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The $2 trillion U. S. economic relief package approved Friday to offset the economic slowdown caused by the coronavirus is more of a lifeline than a stimulus package for the hospitality industry, according to the chief executive of one of the sector’s largest industry groups.
U. S. President Donald Trump on Friday signed into law the Coronavirus Aid, Relief, and Economic Security Act, or CARES. Many hotel operators are eligible for a portion of the $500 billion in loans and loan pledges that the $2 trillion emergency spending package includes for businesses. hit hard by the coronavirus economic crisis.
While Chip Rogers, CEO of the American Hotel
“It’s a lifesaver,” Rogers said Monday in an interview with Skift. “To call it a stimulus package, I wouldn’t agree with that. Lately hoteliers are in survival mode, and at some point, we’re going to want a genuine stimulus package.
After the House passed the CARES Act on Friday afternoon, the AHLA issued a signal of support, but noted that it was disappointed with the limits placed on Small Business Administration loans in the final bill. The loans are intended to enable commercial operators to pay rent. or mortgages, as well as salaries and other operating costs.
The CARES Act loan limit is capped at 250% of a company’s average monthly payroll, which the AHLA says is enough to allow hoteliers to meet their payroll and debt-servicing obligations for four to eight weeks. But the industry organization sought to have the limit set at an upper limit of 400%.
“The challenge is that if you keep all of your staff on full pay, you may not have any more resources to pay off the debt,” Rogers said. “As you know, you have to pay off your debt first, otherwise you don’t have any business. “
Companies such as Marriott, Hilton and Hyatt have laid off tens of thousands of workers, while occupancy rates in some households are falling to single-digit levels. This week’s April 1 deadline for hiring and loan invoices will be the first monetary hurdle for the industry in the current economic downturn due to the coronavirus. For the most part, Rogers said he’s heard of lenders and homeowners providing short-term forbearance on upcoming bills.
But it is under pressure that changes to the existing law as well as the law are needed in the long term, as it will take more than 4 to 8 weeks for the call to return to general levels.
“We need to make sure that workers and the hospitality industry are taken care of first,” Rogers said. “We’re not here for anything special, just to cover fundamental desires and make sure workers have a job. That’s why debt servicing is so important. »
Rogers declined to elaborate on what a genuine stimulus package for the industry would look like and said what the AHLA needs to adjust in the new law. The CARES Act grants SBA loan forgiveness to corporations that rehire unemployed workers through June 30, but the AHLA does. He doesn’t expect the hospitality industry to be fully recovered by then. Instead, the organization needs the deadline to be extended.
“We don’t expect the industry to come back until June 30,” Rogers said. “By pushing that date back to a later date, say to Sept. 30, it would allow the industry to return to full employment and not face monetary penalties. “.
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Tags: ahla, care law, coronavirus
Photo credit: While the American Hotel.
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