During the “Policy Matters” session of the online NYU International Hospitality Industry Investment Conference, representatives from several industry associations gathered to talk about what next steps the industry and its organizations need to take to drive recovery.
With the presidential election in the rearview mirror and a possible COVID-19 vaccine on the horizon, the tone of this panel was decidedly more optimistic than other similar conversations have been.
Calls for congressional support continued, with Andy Ingraham—president, founder and CEO, National Association of Black Hotel Owners, Operators & Developers—calling on hoteliers to impress the need for help on every member of Congress. “It is in all our best interest to come up with a common solution,” he said. “Yes, I was happy to hear the comments from [Senate Majority Leader] Mitch McConnell about finding a quick relief effort, and having Speaker [Nancy] Pelosi support it, but now it comes to the time where they've got to act. And what we've seen on Capitol Hill is a longer period of time than we want to.” After months of “less action,” Ingraham added, “now's the time for us to have more action.”
Beyond financial support, the panelists agreed that the industry needs logistical support in terms of infrastructure investment. “It's been very frustrating to watch the infrastructure can be kicked down the road,” said Roger Dow, president and CEO of the U.S. Travel Association, noting that infrastructure deficits are driving travelers to shorten their trips when roads prove too congested. “If we can ... get the roads built, it's going to be great for the economy.” Similarly, he noted, the country’s airports are all poorly rated by international associations—but a downturn with low traffic is the perfect time to make the kinds of improvements that will encourage both domestic and international travel. “This is an opportunity to really not only jumpstart the economy but to build it for decades and decades to come,” he said. “So it's got to be a priority, and I think the door might just be open this time to move from talk to action.”
“Obviously infrastructure projects—as important as they are—take a great deal of time to implement and to get built,” AAHOA President and CEO Cecil P. Staton cautioned, but said he hoped some of the improvements would actually begin soon.
Tax Credits and the Value of Travel
The USTA has proposed a $4,000 tax credit for travel, Dow said, that is meant to demonstrate the additive nature of the industry. “When people travel, they spend money and they create jobs," he said. "If you really look at it, a small tax credit per family and travel or tax credit for meetings will be additive because it's going to put people to work and they start spending money all around.”
The credit, Ingraham noted, would go right back into the industry because so many local improvements are funded by taxes on travel-related expenses: “Cities are hurting, counties are hurting. This is not only a way to stimulate travel but it's a way to stimulate the complete economy because travel does one thing: Travel impacts every aspect of the economy, both domestically and internationally.”
Destination marketing organizations also need financial support, Dow added, because these companies usually are funded by hotel and car rental taxes. “The tragic mistake was when the [Paycheck Protection Program] was put together,” he said, explaining that 501(c)(6) organizations—which include DMOs—were excluded from that relief effort as lobbying organizations, along with museums and performing arts companies. “One of the most important things we've got to do when PPP comes back is get the DMOs included because they have no money,” he said. With funding, the DMOs “can bring their people back and start promoting their destinations.”
The American Hotel & Lodging Association has been trying to demonstrate the value of travel on local economies for years, said Chip Rogers, president and CEO. “Sometimes I felt like we were trying to convince people of something that they didn't want to be convinced of,” he said. “They're convinced now. And so I think, at least in making the case that our industry has enormous impact even at the local level, that case has been made. Now the question is, how much are they willing to invest in it?”