U.S. Treasury Secretary Steven Mnuchin has called on Congress to put $134 billion in leftover coronavirus financial aid into the hands of the most hard-hit entrepreneurs, such as hotel and restaurant owners.
During his June 30 testimony before the House Financial Services Committee, Mnuchin offered his support to get the remaining federal Paycheck Protection Program funds to the businesses hardest by the COVID-19 pandemic.
“There appears to be bipartisan support in the Senate to re-purpose the $134 billion for PPP, extending it to businesses that are most hard hit … (whose) revenues have dropped significantly, things like restaurants, hotels and others,” Mnuchin said during his testimony, Yahoo News reported.
Girish Patel, a supporter of the advocacy group Hotels Together and co-founder of Arizona-based NewGen Worldwide LLC, agrees that much of that unclaimed money should go to hotels struggling to stay solvent during the pandemic.
“Hospitality has been the hardest-hit industry,” Patel told Washington, D.C., Business Daily in an email. “Of the nearly 90,000 businesses that participated in the PPP loan program, only 8% of the funding went to hospitality. That 8% is shared between hotels, restaurants and the food-service industry.”
Hotel occupancy for 2020 is expected to drop to 41%, he said, a level that won’t even allow operators to make their debt payments. Real recovery won’t begin until next year, provided that corporate travel resumes, according to Patel.
Flexibility in applying the loan money to obligations beyond just payroll would also be helpful, he said, since hotel operators’ revenues also go to vendors, suppliers, franchise fees and safety measures for customers and employees alike. In addition, there are more hidden costs such as property taxes, insurance and technology, according to Patel.
Other steps Congress could take to help the struggling hospitality industry include actions to keep lenders from foreclosing on hotel operators and giving hotels and other establishments immunity from lawsuits filed by people who say they contracted COVID-19 at business locations, he told Washington, D.C. Business Daily.
But most importantly, federal lawmakers need to recognize the level of financial benefits such business owners provide within their districts, according to Patel.
“Many times it feels as though we’ve been the forgotten man because we are just working to keep our lights on and our people employed,” he told Washington, D.C. Business Daily. “We don’t sit on any one side of a political aisle … our hotels service everyone and provide for everyone in our communities, and we just need them to accept we are the ones drowning under their watch at no fault of our own.”
Likewise, the American Hotel & Lodging Association has urged Congress to provide relief from commercial mortgage pressures and to boost the amount and flexibility of PPP loans. The association also favors a temporary travel tax credit and tax credits for purchases of cleaning equipment and personal safety gear to protect workers and guests.