people not travel during the upcoming holidays. “With a significant drop in travel demand and seven in 10 Americans not expected to travel over the holidays, hotels will face a difficult winter,” Rogers says. “We need Congress to prioritize the industries and employees most affected by the crisis. A relief bill would be a critical lifeline for our industry to help us retain and rehire the people who power our industry, our communities, and our economy.”
While good news came this week in the form of a third Covid vaccine showing promising results in trials, the uncertainty over when enough people could be vaccinated to restart business travel and leisure travel provides no comfort to hotel owners and managers.
In the meantime, says Rogers, “Congress should be outraged [at the U.S. Treasury Department] and immediately re-appropriate the unused $455 billion in Main Street Lending program funds to provide targeted relief to severely distressed industries such as the hotel industry.” The U.S. Congress is in session from November 28 to December 20, and then reconvenes on January 3, 2021.