The Asian American Hotel Owners Association (AAHOA)–the largest hotel association in the world—in a call to arms to its nearly 20,000 members, who own almost one in every two hotels in the U.S. with more than $30 billion in property assets and hundreds of thousands of employees, has called on its members to prevail on the U.S. Congress to address their challenges in the wake of the Covid-19 pandemic that has devastated their industry.
In a form letter that urged every member to sign on to and send off to their respective Member of Congress and Senators, AAHOA said that “the Coronavirus pandemic is inflicting significant financial strains upon hoteliers across the country” and that “now more than ever, Congress must protect those affected most by the coronavirus.”
It said that “AAHOA is working around the clock to ensure that our lawmakers in Washington, D.C. and state capitals hear America’s hotel owners’ concerns loud and clear.”
The suggested form letter said, “I am a small business owner and a constituent who lives in your district. I am also a member of AAHOA, which represents nearly 20,000 members nationwide, who own nearly 50 percent of all hotels in the United States, and employ nearly 600,000 workers accounting for over $10 billion in annual payroll.”
“As small business owners, our members consistently contribute to the economy through tourism, real estate development, job creation and community investment,” it said, and continued, “The hotel industry is in severe distress and we need your help now!”
The letter said, “As the coronavirus has spread, it has rightfully led to event cancellations and travel restrictions out of concerns for health and safety. As a result, we have seen a dramatic drop-off in guests in every hotel across the country.”
The letter noted, “While we prepare for downturns and unexpected circumstances each year, no business can ever be prepared for a national economic catastrophe like this. The hardest-hit people during this time are our employees and America’s small businesses.”
“Because we have no guests to serve, rooms to clean, shuttles to drive, or meals to prepare, our staff do not have work and I do not have the capital necessary to pay them. Employees’ hours are limited and jobs have unfortunately already been lost. We literally cannot pay our employees and we cannot meet our mortgages. I am terrified that within weeks, I will be forced to close my hotel.”
Thus, it urged their “support of the ideas below in the next stimulus package to help the hotel industry survive this crisis.”
AAHOA’s asks of Congress to allocate $100 billion for the creation of a Hospitality Workforce Relief Fund – create grants to businesses so hoteliers can retain and rehire employees.
It said, “The outlook for the spring and summer travel season is bleak as cancellations pile up. The fund would help employers make payroll, slow rising unemployment, and help keep employees on employer-provided health insurance, lessening the impact on the Unemployment Insurance program.”
It also asks Congress to allocate $50 billion for flexibility in lending and in this regard, “Facilitate forbearance of principal and interest payments on debt during this health crisis, and make federal funds available to owners to cover debt.”
It said, “Small business hotel owners that are facing severe economic circumstances who are able to have debt canceled should not be required to pay taxes on this Cancellation of Debt (COD) income.”
The letter also called for “Access to small business loans” and this included providing hotel owners with zero interest, unsecured loans and loan guarantees from SBA, capping loan sizes at $10 million and allowing forbearance for the first 12 months.”
The letter also requested Congress to ensure hotel owners have immediate access to capital to make their payroll and mortgage payments. “Congress should establish a voluntary liquidity facility program to provide zero-interest loans or loan guarantees to hotel owners. We need the lending process to work much faster in order to provide meaningful help to our businesses,” it said.
Another ask was for Congress to support regulatory flexibility for lenders, which meant the lawmakers support to Eliminate Troubled Debt Restructuring (TDR) status for businesses affected by the COVID-19 crisis that pursue workout arrangement with affected business borrowers or to create a separate designation for COVID-19 related loans.”
It pointed out that “a TDR designation remains throughout the life of the loan. A declaration at this point will discourage lenders from finding adequately flexible workout arrangements with lodging industry borrowers.”
The form letter also called for the elimination of administrative burdens for SBA disaster loans, and complained that The Economic Injury Disaster Loans (EIDL) program is not working.
It said, “The EIDL process requires state governors to request assistance before business owners can apply. Hoteliers need capital now. Although the funds exist, it will take at minimum 4-6 weeks before any hotel owner sees any relief to help make payroll — by then, layoffs will occur and doors may close.”
Meanwhile, in lauding the signing of the Families First Coronavirus Response Act into law by President Donald Trump on Mar. 19, AAHOA said, “The bill will provide many American workers affected by COVID-19 with paid sick leave, boost food assistance, unemployment insurance, and federal Medicaid funding, and provide free testing for coronavirus for those who need it.”
It predicted that “the passage of this bill will provide much-needed relief to working Americans affected by this pandemic. It also includes important tax credits for small businesses to help offset some of the costs. This bill is a good step towards where we need to be as a country and as an industry.”
A proposed Travel Workforce Stabilization Fund emerged from a meeting March 18 between President Trump and hospitality and travel industry CEOs. The proposal calls for $250 billion to be split between a travel and employment grants account and a travel business stabilization account. These would provide hoteliers and other travel-dependent businesses with emergency liquidity in the face of a sharp decline in occupancy rates and overall travel.
AAHOA said that “the Travel Workforce Stabilization Fund is exactly the type of aggressive and direct action needed to stave off the complete economic collapse of not just the hospitality industry, but the broader travel industry and the elimination of millions of jobs. It could help tens of thousands of small businesses keep the lights on and keep their employees on staff.”
The CARES Act Is Signed into Law
Today, President Donald Trump signed the bipartisan CARES Act into law. The CARES Act provides small businesses with immediate liquidity, which will address the need for capital used to make payroll and cover operating expenses. AAHOA applauds Congressional leadership for expediting this critical relief package. The passage of the CARES Act provides AAHOA an opportunity for further conversations with the Trump administration and Congressional leadership regarding the necessary assistance small businesses need to weather this national pandemic.
What this means for you: We are expecting additional relief packages in the coming weeks as our government responds to the economic crisis sparked by COVID-19, and AAHOA is dedicated to advocating on behalf of America’s hoteliers throughout the duration of this legislative process.
New Resource: The Small Business Owner’s Guide to the CARES Act
The programs and initiatives in the CARES Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain non- profits and other employers. This guide provides information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA. Download the Resource
More than 3,000 Hoteliers Educated with AAHOA’s COVID-19 Webcast Series
AAHOA created a series of COVID-19 webcasts that will keep you informed and help determine next steps for your business. With more than 3,000 hoteliers educated to date, AAHOA is proud to make these webcasts available to the entire industry, so please share them with your employees, business partners, and others in your network. Here’s what some attendees have said:
“This was very helpful. In these difficult times, I cannot express how grateful our company is to the team at AAHOA and the experts they bring in.”
“This was one of the best presentations I have seen. The information was great and presented very well. I am very glad I took the time to be here.”
“Way to be on top of this crisis. AAHOA provides top speakers. Thanks for all you do.”
What this means for you: AAHOA is averaging more than one webcast a day to help hotel owners amid this crisis. And our work isn’t done! Stay tuned for the latest webcasts to be released in the coming days. What’s different about AAHOA’s resources is that they’re created specifically for hotel owners.