Vaccinations, Direct Financial Assistance to Individuals Could Spur Demand
The passage and expected signing into law of the American Rescue Plan Act of 2021 gives hoteliers reason to celebrate, not just because of the additional funding of Paycheck Protection Program loans, grants and other federal aid available to hotel companies, but because of what it will do for their guests, too.
For all types of guests, the increased funding for COVID-19 testing, contact tracing and vaccine distribution should move along the pace of the recovery as more people are protected from the coronavirus. The faster the country can vaccinate enough people against COVID-19 and get the pandemic under control, the sooner people will feel safe traveling again.
From a corporate and large group guest perspective, many of the programs, grants and other types of federal aid available to hotel companies will be available to other businesses as well, helping them stay afloat through the recovery, enabling them retain employees and eventually get back on the road again, attending conferences and meetings. Again, because of the vaccination efforts, company executives will feel more comfortable that they can safely send employees out on work trips again.
For leisure guests, though, this bill could do a lot. The relief bill provides for direct payments of up to $1,400 to individuals, provided they are under a set annual income cap. It also includes an increased child tax credit, some of which will start being paid out to parents directly in July and each month through the end of the year. The bill also funds $300 a week in federal unemployment benefits through September.
What all that means is money in the pockets of the general public. Though this funding is far from all the aid many will need, it’s at least temporary financial assistance to help people keep their heads above water financially. This will hopefully put them in a position, down the line, where their household budgets are solid and they can plan a family vacation to celebrate.
Others who receive direct payments haven’t been experiencing financial distress, which means this federal aid is extra money. Many people still traveled last summer despite the pandemic. Now that we have vaccinations underway, I would guess a significant number of those who are more financially stable will take a trip or two this summer.
A full recovery is still a long way off, but the federal aid to businesses and individuals is going to help keep people on track, benefiting hoteliers on multiple fronts.