Skift Take

More coronavirus economic relief is likely for the U.S. travel industry, but the virus needs to get under control before stimulus measures like travel tax credits get a receptive audience in Washington.

A Biden administration in the White House, whether with a divided government or not, stands to deliver on a bigger stimulus package for the travel industry.

But travel leaders still plan on getting a deal finalized with the current occupant of 1600 Pennsylvania Ave.

Organizations like the U.S. Travel Association and the American Hotel & Lodging Association continue to rally Congress and the White House for another round of coronavirus economic relief. Talks stalled ahead of the U.S. election, but with the presidency called in favor of former Vice President Joe Biden, there is optimism regarding at least two rounds of stimulus — with one potentially passing before the January 20 inauguration day.

“The challenge we faced heading up to the election wasn’t President Trump. You had [Sec. of the Treasury Steven] Mnuchin negotiating with [Speaker of the House Nancy] Pelosi, and if they had come to a deal, they would have never gotten Senate support for it. The Senate was always the one out of play in that moment in time,” said AHLA CEO Chip Rogers Monday during New York University’s International Hospitality Industry Investment Conference. “The interesting change has been the day after the election with [Sen. Majority Leader] McConnell coming out saying we have to get something done by the end of the calendar year, and, more recently, Speaker Pelosi coming out and echoing that sentiment.”

McConnell and many Senate Republicans were vehemently against a second high-cost relief bill after passing the $2 trillion CARES Act in late March. Pelosi and Mnuchin were negotiating something in the $2 trillion range in the month leading up to the election, but those talks stalled.

While McConnell is now engaged in talks for a new bill, it is unlikely he will change his thinking on spending. The Kentucky Republican cited the ongoing jobs recovery as a sign a second massive spending bill is unnecessary.

Travel leaders at the NYU conference expect a slim bill, likely focused on reopening the Paycheck Protection Program of small business loans, to pass by the end of the year while President Donald Trump is still in office. But a new administration would likely push for a greater stimulus plan.

“Hopefully with some fresh eyes, even at the Treasury Department, we will have some sort of opportunity to continue to make our case and have folks really do something for our industry that will help us,” said National Association of Black Hotel Owners, Operators and Developers CEO Andy Ingraham.

A Biden Stimulus

The travel industry expects a mix of previously lobbied survival needs as well as newer stimulus requests under a Biden administration.

Tweaks to the Main Street Lending Program to enable hotel owners, who usually carry mortgage debt disqualifying them from the measure, are expected under a Biden plan. There are also hopes of a long-awaited infrastructure bill under a new administration, especially since Biden has the nickname “Amtrak Joe” due to his frequent use of the railway during his career in Washington.

Liability protections that would prevent coronavirus exposure claims against business owners would also likely be saved for a bigger bill, and that could be a key part of reviving corporate travel.

“The Achilles heel we have is companies all have policies saying do not travel and do not go to a meeting. Until we can turn that around, we have a problem,” said U.S. Travel Association CEO Roger Dow. “Liability protection is something that is going to be needed because, if you’re an operator, you don’t want someone suing you and saying they got Covid at your hotel. Companies are going to tell people not to travel until they’re sure they’re not going to get sued.”

The U.S. Travel Association and other groups have also rallied around a $4,000 tax credit from travel, aimed at reviving demand on the other side of the pandemic. That measure is almost certainly not likely until the virus is under control, but leaders note a tax credit would almost entirely go back into the system as major infrastructure projects like airport expansions are funded in part by travel fees.

“This is not only a way to stimulate travel but stimulate the entire economy,” Ingraham said. “Travel impacts every aspect of the economy, both domestically and internationally.”

No Time to Wait

Just as McConnell pointed to the continued positive momentum with jobs, Pfizer’s coronavirus vaccine report Monday is another shot in the arm for the travel industry. The pharmaceutical company said its vaccine in development was more than 90 percent effective, and that news sent travel stocks into a rally.

But travel leaders continue to emphasize Wall Street is not Main Street, and a relief bill is still needed by year’s end.

“We have hoteliers who can’t make it to April. We can’t wait until the vaccine is in place and spring travel and summer travel begins again,” Rogers said. “There are thousands of hoteliers who won’t make it to then unless they get some assistance.”

Hoteliers may be in financial need, but they were also in need before the election. Would anything change in the eyes of a divided Congress?

“This should be one of those times where we tell Congress coronavirus is not red, it is not blue, it is not black, it is not white. It is all Americans who are all suffering, and you guys have to figure this out,” Rogers said. “I’m hoping we finally have our day after 9/11 moment where we come together and say this is bigger than all of us. Maybe it took an administration change to do that.”

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Tags: ahla, coronavirus, coronavirus recovery, US Travel Association

Photo credit: Travel leaders expect at least a two-part stimulus plan under different presidential administrations to combat coronavirus. Mark Skrobola / Flickr

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