According to American Hotel & Lodging Association (AHLA) CEO Chip Rogers, Congress' $900 billion Covid-19 relief bill should help buoy the U.S. hospitality industry through spring, with enhancements made to the Paycheck Protection Program (PPP) and several key tax provisions expected to have "significant positive impact" for hoteliers.
"Most in our industry believe that if they can just make it to May of next year, that's when leisure travel will probably pick up at a significant pace," Rogers said. "[This bill] will definitely help. If they can just make it to May, they should be okay."
In November, the AHLA released a survey indicating that 71% of 1,200 member hotels expected to last just six more months without further government relief efforts, while 34% reported they were likely to remain in business only one to three more months without aid.
The new bill's second round of PPP loans is expected to be a lifeline for many within the hospitality industry, with the program now featuring a provision that grants hotels and restaurants access to larger loans totaling 3.5 times payroll, versus 2.5 times payroll for other types of businesses.
Another key PPP change revolves around the fact that businesses will now need to prove that they've experienced at least a 25% year-over-year reduction in gross receipts in any quarter in 2020 in order to be eligible for the forgivable loans, a measure that Rogers said will help address concerns around potentially misappropriated funding.
"This will help [ensure that] some otherwise very healthy businesses that accessed the last round of PPP won't be able to take the money this time," Rogers said. "It should go to businesses that have been the most hurt, like hotels."
Likewise, another hospitality-focused highlight is the expansion of business meal tax deductions, allowing companies to write off 100% of business-related dining expenses through 2022.
"The most obvious and direct impact of this is that it encourages people to travel for business and it helps out restaurants and restaurants that are part of hotels, as well," said Rogers. "It also sends a signal, as we go into the next phase of this, that [the government] understands that incentivizing people to make certain purchases with tax incentives actually works."
The AHLA is one of several U.S. travel trade groups that have come out in strong support of the Hospitality and Commerce Job Recovery Act of 2020, a bipartisan bill that largely aims to leverage tax incentives in order to help fuel recovery of the convention, trade show, entertainment, travel and hospitality industries.
"At some point, when people feel comfortable traveling again, there will need to be a full-scale travel incentive," Rogers said.
CLARIFICATION: This report was updated to clarify the measure by which a person or company can qualify for a PPP loan in this cycle.