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Georgia’s hotels call for federal relief to stay open, protect remaining jobs

Atlanta Marriott Marquis, atrium The Atlanta Marriott Marquis reported plans to lay off 784 workers on March 14. File/Credit: Kelly Jordan

By David Pendered

Metro Atlanta is in the Top 10 regions in the nation in the number of hotels that are delinquent in paying their mortgages, a new report shows. The massive layoffs in the hotel sector at the start of the pandemic evidently did not prevent the financial stress.

Atlanta Marriott Marquis, atrium

The Atlanta Marriott Marquis reported plans to lay off 784 workers on March 14. File/Credit: Kelly Jordan

Nearly 1,700 hotel workers were to be laid off on just one day, March 14, according to data submitted by the hotels and reported by the Georgia Department of Labor.

The ax is to continue to fall through, at least, Sept. 30. That’s the date Wyndham Atlanta Galleria has reported it intends to lay off an estimated 50 workers.

Highlights of the delinquency report by Trepp, a monitor of the commercial real estate industry, show metro Atlanta’s relative standings in three key areas of mortgage delinquency:

  • 10th – Highest dollar value of delinquent loans ($169.5 million);
  • 6th – Highest percentage of delinquent loans (11.7%);
  • 6th – Highest number of delinquent loans (19).

The figures are as of July 20, the most recent available, according to Trepp’s report. The hotel sector has been the most heavily hit since the start of the COVID-19 pandemic, according to the report.

Four organizations of hotel operators cited the report as part of their campaign to urge Congress to provide relief funds from an expected future round of federal funding related to COVID-19. The groups are lobbying for passage of version of the bill drafted by the U.S. House of Representatives – the HOPE Act.

The four organizations are: American Hotel and Lodging Assoc.; Asian American Hotel Owners Assoc.; Latin Hotel Assoc.; and National Association of Black Hotel Owners, Operators and Developers.

Nearly 4,000 industry leaders signed a letter sent to Congress on Aug. 22, including dozens of hotel operators in metro Atlanta and Jim Sprouse, executive director of the Georgia Hotel and Lodging Assoc.

Atlanta Marriott Marquis

The Atlanta Marriott Marquis was among the first hotels in metro Atlanta to announce layoffs at the start of the pandemic. Credit: Kelly Jordan

The HOPE Act would help commercial property owners by providing them with temporary liquidity in exchange for a preferred equity interest in the property, according to Chip Rogers, the former Georgia legislator who now serves as president/CEO of the AHLA. No new federal funding is needed, as the program would be backed by proceeds of the existing CARES Act, Rogers said in a statement.

Rogers observed:

  • “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. 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.”

Hotel staffs already have been hard hit, according to data submitted to the Georgia Department of Labor.

Nearly half of those 1,690 estimated layoffs on March 14 were posted by the Atlanta Marquis, according to a report submitted by Marriott Hotel Services Inc. The same group posted 22 layoffs at Stone Mountain Inn; 237 layoffs at the Atlanta Evergreen Marriott, in Stone Mountain; and 77 layoffs at its Midtown location.

Andy Ingraham, president/CEO of the National Association of Black Hotel Owners, Operators, and Developers (NABHOOD), cited the desire to protect jobs in his call for passage of the HOPE Act:

  • “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.”

 

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David Pendered

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow.

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2 Comments

  1. atlanta guy August 23, 2020 10:11 pm

    with all the trouble in the hotel industry I would love to know how the city plans to pay for its part of the stadium, that was built on promises of hotel tax revenues?Report

    Reply
  2. David Pendered August 23, 2020 11:31 pm

    Hello, atlanta guy,
    The credit rating on the stadium bonds was downgraded in July by Moody’s Investors Service. Likewise with the rating on the bonds for the State Farm Arena. The rating actions did not predict default. The bonds have a reserve fund to cover some degree of revenue shortfall.
    The story about the credit downgrades appeared July 14 under the headline: ‘Credit downgrades for loans on Mercedes Benz Stadium, State Farm Arena announced Tuesday’
    The permalink to the story is:
    https://saportareport.com/credit-downgrades-for-loans-on-mercedes-benz-stadium-state-farm-arena-announced-tuesday/
    Best regards,
    DavidReport

    Reply

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