The Importance Of The Cares Act In The Hotel Industry

By Author: Derick James
Total Articles: 100
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The world is starting to fight against the pandemic and that’s what caused the recession of 2020. The covid-19 didn’t abandon the hotel industry; it made the hotel scenarios worse. Since quarantine was up in the air, people started living in their homes and never traveled. This travel ban impacted the hotel industry and many hotels were facing a shortage of finances.

To overcome this scenario, the government helped hotel owners by passing a law called “CARES ACT”. It was passed on the 27th of March, 2020 and it is still providing more than $2.2 trillion to help the development of the U.S economy. This CARES act has come up with many loans and funding programs to help hotel owners who are in financial crisis.

The Paycheck Protection Program (PPP)

It is also called forgivable loans and it is one of the most valuable programs of the CARES act. This is especially to help businesses who have employees below 500. This program aids business owners who are completely affected by the traces of the covid-19 financial crisis. This program helps in funding the employees who are working for the businesses affected ...
... by covid-19.

But why is it called a forgivable loan? The PPP has a set of guidelines and when the business meets those terms and conditions they are free to pay back a portion of the loan. The hotels that come under SBA criteria are picked out and PPP is sanctioned only for them. AHLA and major hotel brands are volunteering forward to help small hotel owners with these loans. The payments of the loan will be considered for categories like
Payroll processing
Interest payments for mortgage
Rental allowances
Utility costs
And other expenses during the first eight weeks of the loan.

Additional Market Loan Program

This program is applicable to employers who have more than 500 employees in their firm. This comes under the Coronavirus Economic Stabilization Act of 2020. This program mainly covers the hospitality sector. The overall program delivers funding of about $454 billion to many banks and multiple hospitality sectors. Even if your business was forced by the state or local government to shut down, employees can get a benefit from the ERTC program. The Employee Retention Tax Credit (ERTC) gives 50% of payroll credits to all the eligible employers of CESA. Even health benefits are paid to employers if they are completely engaged with active business throughout the year of 2020.

These are some of the programs that are helping hotel owners to overcome the financial crisis. Apart from handling these situations, try to save some money for hotel property taxes of 2021. If you are thinking of protesting for lowering your taxes then hotel property tax consultants can help you out to overcome these hard times. Performing a cost segregation study can also help you out to lower your property taxes than ever before. Make use of these benefits around you and try to minimize spending in hotels until we are coming out of the new normal scenario.