UNITE HERE Urges SBA to Collect More Information on PPP Recipients

Hotel workers’ union criticizes industry efforts to avoid scrutiny and asks the SBA to find out how billions in federal assistance were spent as millions of hospitality workers remain unemployed

WASHINGTON--(BUSINESS WIRE)--Hotel workers’ union UNITE HERE has urged the Small Business Administration (SBA) to move forward with plans to collect more data from some Paycheck Protection Program (PPP) recipients, despite pressure from industry groups to subject borrowers to less scrutiny. The data would allow SBA to determine if the largest PPP recipients actually needed the money when they requested loans, and could also shed light on how much of the money was actually used as Congress intended: to provide income and health benefits to workers.

SBA recently issued a provisional form asking PPP recipients for basic information about their businesses. A group of 80 business groups – including the US Chamber of Commerce and the American Hotel and Lodging Association – objected, and asked Congress to make SBA withdraw the request for data.

The data request would only apply to companies that received over $2 million from the PPP, a program intended to help small businesses keep workers on payroll in the wake of economic damage caused by the coronavirus pandemic.

“Millions of hospitality workers remain unemployed or underemployed and many lost their health insurance, even though their employers received PPP which was supposed to be used primarily for worker pay and benefits,” said UNITE HERE President D. Taylor. “We want to know what happened to all that money. The SBA should resist powerful business lobbies and tell the American people: how much of that money found its way to workers?”

While the SBA has approved more than $42 billion in PPP loans to the hospitality sector, unemployment in the industry was still nearly 16% in October, and in big convention hotel markets, unemployment remains significantly higher. Ninety-eight percent of UNITE HERE’s hotel members were unemployed at the end of March when the CARES Act was passed. Taylor points out that 80% are still unemployed, and most lost health insurance this Summer as the pandemic raged.

One hotel company that would be subject to the proposed SBA data request would be Omni Hotels & Resorts, a luxury hotelier. Omni, its parent TRT Holdings, and subsidiaries received 32 PPP loans for 32 of its owned hotels, totaling between $52,000,000 and $120,000,000. Despite this, several Omni properties which received PPP loans have been closed and have not paid workers. Hundreds of workers at five of the unionized properties that received PPP loans remain unemployed.

The American Hotel and Lodging Association successfully lobbied to exempt hospitality companies from the SBA’s affiliation rules, which is why large corporations like Omni were able to apply for and receive multiple “small business” loans. UNITE HERE’s analysis of SBA data released in August revealed that Omni and scores of other hotel corporations and private equity firms that owned luxury hotels and resorts took advantage of that loophole.

For hotel workers, this data request has personal consequences. "Despite working here for 21 years, I was laid off by my hotel back in March,” said Quilcia Moronta, a health club attendant at the Omni Providence Hotel. “I understand that they have received some government help, PPP money, to help employees in this time of need. But they haven't given us the money, and I’m still struggling to take care of my family."

Click here to view full comments submitted by UNITE HERE to the SBA