As City Eyes Recovery, Tourism Leaders, Elected Officials Blast Council Bill to Bilk Closed Hotels
NEW YORK, NY (10/05/2021) (readMedia)-- HANYC (the Hotel Association of NYC) and concerned New Yorkers testified today against the New York City Council's bill to require shuttered hotels to pay severance beyond the hundreds-of-millions in severance already paid out by the industry during the pandemic, explaining it will stall the city's recovery by forcing hotels to shut down permanently.
Vijay Dandapani, President & CEO of HANYC, warned that the legislation (Intro. 2397-2021-A) would place an extra burden on an industry struggling to get back on its feet that has been decimated by the economic effects of COVID-19.
"The hotel industry has been among the hardest-hit by COVID-19, shuttering hundreds of hotels, with many now on the verge of bankruptcy. The absolute worst thing that the City can do right now for tourism and our local economy is to force us to pay money we do not have, which will just force hotel owners to close up show and leave New York altogether," said Vijay Dandapani, President and CEO of the Hotel Association of New York City. "The hotel industry won't fully recover until 2025--until then, the City should be doing everything it can to help us, not hurt us."
More than 200 New York hotels have closed during the pandemic, leaving tens-of-thousands of New Yorkers out of work. Before the pandemic, the hotel industry employed more than 50,000 people who are mostly immigrants and people of color, raised $3.2 billion a year in City tax revenue, and added $22 billion annually to our economy.
According to a recent CBRE study, hotels may not fully recover until 2025. According to Smith Travel Research, the latest hotel occupancy rate for a 12-month period is at 48 percent, compared to 86 percent for the same period in 2019. Pre-COVID, hotels had a disproportionately large property tax burden compared to other properties. Now, with industry revenue down more than 65 percent, an additional severance to employees of partially closed hotels will only continue to delay their recovery, or permanently derail it.
"New York City's restaurants, nightlife and hotels share a symbiotic relationship, and the city's hospitality industry was the hardest hit by the pandemic. We lost hundreds of hotels, thousands of restaurants, and hundreds of thousands of jobs. Now, as the city reopens and hospitality tries to make a comeback, this bill requiring shuttered hotels to pay severance poses even more financial challenges to struggling hotels that have not received adequate help," said Andrew Rigie, Executive Director, NYC Hospitality Alliance.
"Tourism and hospitality are the heart of the city's economy and are in part responsible for Brooklyn's emergence as an economic force over the past two decades, and they were the hardest hit by COVID-19," said Randy Peers, Brooklyn Chamber of Commerce president and CEO. "Tourism is coming back slowly, and in the meantime, we need to help hotels reopen and support the good-paying jobs they provide to thousands of New Yorkers. This bill would bilk the industry and threaten the future of New York's tourism and larger recovery."
"The hotel industry across the country is reeling from the impact of COVID-19, and in New York City, that devastation is even more severe," Asian American Hotel Owners Association President & CEO Ken Greene said. "Lawmakers should be helping hotels get back on their feet, not making it harder by forcing them to pay more severance than they already have. This bill will severely hurt New York hotels."
Full testimony below:
To Mayor de Blasio:
Hello. My name is Vijay Dandapani, and I am President & CEO of the Hotel Association of NYC.
COVID-19 devastated the hotel industry in New York City. According to Smith Travel Research, the latest hotel occupancy for a running 12-month period is at 48 percent, compared to 86 percent for the same period in 2019. More significantly revenues are down 65% for the same period. Close to 200 hotels closed during the pandemic, and many of those hotels have yet to fully reopen. Hotels are closed not because they don't want to reopen but only because there aren't enough visitors whether for tourism or business.
Now, just as every sector in the city is reopening and getting back on its feet, the City is planning to implement a bill that would place a significant burden on the hotel industry--and would at best delay the recovery of our tourism industry, and at worst derail it entirely.
As you know, tourism is historically a crucial economic generator for the City, and hotels are a significant component of that having contributed over $3 billion in taxes pre-COVID. Pre-COVID-19, hotels provided over 50,000 jobs to the City. But hotels saw scant relief from the City, State, or federal governments. Now is the time to help the hotel industry, not hurt it. The City must support hotels so that hotels can survive the impact of COVID, continue providing thousands of good-paying jobs to New Yorkers, and making our local tourism industry possible. If this legislation is implemented, it would have a detrimental impact on hotels' ability to reopen, which in turn would do tremendous damage to the city's overall economy affecting thousands of full-time hotel workers in New York and impacting the livelihood of so many families. According to a recent study by CBRE, the hotel industry won't recover to pre-pandemic levels until 2025.
Allowing hotels to reopen to full capacity as business returns instead of doing so forcibly will mean getting tens of thousands of New Yorkers back to work.
Thank you for your time today.