Arkansas Hotel Industry Seeks Federal Help As Travel Sags

Arkansas Hotel Industry Seeks Federal Help As Travel Sags
Montine McNulty

The hotel industry in Arkansas and nationwide is lobbying Congress for relief, as it reports less leisure travel and “nonexistent” business and convention travel amid the ongoing COVID-19 pandemic, Montine McNulty told Arkansas Business. 

“We're trying to get funding anywhere we can,” McNulty, CEO of the Arkansas Hospitality Association, said on Tuesday. “The industry is in real need. … The hotels have a huge financial hurdle to get over. It will not be solved with a small grant program. They're going to need some major help.” 

McNulty’s comments came a day after the American Hotel & Lodging Association issued a report showing tough times for the industry across the country. Among its findings, the report said Labor Day weekend hotel bookings are down 65% year-over-year; 65% of hotels remain at or below 50% occupancy; and consumer travel is at all-time low, with only 33% of Americans reporting they have traveled overnight for leisure or vacation since March.

McNulty said many hotels rely on business and convention travelers to pick up the slack when leisure travel declines when school starts. But the pandemic has pushed hopes for those travelers into 2021, she said. The situation is especially dire because hotels are “highly leveraged,” meaning they can’t stave off closure or pay their mortgages if they don’t have enough guests.

And because hotels pay property taxes and spend money with vendors who provide food, laundry and other services, McNulty warned of a ripple effect if hotels go belly up. 

Hoteliers want Congress to approve a targeted extension of the Paycheck Protection Program, establish a commercial mortgage-backed securities market relief fund, and make structural changes to the Main Street Lending Facility to ensure they can access the program.

McNulty thinks any combination of these things could happen, but a PPP extension  which she hopes will help fund hotel operations  is the most likely. But she said the U.S. House and Senate appear to be “miles apart” on new coronavirus relief legislation. 

Both are aware of the industry’s plight, she said. The association has been working with Arkansas’ congressional delegation to lobby for federal relief. 

“I think that our delegation is well aware of the industry's needs. And they seem to be very supportive, and they understand the economic impact that we have on the state,” McNulty said. 

Tourism is Arkansas’ No. 2 industry and employs more than 100,000 people.

McNulty said she expects the state’s congressmen to leverage their positions on committees to influence the next relief package. That includes Republican French Hill, who is a member of the U.S. House Committee on Financial Services.