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President Donald Trump signed the CARES (Coronavirus Aid, Relief and Economic Security) act into law on Friday. The act gives economic relief to many hotel operators, who have access to funds which are part of the $2 trillion stimulus package. In previous meetings, hotel industry lobby groups had already mentioned how Covid19 was a bigger threat to hotels than 9/11. They also pointed out that up to 50% of US hotels could shut down due to Covid19’s impact. Now, they’re going one step further that while the package is a great start, more is needed.

$2 Trillion Stimulus Package

In an interview with Skift, AHLA (American Hotel and Lodging Association) CEO Chip Rogers welcomed the stimulus package but was quick to point out why more was needed in order fix some of the issues the hotel industry is facing.

“It’s definitely a lifeline. Calling it a stimulus package, I wouldn’t agree with that. Hoteliers are in survival mode right now and, at some point, we’ll need an actual stimulus package.”

Skift reports furthers how AHLA was disappointed with the limits and caps placed in the bill.

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.

“The challenge is, if you keep all your staff on at full pay, you would have no additional resources to service debt,” Rogers said. “As you know, you have to service debt first or you have no business.”

The Pundit’s Mantra

The travel industry is clearly hurting. However, people are skeptical about government handing out money to corporations as the average person struggles to pay bills.

Critics are bound to pose tough questions as to how hotels and airlines got here in the first place so quickly. Last week, I wrote about how CEOs talk so eloquently about protecting the American worker and small businesses. However, critics will question how big businesses will treat their workers and communities when business is good again. Will they make loyalty programs more consumer friendly? Will they improve benefits and protections for their workers?

Time will tell.

What do you about the comment made by AHLA CEO Chip Rogers? Do you think airlines and hotels need more taxpayer funded money in addition to the $2 Trillion stimulus package? Let us know in the comments section.


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