U.S. Hotels Will Need More Than What’s in the $2 Trillion Relief Package: Industry Trade Group CEO

The $2 trillion U.S. economic relief package passed Friday to offset a coronavirus economic downturn is more of a lifeline than stimulus to the hotel industry, according to the CEO of one of the industry’s largest trade groups.

U.S. President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security — or CARES — Act into law.Many hotel operators qualify for some of the $500 billion in loans and loan guarantees the $2 trillion emergency spending package includes to businesses hit hard by the coronavirus economic downturn.

The CARES Act loan limit is capped at 250% of a business’s average monthly payroll, which the AHLA estimates is enough to enable hoteliers to meet payroll and debt service obligations for four to eight weeks. But the trade group wanted to see the limit at a higher 400% cap.

Companies like Marriott, Hilton, and Hyatt have furloughed tens of thousands of employees while occupancy at some properties plunge to single-digit levels. The April 1 rent and mortgage payment deadline this week will be an initial financial hurdle for the industry in the ongoing coronavirus-led economic downturn. For the most part, Rogers said he is hearing of lenders and landlords offering short-term leniency on upcoming payments.

The CARES Act offers SBA loan forgiveness to businesses that re-hire furloughed employees by June 30, but the AHLA doesn’t anticipate the hotel industry will be fully recovered by then. Instead, the organization wants the deadline pushed out.