Report: Two-thirds of New Hampshire hotels at risk of shutting down
State lodging association questions findings, but sees ‘great deal of risk’ that some won’t remain open
A recently released national report’s prediction that two-thirds of New Hampshire’s hotels will shut down if they don’t get more federal aid seems “really high,” but that doesn’t mean that the state’s lodging industry isn’t in big trouble, said Mike Somers, president of the New Hampshire Lodging and Restaurant Association.
“Let‘s be real clear: There is a great deal of risk that some hotels won’t be able to stay open. A lot of properties are heavily leveraged, and the aid could make be the difference of some of the making it and some of them not,” Somers said.
The report from the American Hotel and Lodging Association (not affiliated with the NHLRA) estimates that 233 of the state’s 348 hotels will shut down if Congress doesn’t pass another stimulus package that would include such support as the Paycheck Protection Program, which ended in early August.
The national organization also estimates that 171 of the hotels – roughly half – will face foreclosure.
That’s the same proportion nationally: Two-thirds of the 57,000 hotels will close and half will face foreclosure, said the report, which also predicts massive job losses. In New Hampshire, the report said that 38% of the state’s 8,791 hotel jobs were lost by September. And it predicted that 70% will be gone without some federal assistance.
According to the most recent report by the New Hampshire Department of Employment Security, the accommodations sector is among the hardest-hit of the economy, with as much as 58% its workforce jobless at the peak of the pandemic and 16% still unemployed as of Sept. 12.
Hotels have been able to be at 100% percent capacity since early summer. State restrictions mainly limit lobby traffic, said Somers. So the major limiting factor has been demand, “which has been soft this year, but many folks have done OK.”
Particularly hit hard have been facilities that depend on functions like wedding and corporate meetings, he said, and he expected greater difficulty during the winter months.
The same goes for restaurants he said, even with eased restrictions that allow for closer tables if they are separated by some sort of a barrier.
The White House and Democratic leaders in the U.S. House are apparently still negotiating an aid package that might contain more PPP funding. But businesses can still apply for assistance though the Emergency Injury Disaster Loan program, which offers low-interest long-term loans to businesses. So far, 11,000 New Hampshire businesses have received $658 million through those loans as of Sept 24.
Somers also said he hopes the state might deploy some of the more than $200 million it has remaining from the $1.25 billion it received in CARES Act funding earlier this year to further assist small businesses, though it is competing with schools and hospitals and other sectors for those funds.
“Down the road that money will be definitely needed, by any estimate,” Somers said.