The hotel industry is asking for a $15 – $29 billion bailout, with 40% earmarked for hotel investors to make mortgage payments to big lenders. This is being pitched as something that ‘goes well with infrastructure’ which the federal government is preparing to spend $3 trillion on. Of course, the hotel buildings already exist and aren’t new infrastructure.
The American Hotel and Lodging Association’s chief lobbyist complains, “You have whole segments of our industry that did not receive any financial assistance whatsoever.” It’s not fair that everyone else has been taking your money and hotels haven’t been able to do so yet.
But did you know that 60% of hotel owners got forgivable PPP loans? Did you know that Marriott actually earned a $198 million profit in the U.S. and Canada in 2020 (they lost money only in Europe, Middle East and Africa)?
And the industry has its hand out when occupancy is already back to just 15% below 2019, which was a peak.
Bailing out hotels also means bailing out foreign corporations, since purchases of U.S. hotels was one of the top areas for foreign investment prior to 2019. Thousands of hotels were asking guests for donations in addition to their room bill last year, even when these hotels were owned by large foreign corporations. These weren’t donations ‘to support employees’ these were literally donations for the hotel’s ownership group.
Nonetheless, here’s what the American Hotel and Lodging Association is asking Congress for,
The AHLA’s grant proposal would provide hotel owners with funding where 60 percent would go to keeping employees on the payroll and 40 percent would go to servicing debt like mortgage payments.
While the program would apply to the entire industry, the AHLA is drafting its plan with the hardest-hit operators of properties like convention hotels in mind.
Hotels like the Hilton at the Austin Convention Center, which is owned by the city would get the biggest bailouts.
Of course if a hotel ownership group isn’t able to service its mortgage, and lenders foreclose, the property will change hands – but is still standing and can go on to operate and employee staff.