Trump and hotel lobby singing in harmony: a hotel bailout is for the little guys, we promise!
Chip Rogers, President and CEO of the American Hotel & Lodging Association, the country’s biggest hotel lobby, recently spent what he called “one of the most interesting sixty minute time periods of my life” meeting with President Trump and several other hotel industry executives. But in recounting that meeting, Rogers attributed to Trump what sounds exactly like the AHLA’s own strategy.
In a conversation with Hunter Hotel Advisors, Rogers said that getting extra help from the federal government for the hotel industry has been difficult because the Trump administration is concerned that assistance to the hotel industry could be seen as benefitting billionaire President Trump himself via Trump Hotels.
Roger’s comments start at around 8:30 into the following clip:
Two things – and this is so important for people to remember when they get a little frustrated about what they see coming out of the White House. First and foremost, the President clearly understands our industry – he’s a hotelier, it’s not like we had to explain to him how things worked, he gets it. The problem is that he and his entire administration are very sensitive to this idea that anything they are doing is specifically helping hotels because the media is going to accuse him of helping his own business. I know that for a fact because at the beginning of this virus crisis probably the first 50 or so interviews I did, in at least half those interviews people were asking, how is this going to help Trump Hotels? And I kept telling them, look, guys, there are 56,000 hotels in the US, Trump has about 9 of those 56,000, so what we’re working on is to help everybody, including the employees of Trump Hotels, but every single employee that’s in the industry. They are very, very sensitive to anything that could be characterized as helping hotels specifically, so we have to work through that and make sure that what we’re talking about is helping small businesses or at least those small businesses that have been hurt by the pandemic.
The “tell” in the above quote is the phrase “talking about.” POTUS is “sensitive” about the optics of bailing out global hotel corporations, so we (the AHLA) have to make sure we’re “talking about” helping small businesses.
The same subterfuge is in play when AHLA claims its efforts to get the Federal Reserve to bail out hotel owners locked into troublesome CMBS loans – which would primarily benefit large real estate investment trusts and private equity firms – is motivated by concern for “small business owners” who must be given “a lifeline” so that “workers will have jobs to come back to.” (See our earlier post.) Never mind that bailing out hotel real estate investors is unlikely to bring back any idled workers.
Despite the professed concern for small business owners and “valued employees,” the AHLA’s executive board is comprised primarily of the major hotel operating companies and hospitality REITs, and its agenda and priorities reflect the interests of those large players. Case in point: Among the changes AHLA sought in the PPP program in their April letter to Congressional leaders (archived here on our website) was to add franchise fees paid to the big franchisors like Marriott, Hilton and Hyatt to the list of allowable uses for PPP funds. If the giant hotel brands – which were sitting on billions in cash at the beginning of the pandemic (see cash on hand for Marriott, Hilton, and Hyatt) – really wanted to help the downtrodden small business hotel owners, why wouldn’t they just suspend franchise fees altogether? After all, it’s not like their reservation systems and loyalty programs are filling up hotel rooms at the moment.