Fewer of us are traveling these days, and there’s new data showing how that’s affecting the hotel industry. The research company Trepp found that more than 23% of commercial mortgage loans taken out by hotels are at least 30 days delinquent as of July. That’s the biggest delinquency rate since Trepp started tracking this in 2009.
Hotel owners often take out a lot of debt to buy a hotel or build one from scratch. Paying back that debt is a big cost.
“Really, payroll is one huge expense, and the other big expense is your debt service,” said Shaiza Damji, an owner of 360 Degree Hotel Group, which runs six hotels in Washington state near the Canadian border.
Damji said paying back her debt is getting harder. The Canadian border is closed to nonessential travel, and tourism revenue is drying up.
“No conferences, no conventions, the tech industry’s not traveling, so it’s just really soft,” Damji said.
She said she’s been able to tap reserves she keeps with her lender to meet her payments.
Manus Clancy, a senior managing director with the research company Trepp, said that’s what a lot of hotel owners are doing, even though reserves are usually used to fix carpets and broken TVs.
“If your occupancy is 20% right now, the likelihood of you breaking a lot of TVs or staining a lot of rugs is not very high,” Clancy said.
But those reserves can only go so far.
Damji said she can only use her reserves for three more months.
What’s going on with extra COVID-19 unemployment benefits?
The latest: President Donald Trump signed an executive action directing $400 extra a week in unemployment benefits. But will that aid actually reach people? It’s still unclear. Trump directed federal agencies to send $300 dollars in weekly aid, taken from the federal disaster relief fund, and called on states to provide an additional $100. But states’ budgets are stretched thin as it is.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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August 20, 2020 at 05:53PM
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