Facing a Historic Wave of Hotel Foreclosures, Industry Leaders Sign On to HOPE Act

August 25, 2020

With a new report showing nearly one out of every four hotel commercial mortgage-backed securities (CMBS) loans are delinquent, industry leaders continue to press Congress to enact the HOPE Act. This bipartisan piece of legislation was introduced by Representatives Van Taylor (R-Texas), Al Lawson (D-Fla.), and Andy Barr (R-Ky.) to provide assistance to small businesses operating in the commercial real estate market. 

As part of the push to pass the legislation, nearly 4,000 hotel industry leaders — including those from the American Hotel & Lodging Association (AHLA), Asian American Hotel Owners Association (AAHOA), Latino Hotel Association (LHA) and National Association of Black Hotel Owners, Operators & Developers (NABHOOD) — signed an urgent letter to Congress urging immediate action to help hotels avoid foreclosure and the loss of tens of thousands of jobs. 

“With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently,” said Chip Rogers, president and CEO of AHLA. “Tens of thousands of hotel employees will lose their jobs, and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate.”

According to Rogers, the HOPE Act would address the unique challenges of hotel owners by providing the temporary liquidity needed to keep their doors open in exchange for a preferred equity interest in the property. The legislation would not require any new funding and would utilize existing appropriations from the CARES Act Economic Stabilization Fund.

“The HOPE Act is essential in helping provide hotel owners with liquidity when we need it most and will serve to help keep businesses open, thus saving local jobs,” said Andy Ingraham, president and CEO of NABHOOD.

Conducted by Trepp, the Hotel CMBS Report: An Update on Hotel Commercial Real Estate revealed that the percentage of loans 30 or more days delinquent was 23.4 percent as of July 2020 — the highest percentage on record. In contrast, the percentage of hotel loans 30 or more days delinquent at the end of 2019 was 1.3 percent.

In all, the report showed that $20.6 billion in hotel CMBS loans were 30 or more days delinquent as of July, compared to $1.15 billion as of December 2019. As a way of comparison, the highest volume of delinquent hotel loans during the Great Recession was $13.5 billion. 

“Hoteliers are responsible for millions of jobs in communities across the nation, but unless Congress acts, there may not be businesses left for those workers to return to at the end of this pandemic,” said Cecil Staton, president and CEO of AAHOA. “We are optimistic that the HOPE Act will help hoteliers to address the debt crisis facing the lodging industry, and save good American jobs and small businesses.”

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Partner Voices
Less than six months ago, Lisa Messina joined the Las Vegas Convention and Visitors Authority (LVCVA) as the first-ever chief sales officer after leading the sales team at Caesars Entertainment. A 12-year Las Vegas resident, Messina is a graduate of Cornell University’s School of Hotel Administration and serves on MPI International’s board of directors. TSNN had a chance to catch up with this dynamic leader and talk to her about her vision for the new role, current shifts in the trade show industry, creating more diversity and equity within the organization, and advice to future female leaders. Lisa Messina, Chief Sales Officer, LVCVA With Las Vegas becoming The Greatest Arena on EarthTM, what are some of the things you’re most excited about in your role? Our team was at The Big Game’s handoff ceremony earlier this month, and I couldn’t help but think, “We’re going to crush it next year!”  These high-profile events and venues not only drive excitement, but also provide unmatched opportunities for event planners. Allegiant Stadium hosts events from 10 to 65,000 people and offers on-field experiences. Formula 1 Grand Prix will take place in Las Vegas in November, after the year-one F1 race, the four-story paddock building will be available for buyouts and will also offer daily ride-along experiences that will be available for groups. And, of course, the MSG Sphere officially announced that it will open in September, ahead of schedule, with a U2 residency. It’s going to be the most technologically advanced venue as far as lighting, sound, feel, and even scent, and it will be available for buyouts and next-level sponsorships inside and outside. There’s no ceiling to what you can do when you’re doing events in Las Vegas.  Allegiant Stadium As the trade show and convention business returns to the pre-pandemic levels, what shifts are you noticing and how do you think they will impact the industry going forward? Our trade show organizers are very focused on driving customer experience. Most of our organizers are reporting stronger exhibitor numbers and increased numbers of new exhibitors, with trade shows proving to be almost or above 2019 levels. Now our organizers are really doubling down on driving attendance and focusing on the data to provide that individualized, customized experience to help attendees meet their goals and get the best value. Some companies continue to be cautiously optimistic with their organizational spend when it comes to sending attendees, but I think it will continue to improve. As the U.S. Travel Association makes more progress on the U.S. visa situation, we also expect a growing influx of international attendees. What are some innovative ways the LVCVA helps trade show and convention organizers deliver the most value for their events? We focus on customer experience in the same way that trade show organizers are thinking about it. We got rave reviews with the West Hall Expansion of the Las Vegas Convention Center (LVCC), so over the next two years, we will be renovating the North and the Central halls, which will include not just the same look and feel, but also the digital experiences that can be leveraged for branding and sponsorship opportunities.  Vegas Loop, the underground transportation system designed by The Boring Company, is also a way we have enhanced the customer experience. Vegas Loop at the LVCC has transported more than 900,000 convention attendees across the campus since its 2021 launch. Last summer, Resorts World and The Boring Company opened the first resort stop at the Resorts World Las Vegas , with plans to expand throughout the resort corridor, including downtown Las Vegas, Allegiant Stadium and Harry Reid International Airport. The LVCVA also purchased the Las Vegas Monorail in 2020, the 3.9-mile-long elevated transportation system that connects eight resorts directly to the convention center campus. This is the only rail system in the world that integrates fares directly into show badges and registration. For trade show organizers, these transportation options mean saving time, money and effort when it comes to moving groups from the hotels to LVCC and around the city. Also, the more we can focus on building the infrastructure around the convention center, the more it supports the customer experience and ultimately supports our trade show organizers. Scheduled to debut in Q4, Fontainebleau Las Vegas will offer 3,700 hotel rooms and 550,000 square feet of meeting and convention space next to LVCC.  What are some of the plans for advancing DEI (diversity, equity and inclusion) within your organization? We’re currently partnering with instead of working with a leading consulting firm, to lay the foundation and create a solid DEI plan and be the leader when it comes to DEI initiatives. The heart of that journey with the consulting firm is also talking to our customers about their strategic approaches to DEI and driving innovation in this space.  What are your favorite ways to recharge? My husband and I have an RV and we’re outdoorsy people. So, while we have over 150,000 world-class hotel rooms and renowned restaurants right outside our doorstep, one of my favorite things to do is get out to Red Rock Canyon, the Valley of Fire, and Lake Mead. Five of the top national parks are within a three-hour drive from Las Vegas, so there’s a lot you can do. We love balancing the energy of Las Vegas with nature, and we’re noticing that a lot of attendees add activities off the Strip when they come here.  Valley of Fire What advice would you give to women following leadership paths in destination marketing? I think it’s about being laser-focused on what you want to accomplish; building a team around you that lifts you and helps you achieve your goals; and being humble and realizing that you do it as a group. No one gets this done alone. Thankfully, there are a lot of women in leadership in this organization, in our customers’ organizations, and in this city that we can be really proud of. We’re a formidable force that is making things happen.   This interview has been edited and condensed. This article is exclusively sponsored by the Las Vegas Convention & Visitors Authority. For more information, visit HERE.