Lodging businesses hardest-hit in pandemic
Of the many business sectors that reported COVID-19 losses to the state this summer as part of grant applications, lodging stands out.
Average monthly losses during the height of the pandemic, which were used to calculate the emergency economic recovery grants, were reported at 96.6% for lodging businesses, state officials said in an Aug. 17 report to the Legislature.
Food service businesses reported average monthly losses of nearly 87% in applications to the grants program.
Because lodging and restaurants are still required to limit capacity in order to reduce the risk of COVID-19 infection, “we will all need to continue to support these sectors as they will continue to experience loss in the months ahead,” said Lindsay Kurrle, secretary of the Agency of Commerce and Community Development, and Craig Bolio, the state tax commissioner. The two agencies administer the grant program, which opened July 6.
The Aug. 17 report on the business grants program is one of the first reports to show how the COVID-related shutdowns have affected individual sectors of the Vermont economy. The report lists average monthly losses for several sectors, including transportation (91%), arts, entertainment and recreation (89%), education (86%), retail (83%) and construction (82%).
Hotels and other lodging were closed altogether to short-term stays soon after Gov. Phil Scott declared a state of emergency on March 13. Although the state started opening up the lodging sector at the end of May, lodging business owners and managers said the rules were so restrictive that it was practically impossible for them to make money. Lodging is still limited to 50% of capacity. Restaurants are limited to 50% capacity for indoor dining.
“We trust the governor on this, and the state, but it would be nice in time if we could get back to normal,” said Christopher Scott, the general manager of the Green Mountain Suites hotel in South Burlington.
“April and May were just dreadful,” he added. “We sold 10 rooms a night in April and less in May.”
The $150 million economic recovery grants program was launched July 6 with the expectation that the money would run out quickly. But several weeks later, there is still $60 million available, and on Aug. 19 the state announced it would allow businesses to apply for an additional $100,000, increasing the maximum award amount from $50,000 to $150,000. Grants are based on 10% of 2019 annual revenues. To be eligible, businesses must have lost at least 50% in a month in the period of March through July, compared to the same month the year before.
Christopher Scott said he expected that Green Mountain Suites would be applying for more.
The ACCD said more than $90 million has been awarded to more than 3,500 businesses in 22 sectors and all 14 counties in Vermont so far through the program.
The report to the Legislature shows that 654 businesses in Chittenden County, the state’s most populous county, consumed by far the largest share of the program, winning more than $16 million in grants. Chittenden County has one-third of the state’s jobs, according to the report.
Washington County consumed the next-largest share, with 269 applications that brought in $6.3 million in grants.
The report details what type of businesses won grants, and how many employees were affected. ACCD and the Tax Department have also published detailed lists of recipients.
The money for the business recovery grants comes from Vermont’s $1.25 billion share of the CARES Act emergency relief bill that Congress passed in March as businesses around the country were closed to mitigate the impact of the COVID-19 virus. Lawmakers hastily designed the grants program in the spring and early summer. They divided administration of the program between the Tax Department, which is handling applications from businesses that pay sales and use tax and rooms and meals tax, and ACCD, which is handling all other applications.
Green Mountain Suites is an all-suite hotel, with 104 suites that often serve as the long-term home of traveling health care workers. Christopher Scott said the hotel has had guests in residence for as long as three years. That type of long-term visitor was excluded from the state’s early lodging restrictions, which discouraged visitors from out of state unless they quarantined for two weeks.
But the long-term residents moved out anyway during the early months of the pandemic, Christopher Scott said.
“A lot of them just basically went home,” he said.
In normal years, spring and summer are the high season for most Vermont lodging businesses, and Christopher Scott said it’s not unusual for the hotel to have 90% occupancy in August, or even to be full. Now, thanks to the return of long-term guests, the hotel is allowed to have an occupancy level that’s higher than 50%. The hotel is about two-thirds full now, with about half of its usual staff of 35 to 45 workers.
Christopher Scott said he wasn’t sure how long the hotel, which also received a PPP loan, can survive under these conditions.
“We’ll probably lose millions this year,” he said. He doesn’t fault the state’s handling of the virus.
“It’s really not up to anybody,” he said. “It’s up to the virus at this point.”
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