by Cecil Staton
ATLANTA – America’s hotel owners and their employees faced the greatest challenge of their careers over the past year. They felt the impact of this pandemic at its onset as stay-home orders, quarantines, and uncertainty about the virus led people to stop traveling almost overnight. While there were numerous unknowns in the first weeks of the pandemic, it became readily apparent that life as we knew it would fundamentally change until public health officials figured out how to contain the spread of the virus.
Last spring, hotel occupancy rates, ADR, and RevPAR figures did not offer up much optimism and spelled out the severity of the pandemic’s impact on the hospitality industry. This was not the first time the hospitality industry faced dire straits, for 9/11 and the 2008 financial crisis hit hoteliers hard; however, it became readily apparent that this crisis would be greater for the industry than those two events combined.
For many hotel owners, it became a struggle to pay employees, meet operating costs, and pay the mortgage. AAHOA Members shared gut-wrenching stories about having to furlough or lay off employees who had been with their companies for years. While owners worked with their lenders on forbearance, they called their lawmakers and urged them to pass legislation such as the CARES Act to help save small businesses.
The creation of the Paycheck Protection Program (PPP) offered hoteliers a lifeline that helped many keep employees on staff and keep their doors open. The recent passage of the American Rescue Plan contained an additional round of PPP and extended Troubled Debt Restructuring eased the liquidity crisis facing small businesses and will help many remain afloat.
For our industry to recover, we need people to start traveling again. The billions of dollars included in the American Rescue Plan for increased testing, and a rapid expansion of vaccine distribution, will go a long way toward boosting consumer confidence about safely resuming pre-pandemic activities, like leisure and business travel. The additional funding for PPP, Economic Injury Disaster Loan (EIDL) grants through SBA, and grants for destination marketing organizations, are critical measures that help the hospitality industry right now as we work toward recovery.
As we enter spring, rather appropriately, we are getting a glimpse of the opportunities that may come and the growth and new life that lie ahead. With three vaccines and aggressive inoculation targets being met, we may soon approach some semblance of pre-pandemic normalcy.
The past year showed the resiliency of hoteliers and hospitality workers, but we still have a long way to go until our industry recovers. STR and CBRE estimates point to a recovery timetable that runs through at least the end of 2023, but owners are optimistic that the developments of the past few months and availability of vaccines will help get more heads in beds.
Cecil Staton is president and CEO of the Atlanta-based Asian American Hotel Owners Association.