The hotel industry is coming to White House hat in hand as the coronavirus pandemic has chilled global travel.
The American hospitality industry asked the Trump administration for a $150 billion bailout on Tuesday, warning that without the additional cash half of the hotels throughout the country may be forced to close this year, the Wall Street Journal reported.
“The coronavirus has already had a more severe economic impact on the hotel industry than Sept. 11 and the 2008 recession combined,” said Chip Rogers, CEO of the American Hotel and Lodging Association, to the Journal.
Most of the proposed bailout to the tune of $100 billion would go toward retaining workers, while $50 billion is earmarked for debt service. In recent months, a spate of high-profile hotel loans in New York City have gone into default.
The request comes on the heels of another ask, also for a total of $150 billion, from travel related businesses, such as car rental companies and travel agencies, and the airline industry.
While lobbyists continue to try and hammer out a deal, President Donald Trump reportedly pledged his support for the hotel industry.
Severin Borenstein, an economics professor at the University of California, Berkeley Haas School of Business, cast doubt on whether or not a bailout agreement was the best way to help hotel workers.
“I think that if [the government] think that hotels are not going to lay off their workers because they get a cash infusion, I think they’re going to be very disappointed,” he told the Journal. “The money is mostly going to go to bailout shareholders.”
The same day, Marriott International began putting its employees on furlough while the company shut down some of its properties, the Journal reported. The employees, which do not include members of Marriott’s corporate team, will not receive payment, but will continue receiving healthcare benefits. [WSJ] — Erin Hudson