Hotels Need More Federal Relief, Industry Group Says

NEW YORK, NY — Hotels in New York City and around the United States need more emergency funding from the federal government to survive the new coronavirus crisis, a Washington D.C.-based hotel industry group said in a new report.

Hotels are currently butter suited by closing than accepting loans from the federal Small Business Administration under the Paycheck Protection Program, according to a study published this week by the American Hotel and Lodging Association. The association, which represents more than 13,000 hotels, sent a letter to congress urging lawmakers to lift certain caps the $2 trillion stimulus package known as the CARES Act places on PPP loans for hotels.

If hotels were allowed to borrow up to 850% of their operating costs — instead of the current 250% — they would be able to cover the costs required to keep payroll instead of shutting down, according to the group's report. Hotels can only afford to cover about 47% of their total operating costs with the current loan limit due to a drastic reduction in revenues caused by the coronavirus crisis.

"The policy solutions and technical corrections we offer do not overshadow the gratitude we have for the work already done to help save our industry. The additional funding and needed changes to the CARES Act are directly related to our only interests: saving jobs of our employees and supporting our small businesses," Chip Rogers, President and CEO of the American Hotel and Lodging Association, said in a statement.

New York City hotels have been hit hard by social distancing and travel restrictions implemented to curb the spread of the coronavirus within the state. Hotel and Motel Trades Council chief Peter Ward said in March that as many as 95% of the city's hotel workers could be laid off during the crisis.

Ward said that his union is working with the hotel industry to provide health coverage for workers who get laid off. Many workers will also be getting paid for unused paid time off, sick days and holidays, Ward said. Some union workers may be able to go back to work if hotels are reopened by the government to be used for alternative purposes, the union leader said in March. New York City hotels have doubled as housing for the homeless and as makeshift hospital overflow during the coronavirus outbreak.