NATIONAL HARBOR, Md. - What has your hotel association done for you? In the case of the Asian American Hotel Owners Association, in the past year the organization has managed to effect change on U.S. tax code, sponsor the Americans With Disabilities Act Education and Reform Act and train each member of its board of directors in human trafficking awareness, for starters. The message at the organization's 2018 conference, which is taking place this week at the Gaylord National Resort & Conference Center? When many individuals share one voice, big things can happen.
Normally conferences such as AAHOA's begin with a call to action to rile up the organization's base. This year, the conference began with something akin to a victory lap as Bavesh Patel, chairman of AAHOA, took to the stage to describe how the association succeeded in its three-year effort to push what is now known as the Tax Cuts and Jobs Act. According to Patel, the process involved meeting with members of Congress a multitude of times to explain the intricacies of what the organization was after, but it all paid off. As a result, the new legislation doubles estate tax exemptions to $22 million per couple and allows owners to exempt up to 20 percent of their revenues from taxes. Other facets of the bill include the slashing of the corporate tax rate from 35 percent to 21 percent, and a lowered marginal tax rate from 39.6 percent to 37 percent.
Patel went so far as to state that the Tax Cuts and Jobs Act represents AAHOA's "greatest accomplishment to date."
Winning Through Education
AAHOA is leveraging its base of nearly 18,000 members by using them to educate Congress on issues facing the industry, giving it the ability to organically change the law. One of the successes AAHOA's leadership trumpeted during the opening session of the conference was the strides it has made toward curbing what Rogers referred to as "drive-by lawsuits" targeting hotels for breaches of the Americans with Disabilities Act. These lawsuits are generated when a lawyer visits a hotel, declines to stay and files a lawsuit over noncompliance before moving on to find a new target.
In response, AAHOA mobilized its membership base, sending more than 500 AAHOA members to national advocacy conferences before meeting with Congress. The result is the ADA Education and Reform Act, which was assessed by Congress in February and provides hotel operators with a limited window to address ADA concerns after they are reported, without getting lawyers involved in the process.
The response from the disabled community on this decision has been mixed, with another organization, Disability Action for America, claiming any steps taken to weaken the ADA will lead to additional attacks on civil-rights laws in the future. While the extent of this remains to be seen, the ADA Education and Reform Act (otherwise known as HR 620) has yet to officially be voted on in the Senate.
Because the organization has so many active members (with Patel stating early in the conference that AAHOA added more than 1,000 additional lifetime members over the past year, with more than 40 percent of its membership base holding lifetime status), the organization is also seeking to educate its own members through training to create social changes within the broader hospitality industry. Case in point, Patel said that as of February every one of AAHOA's directors completed a course in human trafficking awareness, which the organization is drawing on to stifle the practice in its members' hotels.
"Let's commit to this challenge, and let's lead a country where human trafficking never takes another life," Patel said.
Calling Out 2019
One aspect of the recent tax code changes that AAHOA helped to maintain is the IRS 1031 exchange program. When a seller offloads a real estate property, using the 1031 exchange program they are able to avoid paying capital gains tax on money earned from the sale as long as they reinvest this money into a new property. In effect, this means sellers are only paying capital gains tax (which clocks in at 20 percent) when they ultimately convert the funds they earn from a sale into cash, not when reinvesting. Bharat Shah, AAHOA’s chairman from 1996-1997, credited the organization with helping retain this facet in the U.S. tax code was lawmakers were preparing to drop it.
Chip Rogers, president and CEO of AAHOA, said the changes to the U.S. tax code prioritize small business owners by increasing their ability to invest in property development, raise wages, create more jobs and build more hotels. Rogers, now entering his fourth year leading AAHOA, said his optimism for the future has never been greater, and he sees the organization's most recent successes as a sign of bigger things to come.
"Last year, I told you I planned on standing here in Maryland, telling you what a great year it was. And as great a year it was, the future is going to be even greater," Rogers said. "The U.S. economy is booming, and tax cuts mean you get to keep more of your hard-earned money. Next year, at our convention in San Francisco, I plan to be onstage talking once again about all the great successes we have achieved."