Hotels in Need of Rapid Federal Assistance, Says New AHLA Survey

December 1, 2020

The slow-moving transition of power in Washington, D.C., is causing far more damage than anguish and partisan bickering. 

With hopes dimming on a new stimulus package before the new year, the American Hotel & Lodging Association reports stalled negotiations are endangering properties that have survived the pandemic so far.

A new survey shows dim health predictions before a vaccine is released, combined with economic hardship, point toward closures and significant layoffs within six months. That is, unless the federal government passes new relief measures.

“Every hour Congress doesn’t act, hotels lose 400 jobs,” warns Chip Rogers, president and CEO of AHLA.

While many Americans defied Centers for Disease Control guidelines to visit families for Thanksgiving, many of those travelers stayed at relatives’ homes to celebrate the holidays. As such, airlines found some good news to report but it was business as usual in this challenging time for hotels.

Projections suggest a vaccine can’t come fast enough for the lodging industry. But even if the FDA were to approve all of the promising coronavirus solutions before 2021, it will be months before mass distribution. Talk of a “dark winter” has hoteliers in need of help now. 

Without action from Congress, half of U.S. hotels could close with massive layoffs in the next six months,” says Rogers, echoing the survey in which 71 percent of respondents warned of drastic measures. 

STR reports hotel occupancy remains at least 20 percent lower than this time last year, with the difference even starker in urban destinations. Business groups, such as meetings and trade shows, are slowly reintegrating in-person elements to what has been 2020’s virtual reality, but the number of travelers is not enough to overcome the drop in leisure travel.  

One-third of the survey’s respondents say that unless dim travel projections are proven incorrect, they have one to three months to survive. 

Of the hotels operating throughout 2020, 63 percent are not staffed to full capacity despite efforts to find temporary work for employees through special holiday programs. 

Key findings of the survey of 1,200 hoteliers include:

  • More than 2/3 of hotels (71%) report that they will only be able to last six more months at current projected revenue and occupancy levels absent any further relief, with one-third (34%) saying they can only last between one to three more months;
  • 63% of hotels have less than half of their typical, pre-crisis staff working full time
  • 82% of hotel owners say they have been unable to obtain additional debt relief, such as forbearance, from their lenders beyond the end of this year;
  • 59% of hotel owners said that they are in danger of foreclosure by their commercial real estate debt lenders due to COVID-19, a 10% increase since September;
  • 52% of respondents stated their hotel(s) will close without additional aid;
  • 98% of hoteliers would apply for and utilize a second draw Paycheck Protection Program loan.

Thus far, there is no indication the lame duck Congress is likely to pass relief. Negotiations have been stalled since the CARES act ran out in early August. And while January brings with it a new set of legislators, as well as a new president, Congress will have to put aside differences to overcome the stalemate.

Rogers added, “We need Congress to prioritize the industries and employees most affected by the crisis. A relief bill would be a critical lifeline for our industry to help us retain and rehire the people who power our industry, our communities and our economy.”

 

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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors. TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders. Lisa Messina, Chief Sales Officer, LVCVA With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role? Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”  These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.  Allegiant Stadium As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward? Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees. What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events? We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.  Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city. Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.  What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization? We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.  What are your favorite ways to recharge? My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.  Valley of Fire What advice would you give to women following leadership paths in destination marketing? I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.   This interview has been edited and condensed. This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.