Hotel industry seeks $150 billion coronavirus relief
The hotel industry is asking the federal government for $150 billion in emergency aid, mostly to keep employees on the payroll until the novel coronavirus threat subsides and travelers are ready to hit the road again.
Why it matters: The virus outbreak has already hurt the hotel industry more than the Sept. 11 terrorist attacks and the Great Recession combined, an industry trade group says. Without immediate help, people at the lower rungs of the economic ladder will suffer the most.
The big picture: Besides $150 billion in aid for hotels — many of which are operated by franchisees or small business owners — the industry is seeking another $100 billion for travel-related businesses like retail shops, attractions and restaurants.
- Passenger and cargo airlines are seeking an additional $58 billion in relief.
What's new: Hotel and travel industry executives met with President Trump and members of his cabinet on Tuesday afternoon to plea for immediate help.
- "The president understands the severity of the problem," said Chip Rogers, president of the American Hotel and Lodging Association.
- "Three weeks ago, our members were enjoying record high occupancy rates and record high employment. The reality now is that half the hotels in the U.S. will close this year."
- With occupancy rates below 10%, hotels have already laid off 45% of their staff, with more layoffs expected by the end of the week.
- Marriott Hotels began furloughing what it expects will be tens of thousands of employees worldwide because of widespread travel cancellations across the globe, the Wall Street Journal reports.
- Many smaller hotel chains in hard-hit cities like Seattle have already closed their doors.
What they're saying: Travel industry losses alone will be enough to push the U.S. economy into recession, predicts AHLA.
- A projected $355 billion decline in travel spending — transportation, lodging, retail, attractions and restaurants — will deliver an $809 million hit to the U.S. economy and cost 4.6 million travel-related jobs, says the U.S. Travel Association.
What they're seeking: The $150 billion aid package could include:
- A fund for workforce stabilization that would pay employees more than they'd earn in unemployment benefits, if not their full paychecks.
- Emergency grants to preserve hotel companies' liquidity.
- Streamlined Small Business Administration loan programs to support independent hoteliers and franchisees.
What to watch: The government could put restrictions on any financial assistance to make sure the money winds up in employees' pockets rather than in CEO bonuses or stock buybacks to benefit shareholders.