COVID-19 relief bill offers PPP loans for Wisconsin's hotel industry

The COVID-19 relief bill is bringing some much-needed help to Wisconsin’s struggling hotel industry.

Hotel occupancy year-to-date was 37% at the end of November in Wisconsin, compared to 57.8% in November 2019. Without more federal relief, many hotels reported facing closure.

The Tru by Hilton and Home2 Suites by Hilton facility in downtown Milwaukee has been using a skeleton crew since its opening just four weeks ago. Its occupancy has ranged from 10% to 25%.

"Between the 31 hotels that are downtown, we're fighting for scraps," said Kevin Dombrow, area director of sales for Hawkeye Hotels.

Kevin Dombrow

Hawkeye Hotels opened five of its six Wisconsin hotels in 2020. The opening plans were set in motion in better times.

"In 2019, we were shattering records," said Dombrow.

Occupancy in downtown Milwaukee is down 66% compared to 2019, according to STR. Average daily rates are down $45.

"To put it in a nutshell, our industry has been devastated by the pandemic," said Bill Elliott, of the Wisconsin Hotel & Lodging Association (WH&LA).

Elliott says 53,000 hotel-supported jobs were in jeopardy without additional federal relief.

"We're very, very concerned about our industry and keeping our people employed and our businesses open," said Elliott.

Survey on industry

In a November survey conducted by WH&LA, 47% of licensed Wisconsin hotels and lodgers said they’d close within six months without more federal funding.

Bill Elliott

"We've got a long road ahead of us to dig out of the mess that the pandemic has caused," said Elliot.

So far, Paycheck Protection Program (PPP) loans and $20 million in CARES Act grants have kept the lights on at many Wisconsin hotels. The new relief bill provides a second round of PPP Loans, but Elliott hopes more can still be done.

"There are a lot of different types of tax relief that would really help us," said Elliot.

Any relief for the hotels along Lake Michigan is essentially a life-preserver until travel for leisure and corporate business resumes.

"Corporate travel probably isn't going to resume until July or August," said Elliot.

When asked about public health concerns, Dombrow says Hawkeye’s hotels are thoroughly cleaned, with rooms sealed after housekeeping visits and commons areas frequently disinfected.

"Someone is going to be touching things up every 15 minutes. Especially elevators, elevator buttons, common surfaces, tables," said Dombrow.

The new relief bill increases the size of PPP Loans to 3.5 times payroll and makes forgiven PPP Loans tax-deductible. It also temporarily allows full deductibility for food and beverages for business meal expenses.

The WH&LA calls the bill a "critical step" that’s "long overdue." The association will continue working with elected officials in hopes of long-term relief.

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Full statement from Bill Elliott of WH&LA

"This PPP legislation was a critical step toward helping Wisconsin's hospitality industry survive as the pandemic persists. We are grateful that Congress has passed this long-overdue relief, and we look forward to working with our elected officials at both the state and federal level on longer-term relief strategies that will help to ensure the future of Wisconsin's tourism industry.

We are hoping for future Congressional action around targeted tax provisions. Through the American Hotel & Lodging Association, we are encouraging Congress and the Administration to support our industry and our employees by including targeted tax provisions in future legislation that will benefit severely injured businesses and their employees, including tax credits for capital expenditures or expenses to meet the industry’s Safe Stay initiative; enhanced Employee Retention Credit (ERC) and a temporary travel tax credit."

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