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.”
Partner Voices
Overview:
The award-winning Orange County Convention Center (OCCC) goes the extra mile to make every day extraordinary by offering customer service excellence and industry-leading partnerships. From their dedicated in-house Rigging team to their robust Exhibitor Services, The Center of Hospitality brings your imagination to life by helping you host unforgettable meetings and events. With more than 2 million square feet of exhibit space, world-class services and a dream destination, we are committed to making even the most ambitious conventions a reality.
In October 2023, the Orange County Board of County Commissioners voted to approve allocating Tourist Development Tax funding for the $560 million Phase 5A completion of the OCCC. The Convention Way Grand Concourse project will include enhancements to the North-South Building, featuring an additional 60,000 square feet of meeting space, an 80,000- square-foot ballroom and new entry to the North-South Building along Convention Way.
“We are thrilled to begin work on completing our North-South Building which will allow us to meet the growing needs of our clients,” said OCCC Executive Director Mark Tester. “As an economic driver for the community, this project will provide the Center with connectivity and meeting space to host more events and continue to infuse the local economy with new money and expanding business opportunities.”
Amenities:
The Center of Hospitality goes above and beyond by offering world-class customer service and industry-leading partnerships. From the largest convention center Wi-Fi network to custom LAN/WAN design, the Center takes pride in enhancing exhibitor and customer experience.
The OCCC is the exclusive provider of electricity (24-hour power at no additional cost), aerial rigging and lighting, water, natural gas and propane, compressed air, and cable TV services. Convenience
The Center is at the epicenter of the destination, with an abundance of hotels, restaurants, and attractions within walking distance. Pedestrian bridges connect both buildings to more than 5,200 rooms and is within a 15-minute drive from the Orlando International Airport. The convenience of the location goes hand-in-hand with top notch service to help meet an event’s every need.
Gold Key Members
The OCCC’s Gold Key Members represent the best of the best when it comes to exceptional service and exclusive benefits for clients, exhibitors and guests. The Center’s Gold Key memberships with Universal Orlando Resort, SeaWorld Orlando and Walt Disney World greatly enhance meeting planner and attendee experiences offering world-renowned venues, immersive experiences and creative resources for their events.
OCCC Events:
This fiscal year, the OCCC is projected to host 168 events, 1.7 million attendees, and $2.9 billion in economic impact.
The Center’s top five events during their 2022-2023 fiscal year included:
AAU Jr. National Volleyball Championships 2023
200,000 Attendees
$257 Million in Economic Impact
MEGACON 2023
160,000 Attendees
$205 Million in Economic Impact
Open Championship Series 2023
69,500 Attendees
$89 Million in Economic Impact
Sunshine Classic 2023
42,000 Attendees
$54 Million in Economic Impact
Premiere Orlando 2023
42,000 Attendees
$108 Million in Economic Impact
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