Best Western CEO Says U.S. Hotels Need 6-Month Lifeline From D.C. to Survive, Not Just to Recover

The U.S. hotel industry is at a recovery impasse with rising coronavirus case counts across much of the country. Hotel business survival, let alone recovery, largely depends on what comes out of the next coronavirus economic relief package from Washington, according to Best Western CEO David Kong. “What I’m afraid of is there could be massive defaults on not just [commercial mortgage-backed securities] but on all loans. You would have a disaster,” Kong said Monday in an interview with Skift. “You’d have the 2008 and 2009 financial crisis all over again. I think the problem is going to get easier as we go. We just need to buy ourselves time.” Hotels in June were the biggest source of delinquent loans for commercial mortgage-backed securities, a group of commercial mortgage loans pooled as one that hotel developers frequently use to build new projects. But Kong fears the industry’s financial problems will grow beyond CMBS delinquencies if Congress doesn’t offer some level of financial assistance. Similar to the American Hotel & Lodging Association’s proposal, Kong wants an extension to the Paycheck Protection Program — a federal small business loan initiative launched in the $2 trillion CARES Act relief measure passed in late March. Roughly $130 billion remai