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Tourism Industry, Still Weak, Looking for Help

April 14, 2021 by Tom Ramstack

WASHINGTON — The U.S. economy is continuing its recovery from the COVID-19 pandemic but not fast enough for tourism officials who testified before a Senate subcommittee Tuesday.

They said their industry was the hardest hit during the pandemic shutdown and will be one of the slowest to recover without government assistance.

“We were on track to set new records” before the pandemic devastated Florida’s tourism industry, said Carol Dover, president of the Florida Restaurant and Lodging Association. “When COVID hit, we were shell-shocked.”

The Centers for Disease Control reported Monday that 28% of the U.S. population is fully vaccinated with as many as four million more Americans being added to the list almost daily.

Meanwhile, President Joe Biden is pushing his $2.3 trillion jobs and infrastructure package in Congress to help in the economic recovery.

Travel and tourism industry officials who testified to the Senate Commerce, Science and Transportation subcommittee on tourism, trade and export promotion were less optimistic about a return to business as usual.

“Half of the hotel rooms are expected to remain empty this year,” Dover said. “Thousands of hotels have closed and been foreclosed.”

The travel industry’s economic activity dropped 42% in the United States last year, from $2.6 trillion in 2019 to $1.5 trillion in 2020, according to the U.S. Travel Association.

The travel and tourism industry tried to help its employees with food and supplies even while laying them off, she said. Now, many of them have left the industry.

“We still desperately need your help as we rebuild,” Dover said.

The American Rescue Plan Act of 2021 that Biden signed into law on March 11 provides some of the relief sought by the industry. 

The $1.9 trillion COVID relief package establishes the Restaurant Revitalization Fund.

It offers $28.6 billion in relief grants to small and mid-sized restaurants hurt by the pandemic. The money is being distributed through the Small Business Administration.

Now another bill is pending that would broaden federal assistance to the hotel and convention industry.

The Hospitality and Commerce Job Recovery Act of 2021 would give tax credits to hospitality industry businesses and their customers.

The businesses could claim credits for any costs associated with reopening or increasing service at an establishment forced to close down or reduce operations during the pandemic. They include renovation, remediation and labor costs needed to prevent the spread of COVID-19.

Their customers could claim 50% tax write-offs for their lodging and business expenses to attend trade shows.

“At the current pace, the travel industry is not expected to fully recover until 2025,” said Jorge Perez, regional portfolio president for MGM Resorts International.

Industry officials said the Hospitality and Commerce Job Recovery Act would shorten the recovery time from five to three years.

Their pleas won bipartisan support from lawmakers on the subcommittee on tourism, trade and export promotion.

Sen. Jacky Rosen, D-Nev., talked about the devastation that the pandemic’s 30% unemployment rate brought to her home state of Nevada last year.

“They were unemployed through no fault of their own,” she said. “It was all because of the COVID-19 pandemic.”

The subcommittee, which she chairs, plans further hearings in the near future to determine whether airports, outdoor recreation businesses and related industries also need federal assistance.

“We’re going to get Americans and the world traveling again,” she said.

Sen. Roger Wicker, R-Miss., added a note of skepticism that federal assistance would provide a fast recovery.

“The travel and tourism industry is a key pillar of the U.S. economy,” Wicker said.

However, he added, “I realize the impacts of the pandemic will be long-lasting.”

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