Editor's Note: updated on March 24th, 2020 on rumors of airport bailout numbers.
The latest stimulus package from the Republican-led Senate is estimated at $1.8 trillion. The Democratic counter-proposal from the House is set at $2.5 trillion.
While the details are being ironed out, there is no shortage of industries looking for bailouts as business has come to a sudden and abrupt halt, with many not having the necessary cash flow to survive this pandemic for more than a few weeks. Furthermore, millions of workers across the nation are wondering how they will pay their bills without any income available to them for those working in "non-essential" roles.
All in, the hospitality and travel industry is requesting nearly $550 billion from its top lobbying arms from each sector and over nearly $850 billion if you include the general request from U.S. Travel. While the economic impact to each sector is much more from the coronavirus, it's highly probable each group will see significantly less than requested. Once the federal stimulus is passed, it will also be important for operations to apply for state and local relief as well. Please continue to be diligent on your request to your representatives at every level of the government. Your business, along with that of your colleagues and staff depends on it.
We take a look at multiple sectors of the hospitality industry including restaurants and bars, hotels, airlines, cruises, travel agents, and the travel industry itself, comparing top hospitably industries and their relief package request.
Hotels
Total Number Impacted: 1 in 25 American jobs or 8.3 million jobs
Lobbying Body: American Hotel Lodging Association (AHLA)
GDP Contribution: $660 Billion
Total Funds Requested: $100 billion for the hospitality workforce and $50 billion in flexibility in lending
Other Request or Special Notes: Access to capital for hotel payroll and mortgages. The loans requested are zero-interest and unsecured as hotel owners may not qualify for small business loans and the time-consuming process.
Cruises
Total Number Impacted: 421,000 U.S. jobs
Lobbying Body: Cruise Line Industry Association (CLIA)
Total Funds Requested: The CLIA has said they are not looking for a direct bailout but rather to get ships back out to sea and to support its travel partners. Carnival CEO Arnold W. Donald told Axios they are not looking for a financial bailout but are looking for loan guarantees as capital becomes harder to find.
Other Request or Special Notes: Unclear at this time. The public backlash against ships will be the cruise lines' biggest PR obstacle, and the much-reported-on tax rate that cruise lines pay due to their international status will make it hard for politicians to support.
Airlines
Total Number Impacted: 750,000 U.S. jobs
Lobbying Body: Airlines for America (A4A)
Total Funds Requested: $58 billion. Grants of $25 billion for passenger carriers and $4 billion for cargo. Loans for the same amount that are zero interest and unsecured. Tax relief in the form of a rebate of the 2020 excise tax paid to the Airport & Airway Trust Fund (AATF) for the first quarter of the year, and a federal tax repeal all the way to December 2021 and possibly longer depending on economic triggers.
Other Request or Special Notes: They are looking for grants, loans, and tax relief that as outlined here. Airlines have reportedly spent much of their earnings in the past on stock buybacks, a big point of criticism for bailouts without strings attached to the airline industry.
Update: NASDAQ is reporting the airlines will receive a $32 billion bailout.
Restaurants
Total Number Impacted: 16 million U.S. jobs
Lobbying Body: National Restaurant Association (NRA)
Total Funds Requested: $325 billion with $125 billion for a recovery fund, $35 billion for a community development block grant, $100 billion for business interruption insurance, $45 billion in federal and conventional loans, along with $130 million in disaster unemployment assistance.
Other Request or Special Notes: Assistance with loan, lease, and mortgage deferments, tax breaks, tax credits for employee retention, and a temporary payroll tax cut.
Travel Agents
Total Number Impacted: 148,000
Lobbying Body: American Society of Travel Advisors (ASTA)
Total Funds Requested: $13.7 billion. $7.7 billion to compensate ticket agents and $6 billion in zero-interest, unsecured loans.
Other Request or Special Notes: Self-employed individuals and ICs would also be covered under unemployment benefits for those who cannot work due to coronavirus.
Travel (General)
Total Number Impacted: 9 million U.S. jobs
Lobbying Body: U.S. Travel Association
GDP Contribution: Nearly $1 trillion
Total Funds Requested: $300 billion. $150 billion for grants to travel-dependent businesses to maintain employment. Financial assistance with $150 billion in unsecured loans and loan guarantees. An additional $10 billion in airport grants.
Other Measures Put in Place:
- Establish a Travel Workforce Stabilization Fund.
- Provide an Emergency Liquidity Facility for travel businesses.
- Optimize and modify SBA loan programs to support small businesses and their employees.
Bar and Restaurant will continue to monitor the stimulus package making its way through Congress and report back how it impacts our industry. Please continue to write your legislation and you can find a sample letter here that Bobby Heugel created for dining operations.
Editor's Note: This article was updated to correct ASTA name to "American Society of Travel Advisors"