Coronavirus and Meetings
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Updated Oct. 16, 2020
Leading travel associations, including the American Hotel and Lodging Association, U.S. Travel Association, American Gaming Association and the Nevada Resort Association, have announced their support for a new bipartisan bill that would provide relief for the meetings, travel and hospitality industries.
The Hospitality and Commerce Jobs Recovery Act was introduced on Oct. 15, by Sens. Catherine Cortez Masto (D-Nev.) and Kevin Cramer (R-N.D.). The bill aims to stimulate the economy by creating new recovery incentives and tax credits.
Specifically, the bill would:
- Establish a tax credit for the cost of attending or hosting a convention, business meeting or trade show in the U.S. between Jan. 1, 2021 and Dec. 31, 2023
- Improve the Employee Retention Tax Credit, which was established under the CARES Act and encourages employers to keep employees on their payroll
- Repeal the changes made to the 2017 Tax Cuts and Jobs Act in order to restore the Entertainment Business Expense Deduction, which allowed businesses to deduct up to 50 percent of entertainment expenses that were directly related to business activity
- Create a tax credit for restaurants and food service business that would cover any cost associated with reopening or increasing service at an establishment that was forced to close down or reduce operations due to Covid-19. This could include renovations, testing or labor costs needed to prevent the spread of coronavirus. The credit would be effective between the date of enactment and Dec. 31, 2022.
- Provide a modest tax credit for qualified travel expenses for many Americans
"The bipartisan Hospitality and Commerce Job Recovery Act includes a number of crucial measures to provide much-needed economic stability to millions of Americans whose livelihoods rely on travel and tourism, while also helping drive demand to more quickly bring back the jobs that have been lost to the pandemic," said Tori Emerson Barnes, executive vice president of public affairs and policy for the U.S. Travel Association. "The bill’s targeted approach to providing tax incentives would ensure that these hard-hit businesses — including those in the meetings, events and entertainment segments — get the help they so desperately need to recover from this crisis."
Struggling Small Businesses
Research from the U.S. Travel Association shows that the leisure and hospitality industry accounts for nearly 40 percent of all Covid-19-related job losses in the country. Without aid from Congress, 50 percent of all travel-supported jobs are expected to be lost by the end of December.
Small businesses, in particular, are struggling to survive. More than half of all small travel businesses (55 percent) in the U.S. are at risk of either taking longer than six months to recover or never recovering at all, according to new data from the U.S. Travel Association.
Prepared by Tourism Economics, the numbers indicate a continued extreme threat to travel-supported jobs, which employed 1 in 10 Americans pre-pandemic. Fully 95 percent of all accommodation and food-service jobs are within small- and medium-sized businesses, as defined by the U.S. Small Business Administration, with only 5 percent of those sectors' employment found in large businesses. By comparison, only 28 percent of manufacturing jobs are found in small- or medium-sized businesses.
"These numbers highlight the urgent need for further legislative measures to provide immediate relief to small travel businesses and their employees, many of which were unable to access earlier rounds of aid," said Roger Dow, president and CEO of U.S. Travel. "Each moment that passes makes it likelier that more small businesses will shut their doors and never reopen — meaning those jobs are gone for good."
More than half of travel-supported jobs in the U.S. disappeared between the onset of the pandemic and May 1, according to U.S. Travel. The overall U.S. economy is projected to lose $1.2 trillion this year because of the drop in travel. Prior to the pandemic, travel was a top 10 employer in 49 states and the District of Columbia.
On Sept. 18, a host of industry leaders gathered by the Economic Innovation Group, a research and advocacy organization focused on new jobs and economic growth, renewed calls for Congress to pass more legislation to help struggling businesses around the country. Among the participants were representatives of the U.S. Chamber of Commerce, the U.S. Travel Association, the American Hotel and Lodging Association, and NYC & Company, New York's destination marketing organization.
"Seven months into the pandemic, small businesses across the country are becoming increasingly pessimistic about their ability to survive absent additional relief," said John Lettieri, president and CEO of the EIG. "So, it's clear that the crisis is far from over and it's clear to us that the House and Senate cannot be allowed to adjourn without passing additional small-business relief. While an extension of the Paycheck Protection Program would certainly be preferable to nothing, we think Congress can and must do better."
Among the companies represented by the U.S. Chamber of Commerce, 96 percent have fewer than 100 employees and 75 percent have fewer than 10 employees. Maxine Turner, board member of the U.S. Chamber of Commerce and president of Cuisine Unlimited, fears for her 40-year-old catering and event firm in Salt Lake City.
"We are now anticipating that our usual $5 million company will do near $600,000 [in business] by years' end," said Turner, who has had to furlough almost all of her Cuisine Unlimited staff. "We have lost many of our core, very valued and experienced staff, who have been forced to take other jobs because of the end of the $600 support funds initiated by Congress. Every small business owner is screaming from the rooftop for Congress to pass a meaningful bill, to help us in this critical time. I'm here to scream out for all of us."
Chip Rogers, president and CEO of the AHLA, is worried for the smaller, franchised hotel owners across the country. "We recently did a study among our membership, which includes about 28,000 folks," he said. "Seventy-four percent of hoteliers say they anticipate further layoffs and more than two-thirds say they will be out of business within six months if something doesn't happen. These are real numbers. Millions of jobs and the livelihoods of people who have built their small businesses for decades are just withering away because Congress has done nothing."