The Paycheck Protection Program rolled out today allows small businesses to apply for loans, covering 2.5 times their average monthly payroll expenses.
Best Western Hotels and Resorts CEO David Kong says his hoteliers will need four times that amount, just to pay essential bills.
Speaking to Yahoo Finance, Kong said he has been in close talks with Florida Senator Marco Rubio, who chairs the Senate’s Committee on Small Business and Entrepreneurship, asking for additional stimulus measures, as the hotel industry looks to stay afloat amid the COVID-19 outbreak.
“This is intended to tie us over, and [lawmakers] are already thinking about the full relief package,” Kong said. “We all recognize [the Paycheck Protection Program] is not intended to replace lost revenue or lost profit ... It is not enough. [Rubio] is trying to help with a fourth package.”
Rubio said additional relief for small businesses “wouldn’t be hard to do” in an interview with MSNBC Friday.
“If the program is working well and people are being helped by it and the issue becomes there’s not enough money, we’re running out of money to fund the demand, then I think, I feel like there’s going to be tremendous support for it,” Rubio said. “I can’t imagine anyone trying to block that.”
Hotel occupancy rates have fallen to unprecedented lows amid the global pandemic. Last week alone, U.S. hotels saw occupancy rates drop 67.5%, compared to the 22.6% increase in the same period last year, according to research firm STR. Revenue per available room plummeted 80.3%. Hotels in Oahu experienced the steepest declines in occupancy, with an 86.4% decline.
Revenue across the hotel industry has dropped 90%, since the pandemic began, Kong said.
Best Western, which operates nearly 5,000 hotels worldwide, has closed 300 locations in the U.S. so far. Kong says “more and more” closures are likely to follow as cities enact stay-at-home orders, prompting travelers to cancel their plans.
Last month, Kong and other hotel executives met with President Donald Trump, and called for $150 billion in direct aid for the sector. While Congress set aside $350 billion in small business loans in its $2 trillion rescue package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it has not tied funding explicitly to the travel and hospitality sector.
In recent days, Kong said he has been working closely with Treasury officials to relay the financial needs of Best Western owners, including assistance with debt service, insurance payments, and real estate taxes.
“This is totally unprecedented,” Kong said. “It’s difficult for [the government] to write the guidelines properly, so it’s taken a little bit of time. But for as long as they’re taking, that’s time our hotel owners don’t have in making ends meet.”
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita