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For Arkansas’ hospitality industry, congressional approval of a $900 billion COVID-19 relief package was a long time coming and much appreciated, because it included segments of the industry, like event venue operators, that were left out of the first relief package.
The spending package would:
- Launch a second iteration of the Paycheck Protection Program, which offered forgivable loans designed to soften job losses from the pandemic;
- Increase the amounts of PPP loans from 2.5 times monthly payroll costs to 3.5 times monthly payroll costs for restaurants and hotels;
- And allow businesses — like mid-sized and larger restaurant and hotel groups — that employ more than 300 to apply for the PPP loans, provided they don’t employ more than 300 at each location.
The bill also would allow businesses to deduct business expenses paid with PPP loans, enhance the Employee Retention Tax Credit, extend the augmented Work Opportunity Tax Credit and increase the tax deduction for business meals.
“It is a welcome relief,” Montine McNulty, executive director of the Arkansas Hospitality Association, told Arkansas Business late Tuesday. “And it will really help to keep people going for a while. It doesn’t include everything that needs to be done, but it is a huge help. It’s the second largest stimulus, ever.”
McNulty said that, combined with the state’s $250,000 Business Interruption Grant program, the federal relief would “potentially help our industry survive.”
“We’re much better off than some other states because our state officials have listened and helped,” she said.
McNulty said AHA members are “greatly relieved” that help is coming.
“I mean they really, really need the money,” she said. “And I think it would be pretty quick that they will have the money in the bank. So I don’t think it will take them long to get it.”
Another benefit of the new federal stimulus package is the direct payments it will provide to Americans: $600 for individuals making up to $75,000 a year, $1,200 for couples making up to $150,000 and $600 per child. That money will be pumped into the economy and could encourage people to patronize restaurants as well as hotels, McNulty said.
The bill also includes $15 billion in aid for event venues.
“We are so excited that they included us in there and hopefully this will let us survive to fight another day,” said Steve Arrison, CEO of Visit Hot Springs. “We’re just trying to keep our nose above the water. We’re trying to keep our head above the water and just survive until business comes back. … It’s a great Christmas present for our industry.”
Arrison said Visit Hot Springs got no help from the earlier federal CARES Act because it didn’t qualify for the PPP. It would qualify under the new plan, and Arrison plans to apply so it can retain its remaining 31 employees. Before the pandemic triggered layoffs, Visit Hot Springs had 71 employees.
“Our industry has been so, gosh, I mean, it’s been devastated,” he said. “And we’re just so thankful that they realized that we needed the assistance and that we were included in this new bill. … Everybody said, ‘Well, you know, it’s the new year, but we’re still seeing cancellations for January, February and March. We had a May cancellation last week.”
Arrison continued, “It’s not like all of a sudden the revenue is going to come get turned back on Jan. 1. We’ve sustained losses since March of last year and it’s going to continue, in my opinion, to probably June of ‘21.”
Arrison said events at Visit Hot Springs venues that include the Hot Springs Convention Center and Bank OZK Arena have dried up and so has the revenue they generate. But buildings have to be maintained. It’s an expense the organization has been shouldering without help from the feds, Arrison said.
Both he and McNulty credited an industry-wide effort to get the aid package through Congress.
“It has been an unbelievable process that has had a lot of dedicated people,” McNulty said. “We’ve been working as a unit, all over the country, trying to pull this off and to demonstrate the need. And we really needed this now, we didn’t need to wait. If they had waited until after Christmas for a new administration, it would have taken several months to get something out. So this is a lifeline. Yeah, it is a lifeline for businesses in Arkansas.”