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The president and CEO of Dallas-based Ashford Hospitality Trust is stepping down after the company received pushback over the $30 million it received from the Paycheck Protection Program, part of the $2 trillion coronavirus relief fund passed in March.
Tens of thousands of small businesses are still waiting to receive funds. Companies like Shake Shack and Ruth’s Chris Steak House received, and later promised to return, PPP loans.
But despite the departure of CEO Douglas Kessler and the controversy, Ashford Hospitality leaders maintain the company and two related companies qualified for the program and will keep the money. The particulars of Kessler’s resignation are still not clear.
Kessler will remain with the company until May 14, when Ashford Chief Strategy Officer J. Robison Hays takes over as president and CEO.
“I would like to thank Douglas for his invaluable leadership and contributions to Ashford Trust during his considerable tenure,” Ashford Hospitality Trust Chairman of the Board Monty Bennett said in a statement. “He has been an extraordinary colleague and instrumental in the growth of Ashford Trust since its IPO in 2003. We wish him well in his future endeavors.”
The executive shift still addresses only one of three companies tied to Bennett that are under pressure over their benefit from a program aimed at assisting small businesses during coronavirus.
Ashford Hospitality Trust, Braemar Hotels & Resorts – where Bennett is chairman of the board of directors — and Ashford Inc. — where Bennett is CEO and chairman of the board – collectively received nearly $59 million in PPP loans, according to filings with the U.S. Securities and Exchange Commission. The companies issued a joint statement saying they would not return the money to the Small Business Administration.
Since the middle of March, the companies have furloughed or laid off 90 percent of their workforce due to coronavirus hindering business. The Small Business Administration has not publicly released a list of PPP loan recipients, but Ashford claims the hotel industry received less than 3 percent of the initial $350 billion round of PPP loans.
“Our companies have not crowded out smaller businesses from receiving funds, as some media reports have suggested,” the statement continued. “The PPP program was specifically intended for companies like ours.”
After the initial round of PPP funding ran out, the U.S. government injected an additional $310 billion earlier this month. Industry advocates and politicians are calling for more oversight to make sure the latest round of money gets to small businesses.
Travel industry groups like the U.S. Travel Association and the American Hotel & Lodging Association Thursday called for the government to discourage unaffected businesses from applying for PPP loans. U.S. Treasury Secretary Steven Mnuchin said earlier this week the government will perform a full audit on any company taking out more than $2 million in the small business loan program.