Photo by Lee Milner.
Supporters of a $250 million allocation of federal funds to help Illinois hotels recover from the COVID-19 pandemic explain legislation to carry out the proposal at a March 8 Capitol news conference. They included, from left, state Rep. Kam Buckner, D-Chicago; Sen. Sara Feigenholtz, D-Chicago; Michael Jacobson, CEO of the Illinois Hotel & Lodging Association; Darin Dame, general manager of Springhill Suites by Marriott in Springfield; and Anwar Martin, general manager of DoubleTree by Hilton Hotel in Bloomington.
High gasoline prices and inflation worry Marianne Zarndt as the Springfield hotel she runs sees more customers during the latest lull in the COVID-19 pandemic but the traditionally busy summer season approaches.
The uncertainty over whether the latest economic factors will depress local tourism is all the more reason lawmakers should support a proposed $250 million infusion for Illinois’ hotel industry from the federal American Rescue Plan Act., she said.
“It would help us keep up with payroll,” Zarndt said from her office as general manager of Northfield Inn, Suites & Conference Center at 3280 Northfield Drive.
“We’re not back up to full staff,” she said. “We’re still struggling with people not showing up for job interviews.”
The Illinois Hotel & Lodging Association says two bills pending in the General Assembly to enact the Hotel Jobs Recovery Plan would set aside the money for one-time grants of $1,500 per room for every hotel in the state.
The money would represent 3% of total ARPA funds received by state government, and 80% of the grants would have to be used for payroll costs such as wages and benefits for employees, according to association president and chief executive officer Michael Jacobson.
The grants would supplement funds many Illinois hotels received through the federal Paycheck Protection Program. But many of the state’s largest hotels didn’t qualify for PPP money because of their size, Jacobson said.
The $25 million previously allocated for hotels in Gov. JB Pritzker’s pandemic-related Back to Business grant program was appreciated but didn’t go far enough in addressing hotels’ needs, Jacobson said.
Hotels are still suffering financially because the pandemic caused conventions and other events to be canceled around the state for two years, he said. According to Jacobson, the hotel industry in Illinois and nationwide isn’t expected to return to pre-pandemic levels until 2025.
Hotels need cash flow to afford bricks-and-mortar improvements and higher salaries to attract workers in the competitive hospitality industry as consumer demand begins to rebound, Jacobson said. The Hotel Jobs Recovery Plan would help with those tasks, he said.
“No industry in Illinois has been hit as hard during the pandemic as the state’s hotels,” Jacobson said. “With most hotels owned by franchisees who live and work in the communities they serve, they cannot afford these sustained losses even as operating costs continue to grow due to inflation.”
Hotel industry officials don’t expect votes on the specific bills in the state House and Senate. Instead, they hope support for the legislation results in funding for the plan to be included in the legislature’s negotiations this spring to finalize the state’s fiscal 2023 budget.
The association says the state lost 40% of hotel jobs between 2019 and 2021, and the average hotel occupancy rate in 2021 was 47%.
Throughout the state’s hotel industry, there was a total loss of $5.4 billion in room revenue in 2020 and 2021 – including more than $1 billion that would have gone to state and local governments, according to the association.
State Rep. Kam Buckner, D-Chicago, said at a news conference March 8 on the legislative push for funding that hotels generate $4 billion a year in state and local taxes.
Hotels also account for more than 290,000 jobs, a majority of which are held by Black and Hispanic workers. Hotels generate $16 billion a year in wages and salaries, making the industry the largest private-sector employer in the state, Buckner said.
He said the proposed $250 million in financial assistance is “a measured, strategic response to help one of the state’s most important industries.
“There is no economic recovery in Chicago and Illinois and the Metro East and DuPage County if there is no recovery of this industry, so we all have to come together to find a way to arrive at a better place,” he said.
Darin Dame, general manager and co–owner of Springfield Suites by Marriott at 3921 S. MacArthur Blvd. in Springfield, said the recovery plan, which would generate $120,000 for the 80-room hotel, would help provide training and bonuses for his workers.
Springfield Suites, which opened in fall 2019, had 35 employees before the pandemic and got down to 12 at one point but now has 30 employees, he said.
Dame, who is also president of the Springfield Hotel and Lodging Association, said: “It is very difficult to understand just how challenging the last two years have been for our hotel, as well as for the hospitality industry as a whole in Springfield. Not only has the legislature been mostly remote for the last two years, limiting a key source of business, leisure travel and business travel have been majorly distressed.”
Several local hotels were forced to close temporarily and lay off workers, he said.
“As franchise owners, we have had to dig into our own pockets to make sure we met payroll, met our mortgage payments, and we’ve barely, barely kept our heads above water,” Dame said.
“While it will be impossible to make up for the losses over the last two years,” he said, “the support called for in this proposal will help bring some much-needed stability to our hotel and our industry. … Most importantly , it will help us weather the unknown.”
Dean Olsen is a senior staff writer with Illinois Times. He can be reached at dolsen@illinoistimes.com or 217-679-7810.
