Past AAHOA chairman hosts political rally

AS A NEW president prepares to take office amid continuing political turmoil, Atlanta hotelier and former AAHOA Chairman Mike Patel is taking an active role in recently turned blue Georgia’s politics, including holding a rally for a Democrat candidate. At the same time, a move by the Trump administration that some say is part of an effort to complicate the transition could put billions of dollars in stimulus money out of reach of desperate hotels suffering from the COVID-19 pandemic.

Getting out the vote

Patel, who was AAHOA chairman from 1998 to 1999, hosted a meet-the-candidate event for the Rev. Raphael Warnock, a candidate for the U.S. Senate who, along with fellow Democrat Jon Ossoff, faces a runoff vote in January. The Democrats could gain control of the Senate if they win those races.

A crowd of around 50 gathered in the parking lot at Patel Plaza in Decatur, Georgia, to hear from Warnock on Nov. 19. It was nearly two weeks since the Nov. 3 election in which President-elect Joe Biden won the state, the first Democrat to do so since 1992.

“Can you imagine in our lifetime having Georgia turn blue?” Patel said. ”But, the icing on the cake is January where we get Rev. Warnock and John Ossof into our Senate.”

Patel explained one part of his passion for supporting the Democrats is the party’s position on healthcare. He lost his wife Hasmita in August after she was infected with coronavirus. She beat that infection, but the doctors gave her Pregnezone to suppress her infection, but which also suppressed her immune system, leaving her vulnerable to a second infection.

“Unfortunately, I never knew last year that this year I would be standing here and I lost my wife six months ago to COVID-19,” Patel told the crowd.

He said the Democrat platform would offer better healthcare options, including protections for pre-existing conditions.

“If you have a pre-existing condition, we must have it covered,” he said, citing for example the high rate of diabetes in the Southeast Asian community. “When you go back home, please explain why we must come and vote. Because this is a man that's going to protect inclusivity.”

Warnock said he planned to make sure that everybody in Georgia has access to affordable health care. Part of the problem is what he called Washington’s “incestuous relationship between political backrooms and corporate boardrooms.”

“As I move across the state, people are hurting. Folks are very concerned,” the candidate said. “And they want to know if there's anybody in Washington looking out for that.”

Pulling back CARES Act money

On the same day of Patel’s event,  U.S. Treasury Secretary Steven Mnuchin asked in a letter to Chairman of the Federal Reserve Board of Governors Jerome Powell that $455 billion set aside for funding the Coronavirus Aid, Relief, & Economic Security Act be returned to the treasury since it has not been used.

The funds were used for the Main Street Lending Program and other programs supporting  businesses affected by the economic downturn.

“In the unlikely event that it becomes necessary in the future to reestablish any of these facilities, the Federal Reserve can request approval from the Secretary of the Treasury and, upon approval, the facilities can be funded with Core ESF funds, to the extent permitted by law, or additional funds appropriated by Congress,” Mnuchin said.

However, media reports indicated the secretary’s request may have been part of the Trump administration’s ongoing resistance to Biden’s efforts to set up his incoming administration.

“The intent of the Mnuchin move appears to be to prevent the next treasury secretary extending relief to state and local governments, and had been urged by Sen. Pat Toomey, the Republican senator from Pennsylvania who is set to chair the Senate Banking Committee, unless the Democrats win both the runoff elections in Georgia in January,” said a report from MarketWatch.com

Patel also saw Mnuchin’s decision as politically motivated.

“The true colors are showing now, especially how the Republicans are going great lengths to destroy the economy further. This is politically motivated and sour grapes,” Patel said. “Why would you want to pull the rug from small business at a time like this when especially the numbers in hospitals and ICU are maxed? So, I say to hotel owners, especially those with [commercial mortgage-backed security loans] mortgages, don’t hope for the government to bail you out. They are being set up to be sold at a discount to venture funds.”

Hotels may not survive

The disarray in Washington comes at a time when the U.S. travel and hotel industry face increasing pressure resulting from a resurgence of COVID-19 and renewed travel restrictions enacted in many states. It’s a situation many hoteliers responding to a recent survey by the American Hotel & Lodging Association say is an existential threat.

According to the survey, 71 percent of respondents said they won’t make it another six months in the current market without further federal assistance, including the Main Street Lending Program and the Paycheck Protection Program. Also, 77 percent said they will be forced to lay off more worker and 47 would be forced to close hotels. More than one third face bankruptcy or being forced to sell by the end of 2020.

“Every hour Congress doesn’t act hotels lose 400 jobs. As devastated industries like ours desperately wait for Congress to come together to pass another round of COVID-19 relief legislation, hotels continue to face record devastation,” said Chip Rogers, AHLA president and CEO. “Without action from Congress, half of U.S. hotels could close with massive layoffs in the next six months.”

Other findings of the survey of 1,200 owners, operators, and employees included:

• 34 percent of hotel owners say they can only last between one to three more months at current projected revenue and occupancy levels absent any further relief.
• 63 percent have less than half of their typical, pre-crisis staff working full time.
• 82 percent of owners say they have been unable to obtain additional debt relief, such as forbearance, from their lenders beyond the end of this year.
• 59 percent of owners said that they are in danger of foreclosure by their commercial real estate debt lenders due to COVID-19, a 10 percent increase since September.
• 52 percent of respondents stated their hotel(s) will close without additional aid.
• 98 percent of hoteliers would apply for and utilize a second draw PPP loan.

Negotiations on the next round of stimulus were stalled before the election. After the election, groups including AAHOA and the U.S. Travel Association congratulated Biden, but also reiterated demands that talks resume on the stimulus.