Hospitality union Unite Here has called Omni Hotels & Resorts' use of millions in Paycheck Protection Program (PPP) funding into question, claiming the luxury hotel chain has failed to rehire workers in line with PPP provisions. Omni has refuted the allegations.
In a letter to the Small Business Administration and the Department of the Treasury, Unite Here executive vice president Carlos Aramayo urged "strict scrutiny" into Omni's PPP activity, citing "direct knowledge" around the use of nearly $15 million in funding received by the Omni New Haven in Connecticut, the Omni Parker House in Boston, the Omni Providence in Rhode Island, the Omni William Penn in Pittsburgh and the Omni San Francisco.
According to Aramayo, three of those five properties -- the Omni Providence, Omni San Francisco and Omni William Penn -- remain closed, with no union members having been rehired or paid. He also alleged that the Omni New Haven and Omni Parker House have yet to fully ramp up operations and that those hotels have failed to recall more than 80% of union members who work at the properties.
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In a statement, Omni Hotels & Resorts president Peter Strebel refuted Unite Here's allegations, calling them "misleading."
"All PPP funds have been used for approved expenses as outlined in the legislation, and more than $51 million, the vast majority of the loans, have been paid out as payroll and benefits to thousands of associates," Strebel said. "Any contention to the contrary is false and defamatory. Any statements that falsely accuse Omni of misusing the funds or failing to use any of the loan proceeds for payroll costs appear to be designed solely to harm Omni's business, which will only further harm our associates."
Strebel also asserted that any portions of Omni's PPP loans that are ineligible for forgiveness will be repaid with interest and that any unused funds will be returned.
Unite Here has estimated that, portfoliowide, Omni Hotels & Resorts has received 32 PPP loans totaling $76 million, which the union group called "the largest amount received by any hotel group that Unite Here could identify."
"The PPP was created by the federal government to help businesses maintain employment levels during the Covid-19 pandemic," wrote Aramayo. "The failure of these hotels to rehire their employees has financially harmed our members and created great uncertainty for them and their families. So far, we have not received commitments from Omni to use the loans to fully rehire the workers we represent."
Aramayo added that "evidence indicates that the five aforementioned Omni hotels are not eligible for full PPP loan forgiveness."
In order to qualify for full loan forgiveness, at least 60% of a PPP loan must be used for payroll.
Unite Here, which has local affiliates in dozens of cities across North America, represents roughly 300,000 workers across the hotel, gaming and food service sectors, among other industries.
This story has been updated to add comment from Omni Hotels & Resorts.