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Hotel Industry Seeks Further Congress Aid As Revenues Expected To Slump

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Hotel Industry Seeks Further Congress Aid As Revenues Expected To Slump

American Hotel & Lodging Association, in a letter, requested U.S. lawmakers to raise the borrowing threshold for hotels in the Paycheck Protection Program. Hyatt Hotels Corp. (NYSE: H), Marriott International Inc. (NASDAQ: MAR) and InterContinental Hotels Group PLC (NYSE: IHG) are a few members of the AHLA.

“The maximum loan under the PPP, defined as 250% of average monthly costs for payroll, utility bills, and mortgage or rent payments for the prior calendar year, is insufficient for the hotel industry,” said the trade group.

As the COVID-19 outburst dents the hotel industry, it appeals for the limit to be raised to 800% of the average monthly costs.

Oxford Economics data show that almost 4 million hotel employees were granted a leave of absence, and the hotel industry is estimated to lose 50% of its revenue for 2020 exceeding $112 billion.

The AHLA letter states that although retaining and rehiring employees is of utmost importance to the hotel industry, sustaining the physical asset by paying off the mortgage, utilities, rent, and other time-sensitive loan obligations also stands on priority.

The trade group requests that payrolls should account for only 50% of the relief amount from the earlier decided 75%. The remaining should be utilized for supporting other factors that lead to the long-term feasibility of the hotel as a place of employment.

Separately, The National Restaurant Association is requesting $240 billion in federal aid assigned only for restaurants, Market Watch reported. A few big restaurant companies that have received the PPP aid are Ruth’s Hospitality Group Inc. (NASDAQ: RUTH), Potbelly Corp. (NASDAQ: PBPB) and Fiesta Restaurant Group Inc. (NASDAQ: FRGI) subsidiary Texas Taco Cabana.

 

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