U.S. hotel, travel industry ask for bailout as job cuts begin

By Katie Paul and Nandita Bose SAN FRANCISCO/WASHINGTON (Reuters) - American hotel and travel industry executives from companies such as Marriott and Hilton met with U.S. President Donald Trump on Tuesday to discuss a potential $250 billion aid package, as thousands of hotel workers began furloughs due to the fast-spreading coronavirus. The requested package would consist of $150 billion (124 billion pounds) in direct aid for the hotel sector and $100 billion for related travel companies, including convention businesses, industry executives said on a call after the meeting with Trump, who made his fortune in real estate and hotels.

Reuters March 18, 2020 06:05:16 IST
U.S. hotel, travel industry ask for bailout as job cuts begin

US hotel travel industry ask for bailout as job cuts begin

By Katie Paul and Nandita Bose

SAN FRANCISCO/WASHINGTON (Reuters) - American hotel and travel industry executives from companies such as Marriott and Hilton met with U.S. President Donald Trump on Tuesday to discuss a potential $250 billion aid package, as thousands of hotel workers began furloughs due to the fast-spreading coronavirus.

The requested package would consist of $150 billion (124 billion pounds) in direct aid for the hotel sector and $100 billion for related travel companies, including convention businesses, industry executives said on a call after the meeting with Trump, who made his fortune in real estate and hotels.

Separately, the airline industry has asked for $58 billion in assistance for both passenger and cargo carriers, plus $10 billion for airports.

The hotel industry said it was expecting to lose $1.4 billion in revenue every week on account of the virus, according to statements from the American Hotel and Lodging Association and the U.S. Travel Association, which also forecasts a 30% drop in hotel occupancy over a year.

The sudden cratering of demand would cause the loss of 4.6 million jobs, the statements added.

Chip Rogers, chief executive of the American Hotels and Lodging Association, said the economic impact of the pandemic on the hotel industry was already bigger than "September 11th and the 2008 recession combined."

"Thirty-three thousand small business hotels across the country are facing the difficult decision right now whether to close their doors and lay off millions of people over the next few days," he said on the call with reporters after the Trump meeting.

The groups said they asked the White House to take "immediate action" including a stabilization fund to keep people employed and access to liquidity for hotel businesses in the form of low interest loans.

They also asked for modifications to loan programs to help keep small hotel owners afloat and direct grants.

Roger Dow, chief executive of the U.S. Travel Association, said "it will take at least $100 billion to cover wages for two quarters, and then you take the rest of the industry, we're talking $150 billion."

Marriott, the largest hotel company, confirmed Tuesday it was beginning to furlough what it anticipates will be tens of thousands of employees.

A company spokesman said it had begun shutting down some of its managed properties last week, and was also cutting staffing at hotels that are still open. Workers are not being paid but will get healthcare benefits, the company added.

At a press availability during the meeting, which also included Vice President Mike Pence, Hilton's chief executive said occupancy was down to 15% and hotels in some cities were shutting down.

A spokesman said Hilton had temporarily suspended new reservations at two hotels in New York and Washington, D.C., although it was allowing current guests to continue their stays.

Hyatt's chief executive, also speaking during the meeting, said occupancy at his company's hotels was in the single digits.

Before their session at the White House industry executives also spoke with multiple members of Congress, including Senators Susan Collins and Cory Gardner.

Treasury Secretary Steven Mnuchin told reporters he hoped Congress would provide aid to the hotel industry including potential loan guarantees.

Airlines have also been battling to survive a plunge in demand amid travel restrictions and recommendations to self-isolate.

Sabre, whose technology is used for airline reservations, said on Tuesday it would suspend paying dividends and repurchasing shares due to the virus. Moody's also downgraded Southwest Airlines Co's debt ratings to Baa1.

Democrats in Congress are expected to assist the sector, but have said any bailout should come with conditions like protections for workers and requirements for consumer-friendly and environmentally sound business practices.

A spokesman for House Speaker Nancy Pelosi said she spoke with U.S. airline CEOs on Tuesday, at their request. There was agreement on the need for "big, immediate action," he said, as well as assistance that "puts workers' paychecks and benefits first."

(Reporting by Daphne Psaledakis, Chris Sanders, Nandita Bose and David Shepardson in Washington, and Katie Paul in San Francisco; Editing by Tom Brown; Editing by Chizu Nomiyama, Marguerita Choy and Tom Brown)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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