From the desks of the Hotel News Now editorial staff:
- PPP loan approvals dropped 84%
- Park Hotels & Resorts not giving up on large groups, execs say
- Hotel, airline stocks fell Monday
- Choice, SPT report Q1 earnings
- Tourism-dependent towns cautiously prepare to reopen
PPP loan approvals dropped 84%: As of last week, the amount of loans approved through the U.S. Small Business Administration’s Paycheck Protection Program—the federal program created by the CARES Act that has contributed more than $500 billion to small businesses, such as hotels, affected by COVID-19—dropped 84%, reports CNBC.
SBA data shows it dropped to approximately 52,000 loans approved a day. In the week prior, the program was averaging 442,000 approvals per day. The issue appears to be on the borrowers’ side, not the lenders’, with businesses that made multiple applications withdrawing after one is approved, applicants dropping out after realizing they didn’t qualify, businesses not properly documenting payroll, and borrowers afraid of government scrutiny, especially as rules and guidance change.
“The sharp slowdown in PPP participation could offer another hurdle to the battered U.S. economy, where unemployment around the country has soared to nearly 15%—the highest rate since the Great Depression,” CNBC writes.
Park Hotels not giving up on large groups, execs say: Despite low confidence that group business will bounce back quickly post-COVID-19, Park Hotels & Resorts executives told analysts on their company’s first-quarter earnings call they believe in their long-term strategy of building around large group hotels, reports HNN’s Sean McCracken.
President and CEO Thomas Baltimore Jr. said the long-term strategy of “grouping up and solid asset management of big-box hotels is a winning one.”
“Regarding our strategy, intermediate and long term, it certainly hasn’t changed,” Baltimore said. “Our top 30 hotels, which obviously are urban, convention center, resorts—the operating metrics of that … play very well against our peers.”
The more near-term hopes for the company are pinned on a rise in leisure demand in “drive-to” markets, he said.
Hotel, airline stocks fell Monday: Prices for a batch of stocks, including those of hotel and airline companies, declined midday Monday, CNBC reports.
Marriott International’s shares fell more than 5% after executives reported its first-quarter performance. Additionally, American Airlines, United and Delta all experienced declines as “investors had doubts about the U.S. reopening the economy effectively … and after the United Kingdom implemented new restrictions on people traveling to the country,” the article states.
Choice, SPT report Q1 earnings: Choice Hotels International executives told analysts during their Q1 earnings call that the company’s hotels have outperformed its competition due to being in the right segments and locations, writes HNN’s Danielle Hess.
“Our midscale brands represent two-thirds of our total domestic portfolio, a segment that outperformed in the first quarter of 2020 and continues to do so through early May. Our 410 extended-stay hotels maintained an occupancy level of 60% in the month of April, and our WoodSpring (Suites) brand was even higher at 64%,” President and CEO Pat Pacious said on the call.
Service Properties Trust executives said their company is well-positioned to weather the pandemic, writes HNN’s Stephanie Ricca, but SPT is anticipating its previously planned portfolio divestments might not happen in 2020 at all.
“We have taken multiple necessary and difficult actions to preserve capital and our liquidity position,” President and CEO John Murray said on the call.
Tourism-dependent towns cautiously prepare to reopen: The 40-room boutique Cedar House Sport Hotel in Truckee, California, a town with a population of about 16,000 that depends on summer tourism, is cautiously preparing to reopen, the Los Angeles Times reports.
Patty Baird, who owns the hotel with her husband, said she has had new bookings for late summer, but she isn’t ready to promote her hotel without a reopening date set. She also wants the reopening experience to be safe, not bare.
“There’s still too much uncertainty,” she told the newspaper. “I kind of have plan A, B, C and D in my head ready to implement. But I need just a little more information.”
Compiled by Dana Miller.