Mar 17, 2020 - Economy & Business

Hotel industry seeks $150 billion coronavirus relief

The front desk inside the JW Marriott hotel. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

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.

Go deeper

A lifeline emerges for the devastated airline industry

American Airlines planes parked at Los Angeles International Airport. Photo: Alex Tai/SOPA Images/LightRocket via Getty Images

Congress' massive $2 trillion coronavirus stimulus package includes $58 billion for U.S. airlines, half in grants to cover 750,000 employees' paychecks, and the rest in loans or loan guarantees to help them keep operating during the worst travel downturn in history.

Why it matters: With some 80 million U.S. residents under mandatory stay-at-home orders and the coronavirus pandemic continuing to spread, hardly anyone is flying these days. But when the public health crisis ends, airlines want to be able to take off again quickly.

The coronavirus is causing widespread U.S. price cuts

Illustration: Aïda Amer/Axios

Having already hit supply chains and led to the widespread cancellation of large gatherings and events, the COVID-19 outbreak is now causing a repricing on tourism and travel globally, as airlines, hotels and travel operators see major declines in bookings and revenue.

Why it matters: China's record low readings in February for both manufacturing and services could serve as a warning of what's to come for parts of Asia, Europe, and even the U.S.

White House, Congress reach deal on $2 trillion coronavirus relief package

Senate Majority Leader Mitch McConnell leaves a meeting in the Strom Thurmond Room during negotiations in Washington, D.C. Photo: Chip Somodevilla/Getty Images

After days of intense negotiations, the White House and Republican and Democratic Senate leaders struck a bipartisan deal early Wednesday over a $2 trillion stimulus package designed to ease the economic impact of the coronavirus outbreak.

Why it matters: The emergency legislation that Senate Majority Leader Mitch McConnell (R-Ky.) promised to pass later Wednesday will deliver vital aid to workers, small businesses, corporations and health care providers under strain from the illness, which has infected more than 55,000 people in the U.S. and killed more than 800.

Go deeperArrowUpdated Mar 25, 2020 - Politics & Policy