The hotel industry is pushing Congress to create its very own $20 billion grant program — hopefully by the end of the summer.
The Save Hotel Jobs Act, introduced by Sen. Brian Schatz, D-Hawaii, in the Senate and and Rep.Charlie Crist, D-Fla., in the U.S. House of Representatives in late April, would create a new grant program for hotels that saw a drop in revenue of 40% or more during 2020 to receive grants of up to $20 million, administered by the Small Business Administration.
“We would hope to do it by the end of summer,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association, adding while the standalone legislation offers a blueprint for the program, it most likely needs to be part of one of the larger packages being debated in Congress. “We would like to be a part of one of them because we feel this fits perfectly in any kind of recovery bill.”
The industry is coming off a year in which it saw a loss of about $110 billion in revenue. Despite more travelers expected this summer and hotel bookings beginning to recover, Rogers said the industry is not anticipating a full recovery until 2023 or 2024.
He said he is confident Congress will pass some sort of aid for hotels.
“We have heard from a lot of lawmakers that say we know how bad the industry has been hurt and it still needs some help,” Rogers said, although the $20 billion is not large compared to the industry’s losses. “This is a very small part of that but, even under the best circumstances, we are not going to recover immediately coming off of a year like that.”
The push for a hotel-industry specific grant program comes as the SBA’s Restaurant Revitalization Fund has approved its first $2 billion in grants to more than 16,000 businesses, after more than 180,000 applied in the first two days of open applications. The SBA’s Shuttered Venue Operators Grant program had a rockier start, having to shut down its portal after launching in April, only to reopen it several days later.
The legislation pending in Congress has also been endorsed by UNITE HERE, the largest hospitality workers union in North America, which Rogers credits to the grants having to be used nearly entirely for payroll and payroll-related expenses, allowing hotels to staff up and unemployed workers to return to their jobs. A small portion of each grant could be used for Covid-19 mitigation and personal protective equipment.
"We are just really trying to survive," Rogers said, adding that some events commonly held at hotels are planned years in advance, and that business largely disappeared during Covid. "Things are starting to get better. It's just a slow slow recovery," he said.
The push for hotel grants comes as other sources of funding dry out. The SBA said earlier in May it was shutting down its Paycheck Protection Program portal to new applications, unless you are a community financial institution, which can take part in a multibillion-dollar set aside. And the subsequent PPP loan forgiveness process and the inevitable appeals and legal challenges could take years to resolve.
The SBA also continues to address new aspects of its various grant programs. On April 23, it announced it was rolling out Supplemental Targeted Advances, which will go to 1 million eligible small businesses that the SBA said it will begin contacting over the coming weeks. These grants will be open to small businesses even if they have already received $10,000 through its other grant programs, but a company must be located in a low-income neighborhood as designated by this SBA mapping tool, an issue that has caused headaches for some small businesses.