Support for Assistance with the Financial Crisis

On behalf of the 10,000 members of the Asian American Hotel Owners Association (AAHOA), who own 20,000 hotels across the United States, we strongly request assistance with the financial crisis.

Issue:  AAHOA Members Continue To Experience Great Difficulty Obtaining Financing

Policy Implications

  • Small businesses account for approximately 70% of jobs in the United States.  Yet, their ability to hire new workers is hindered by the difficulty to get loans.  This is definitely true for the lodging industry and hotel owners. 
  • Hotel owners have faced significant downturns in their businesses in the past two years.  When the recession hit, many people stopped traveling.  Companies decreased their business travel and many families either cancelled their vacation plans or stayed with relatives and friends.  It has been reported that the lodging industry was hit harder than other small businesses, including restaurants and retail shops.  In the last two (2) years, the industry hit 75-year lows in guest occupancy rates, ADR (average daily room rates) and RevPar (revenues per room).
  • In addition to the significant slowdown in business activities, hoteliers are unable to get financing to keep their operations running and their doors open.
  • U.S. Congressman and Financial Services Committee Chairman Spencer Bachus (R-AL) reports that, “[R]egional and small banks are being smothered by the 400 new Federal regulations mandated by the Dodd-Frank Act.  These additional burdens being placed on financial institutions make it very difficult for them to extend the credit essential to create jobs and jumpstart our economy.”
  • Credit Access Study (2011).  The International Franchise Association (IFA) surveyed 370 members in March 2011 about how the credit crisis is impacting their plans to grow their businesses.  The results are significant:
    • Thirty-nine percent (39%) of franchisors report that more than 50% of their franchisees and franchise prospects are unable to obtain needed financing.  This is compared to 33% in the November survey.  Only 5% report their franchisees and prospects have had no difficulty with credit access, compared to 8% in the November survey.”  Forty-one (41%) report that credit access has a significant impact on their business.
    • Sixty-four percent (64%) of franchisees and sixty percent (60%) of franchisors report no improvement in credit access.  Only 3% report they have seen a significant improvement in credit access. 
    • Franchisors report they are still facing challenges with credit access.  Forty-six percent (46%) report a significant impact on their ability to expand, compared to 42% in the November survey.

Equitable Policy and Solutions

AAHOA supports immediate access to financing as a top priority for hoteliers and small business owners. With financing, they can continue to operate their businesses, pay their bills, provide excellent services to the traveling public, keep their current employees, hire new workers , grow their businesses, care for their families, support the local community and strengthen the economy.