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Your Weekly AAHOA Wrap-Up for Friday, Dec. 4, 2020

Message from the President & CEO

AAHOA Members,

Following months of gridlocked negotiations, a bipartisan congressional group compromised on a $908 billion stimulus proposal earlier this week. The window for Congress to pass COVID-19 relief is closing, and our industry needs relief now. Contact your members of Congress and President Trump to let them know this relief is essential, both for our industry and our nation. The prospects for a second round of relief have never been higher. With just days left before Congress breaks for the holidays, we need you to join our efforts to send 15,000 letters to the decision-makers in Washington, D.C.  

We appreciate your engagement and support and will continue to keep you well-informed of political developments and more in the coming weeks. Stay well and have a great weekend.

Cecil P. Staton

AAHOA President & CEO

Top 10 Things to Know This Week

STR: U.S. Hotel Profitability Improves in October, But Still Trails Same Period in 2019

U.S. hotel profitability hit double figures for the first time since February, and year-over-year comparisons improved slightly from the previous month, according to STR‘s October monthly P&L data release. In a year-over-year comparison with October 2019, the industry reported the following:

• GOPPAR: -88.3% to US$12.69

• TRevPAR: -72.2% to US$70.96

• EBITDA PAR: -103.8% to US$-3.24

• LPAR (Labor Costs): -61.1% to US$31.28

The industry’s GOPPAR was in single digits for the previous three months, including a level of US$8.14 in September. “There were positives in the profitability data even as occupancy flattened and the extension of the summer leisure lift came to an end,” said Audrey Kallman, operations analyst at STR. “On the negative side, a lack of group business continued to stand out with Upper Upscale hotels showing the lowest GOPPAR among the classes. October is usually a strong month for conferences and events, but without those significant demand generators, GOPPAR for Upper Upscale properties came in more than $100 lower than this time last year.”

Trepp: CMBS Delinquency Rate Slips Modestly in November

The Trepp CMBS delinquency rate logged its fifth consecutive monthly decline following two large jumps in the reading in May and June of this year. After several months of big dips, the rate fell much more modestly in November. Download the complete report to see the numbers for CMBS 1.0/2.0+ and by property type. The CMBS delinquency rate in November is 8.17%, a decline of 11 basis points from October. The percentage of loans in the 30 days delinquent bucket is 0.94%, which is down six basis points for the month. As the Trepp team has noted before, the declines come with caveats. Some of the loans that have been identified as current came because of the granting of forbearances and the authorization of borrowers to use reserves to bring debt service payments up to date. 

Kalibri Labs: Ahead of the Curve – State of the U.S. Recovery

The pandemic has changed the industry. Some of the changes are temporary, some will become permanent. To that end, Kalibri Labs just released Ahead of the Curve: Top 50 U.S. Markets, which informs hoteliers on what’s happening in your specific area. To discuss the findings, Cindy Estis Green and Mark Lomanno from Kalibri Labs, Antoine Vialle from ForwardKeys, and Bram Gallagher from CBRE will host a virtual event at 11 a.m. EST Thursday, December 10 to discuss the overall impact of the COVID-19 pandemic on the hotel, airline, and travel sectors. 

Politico: Coronavirus Urgency Grips Divided Capitol

After months of stalemate, there’s finally a flurry of congressional activity as the coronavirus crisis worsens. But with lawmakers proposing dueling measures and Hill leaders divided over the best path forward, a major relief package approved in December remains elusive. A bipartisan congressional group struck a broad coronavirus compromise on Tuesday, a significant breakthrough after months of failed negotiations. And House Speaker Nancy Pelosi restarted her talks with Treasury Secretary Steven Mnuchin after they fell apart before the November election.

Today’s Hotelier: December 2020 Issue on ‘Newsstands’ Everywhere

The December 2020 issue of Today's Hotelier magazine is now available! In this issue, we sit down with triple threat Mili Shah and discuss her advocacy for the hotel industry from her unique perspective as a hotelier, lawyer, and banker. We also chat with hospitality industry expert and host of the Travel Channel’s “Hotel Impossible” Anthony Melchiorri about what it will take for the industry to survive and thrive during COVID-19. Plus, we have guidance from Deepak Chopra on how to fulfill your personal vision, and so much more! 

Mark Your Calendars for Our Upcoming Webcasts and Virtual Events!

