Three publicly traded Texas-based hospitality firms that collectively received nearly $59 million in coronavirus relief funding and are tied to hotelier Monty Bennett announced that they would return the funds after Bennett earlier said he would not turn back the money.
Ashford Inc., Ashford Hospitality Trust, and Braemar Hotels & Resorts released a statement saying the return of Paycheck Protection Program loans under the $2 trillion coronavirus economic relief package stemmed from “the agency’s recently changed rules and inconsistent federal guidance that put the companies at compliance risk.”
The trio of luxury hotel real estate firms garnered scrutiny for receiving funds, one of the largest amounts delivered by the program, at a time when tens of thousands of small businesses are still locked out from receiving government assistance. Large companies like Shake Shack and Ruth’s Chris Steak House received, and later agreed to return, PPP funding
The Ashford Group of Companies still maintained they would keep the funds, part of a $660 billion program meant for small businesses to maintain payrolls through the ongoing economic crisis.
The group of companies asserted the nature of the hotel industry, where smaller ownership groups typically operate under the flag of a global brand like Marriott or Hilton, qualified them for PPP funds. Since mid-March, the companies have furloughed or laid off 90 percent of their workforce due to coronavirus hindering business. The Small Business Administration has not publicly released a list of PPP loan recipients, but Ashford claimed the hotel industry received less than 3 percent of the initial $350 billion round of PPP loans.
The promise to return the PPP funding comes after travel industry groups like the U.S. Travel Association and the American Hotel & Lodging Association called for the government to discourage unaffected businesses from applying for PPP loans. U.S. Treasury Secretary Steven Mnuchin said that the government will perform a full audit on any company taking out more than $2 million in the small business loan program.
The Ashford companies stated they would return all PPP funds by May 7.
