The American Hotel & Lodging Association (AHLA) conducted a survey of its members between April 28-30, 2020, on a variety of topics, including the Paycheck Protection Program (PPP) and debt issues. Of the more than 900 respondents, more than 95 percent reported applying for a PPP and/or an Economic Injury Disaster Loan (EIDL), and 79 percent reported that they were approved for one or both. However, more than 50 percent of respondents said that the loan amount is not enough to rehire their staff. The top reasons for this concern include: the loan covers eight weeks of payroll and recovery is expected to take longer; many hotels are still closed by government order; and hotels have to spend PPP funds in a short window of time for the loans to be forgivable.
The median loan amount that respondents applied for was $150,000 (the maximum PPP loan amount is 2.5-times monthly payroll). Nearly half (48.4 percent) applied for both loans, 45.1 percent applied for only a PPP loan, 4.1 percent applied for EIDL only, and just 2.5 percent did not apply for either loan. Most respondents to the AHLA member survey were approved for a PPP loan (66.4 percent), 3.5 percent were approved for EIDL, 8.9 percent were approved for both, and 21.3 percent were not approved for either loan.
In addition, the AHLA member survey also found that 83 percent of hotel debt borrowers have requested debt forbearance or a payment deferral agreement, but less than 15 percent of commercial mortgage-backed securities (CMBS) borrowers have received forbearance compared to 80 percent of bank borrowers. More than 80 percent of bank-approved forbearance or payment deferral requests were for 90 days or fewer.
AHLA has requested updates to the Paycheck Protection Program and for debt relief from lenders, especially within the CMBS market.