• Webcast: Getting Back to Business: How to Navigate PPP Loan Forgiveness, 3-3:30 p.m. EDT Monday, Dec. 7, 2020

• Webcast: Getting Back to Business: I Want to Win the Ball Game: The Owner/GM as the Hotel’s Chief Financial Officer, 3-3:30 p.m. EST Tuesday, Dec. 8, 2020

• Virtual Event: North Pacific Region Virtual Event: Nevada Property Tax Discussion-Sponsored by O'Connor & Associates, 4 p.m. EST Tuesday, Dec. 8, 2020

• Virtual Event: Navigating the Road to Recovery in a Post-COVID-19 World: A Conversation with Hyatt Hotels (link to come), 3 p.m. EST Thursday, Dec. 10, 2020

• Webcast: Getting Back to Business: Now May Be the Time to Upgrade Your Management Company, 1-1:30 p.m. EDT Friday, Dec. 11, 2020

• Webcast: Getting Back to Business: I Want to Win the Ball Game: The Owner/GM as the Hotel’s Chief Information Officer, 3-3:30 p.m. EST Tuesday, Dec. 15, 2020

COVID Relief NOW Coalition Releases New Ad Calling on Congress to Act

The COVID Relief NOW Coalition, a new coalition of more than 300 major public and private sector groups, including AAHOA, yesterday released a new ad, “Economic Relief Can’t Wait,” imploring Congress to pass additional COVID economic relief during the current lame duck session. The ad is running across digital platforms including Twitter, YouTube, Google, connected TVs and other online sites. In a recent letter sent to Congress, the coalition highlighted the millions of jobs, small businesses, and vital government services that are on the line and urged immediate action. 

Save the Date: Board of Directors Service Interest Meeting Set for December 15

AAHOA's 2021-2023 Strategic Plan launches in January and the Board of Directors will play an important role in helping AAHOA achieve its stated goals. To learn more about the strategic plan and what service on a national nonprofit board requires, please join AAHOA President & CEO Cecil P. Staton for a Board Service Interest Meeting. We are looking for motivated members who are ready and willing to help AAHOA achieve its goals, thereby helping hotel owners all across the nation. Answer the call and volunteer to serve. The nomination period runs December 16 through March 8, and open positions and eligibility requirements are available here. 

2-3 p.m. EST Tuesday, Dec. 15, 2020

Zoom meeting:  +1 646 5588656

ID: 974 0439 3085

Passcode: 066333

Coalition Sends Letter to Congress Seeking to Correct Tax Treatment of PPP Loan Forgiveness

A national coalition of hundreds of organizations, including AAHOA, today sent a letter to the four Congressional leaders urging Congress to enact legislation before the end of the year that includes a technical correction addressing the tax treatment of loan forgiveness under the Paycheck Protection Program (PPP). At the onset of the COVID-19 pandemic, Congress responded with speed, cooperation, and an eye to preventing the worst potential economic outcomes. We ask that you bring that same spirit of urgency and cooperation before the end of this session to prevent an avoidable catastrophe for millions of small businesses that, without Congressional action, will face a surprising, and, in many cases, insurmountable tax bill next year.

Promising News Out of Capitol Hill: Bipartisan Group Working on Interim Stimulus Package

There is a renewed, collaborative effort by moderate members of the House and Senate to revive stimulus discussions. As you know, both the Republicans and Democrats have been entrenched with their demands and dollar figures for the past few months. We had hoped the election results would have provided certainty, but that has not happened because of the remaining races in Georgia. The groups' efforts in the House and Senate could create an interim stimulus package. The details are far from settled, but we do know they likely will include several of our most important provisions, including:

• PPP 2.0 (and could likely include a threshold of lost revenue of 35% during a look-back period chosen by the business owner year-over-year)

• Easing forgiveness barriers and eliminating tax penalties on PPP 

• Added resources for EIDL

• Temporary liability shield from exposure related suits

We also are informed that our push for additional bank forbearance is likely to be included. It could expand the CARES Act's relief measure for banks for an additional 6 months or up to a year. Unfortunately, it does not look like the additional lending facilities or liquidity proposals, including those that address CMBS issues, are yet in the discussions. The AAHOA team will be heavily involved in these conversations moving forward – continuing our advocacy efforts on behalf of hoteliers all over the nation.

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Asian American Hotel Owners Association, Inc.

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