AHLA Urges Congress to Adjust CARES Act to Improve Aid for Hotel Industry

The American Hotel & Lodging Association (AHLA) applauded the U.S. Senate's passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act this week, calling it "an important first step to getting our country's economy up and running."

However, AHLA president and CEO Chip Rogers went on to call the "current plan unworkable for hoteliers."

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The trade group points out that the legislation as it's currently written limits Small Business Administration (SBA) loans to 250 percent of average monthly payroll and claims that isn't enough to allow a business owner to meet both their payroll and debt service obligations beyond an estimated four to eight weeks.

"Consequently, it will result in furloughing the very workers the bill seeks to protect. Since the measure reduces debt forgiveness with any reduction in payroll, hoteliers would be forced to use the entire loan amount on payroll, at the expense of debt service," Rogers said in a statement on Thursday.

"The outlook for the foreseeable future is zero revenue for most hotels. If a hotelier cannot make debt payments the business will go under and the jobs are lost," he added. "We urge the House to swiftly take up this legislation while making these important changes."

Like many travel sectors, the hotel industry has been hit hard by the COVID-19 outbreak, with many companies already having been forced to lay off or furlough workers to cut costs amid dwindling occupancy rates. Last week, prior to the Senate's passage of the CARES Act, AHLA estimated that four million total hotel industry jobs have been lost or are on the verge of being eliminated in the coming weeks.

To its credit, the industry has stepped up in response to the pandemic by opening hotels up to provide temporary housing for first responders and healthcare workers.