Skift Take

The $900 billion coronavirus relief deal delivers the airline and hotel industries some of the top requests on their respective holiday wish list. Just as before, airlines get the biggest prize.

Leaders of both houses of Congress Sunday night signaled they averted further gridlock and struck a deal in providing $900 billion in additional coronavirus economic relief.

While the airline industry is the travel sector’s largest beneficiary from the potential deal, hotels are also on track to get their biggest aid request.

Exact details of the bill were still trickling in Sunday night, but House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell confirmed the deal on social media.

Congress reached a deal for $15 billion in additional payroll relief to the airline industry. While $10 billion less than requested, the package is as close to a so-called “clean extension” of the initial funds included in the relief measure from earlier this year as could be expected after more than two-months of wrangling in Washington.

Carriers who take the funds must reinstate all of the staff they furloughed after Oct. 1. Airline staffing fell by nearly 37,000 people in October compared to the month before, though not all of those employees were laid off or involuntarily furloughed. Recalled staff will receive back pay from Dec. 1.

In addition, air service requirements that kept flights going at every airport across the U.S. will return. Small cities like New Haven, Ct., and Worcester, Mass., that have seen flights end since CARES Act rules expired on September 30 should see service resume until at least March 31 when the new package expires.

The airline relief also extends the caps on executive compensation and share buybacks that were in the first CARES Act deal.

The hotel industry was never expected to get industry-targeted aid in this relief package, but roughly $280 billion was flagged to reopen the Paycheck Protection Program of small business loans — the top item hotel trade groups lobbied Congress for in recent months.

The American Hotel & Lodging Association, the hotel industry’s largest lobbying group, declined to comment until they had a chance to review the full text of the bill.

While many U.S. hotelier will be able to tap into PPP loans, another of the industry’s major asks — liability protections against coronavirus exposure claims — was not expected to make the cut in the deal struck Sunday. But that isn’t a complete loss for the hotel industry.

At least 40 U.S. states instated some degree of liability protection this year as a result of the pandemic. Much of that state-level protection focuses on healthcare facilities, but states like Iowa have liability protections extending to all businesses. Many hotels that housed healthcare workers or served as quarantine wards during the pandemic would be protected by state-level liability protections geared toward healthcare facilities.

Hotel analysts and executives earlier in the pandemic cautioned there was a need for federal liability protections, as small businesses were vulnerable to exposure claims in a country as litigious as the U.S. But that wave of lawsuits has yet to crash.

“Quite frankly, in the hospitality industry, you’re not seeing large numbers of lawsuits,” Joshua Bowman, a partner at Boston-based law firm Sherin and Lodgen and chair of the firm’s hospitality practice, told Skift last week. “When it comes to the medical industry, that’s where most of the state bills are focused.”

The deal Sunday night comes after months of stalled talks among the Democratic-led House, Republican-led Senate, and U.S. President Donald Trump. Senate Majority Leader Mitch McConnell, widely seen as the biggest roadblock to any such deal, softened his stance on further pandemic relief following the presidential election in November.

A vote on the bill is expected Monday.

“As the American people continue battling the coronavirus this holiday season, they will not be on their own. Congress has just reached an agreement,” McConnell tweeted Sunday evening. “We will pass another rescue package ASAP. More help is on the way.”


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Tags: coronavirus, coronavirus recovery, economic stimulus

Photo credit: U.S. airlines and hotels are both slated to benefit from a $900 billion coronavirus relief measure on track to pass Congress Monday. redlegsfan21 / Wikimedia

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