Luxury hotel owner is biggest beneficiary of coronavirus small business program with nearly $60M in aid
Ashford Inc. and its subsidiaries have secured nearly $60M in aid through the Paycheck Protection Program
Heritage Foundation president Kay C. James calls for additional Paycheck Protection Program funding for small businesses struggling during the coronavirus pandemic.
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Three publicly traded companies overseen by luxury hotelier Monty Bennett are poised to receive nearly $59 million in government-backed loans intended to help small businesses — making it the top recipient nationwide of coronavirus relief aid.
Ashford Inc., an asset management firm based in Dallas, does extensive business in the hotel industry through a pair of two real estate investment trusts: Ashford Hospitality Trust and Braemar Hotels & Resorts. Combined, they own more than 100 properties, including the Ritz-Carlton Lake Tahoe and a Marriott in Beverly Hills.
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In public regulatory filings, the companies reported they had received millions in aid through the Paycheck Protection Program, which was established in the $2.2 trillion stimulus package passed last month. Although the program ran out of the initial $349 billion of funding on April 16 after just two weeks of solvency — leaving small business owners throughout the country without a lifeline — Congress is set to inject another $310 billion into it.
Ashford Hospitality’s affiliated hotels had received $29 million of the $31.1 million requested as of mid-April, according to its regulatory filing. In total, 42 properties throughout the country received the aid, with the biggest sums going toward the Ritz Carlton Atlanta ($3.4 million), a Renaissance in Nashville ($3.7 million) and a Hilton in Costa Mesa ($2.2 million).
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Braemar Hotels & Resorts had secured $10.6 million of the $15.8 million it was hoping for as of its April 15 financial filing, with the money spread across its subsidiary properties.
Then, in a regularly filing Wednesday, subsidiaries of Ashford Inc. reported receiving six government-backed loans totaling $12.8 million.
Bennett donated more than $200,000 to the Trump re-election campaign, the Republican National Committee and a joint fundraising committee supporting both of them last year, according to Federal Election Commission records.
In mid-March, the hotelier told CBS News that he had been forced to cut 95 percent of his 7,000 employees as a result of the virus outbreak, which has paralyzed the U.S. economy. Bennett said he cut his own pay and the pay of his executives by 15 percent.
Its stock has lost roughly 76 percent of its value since February, and closed Thursday at $0.63 per share. That’s down from about $5.42 in May of last year.
“My industry and our businesses are completely crushed,” Bennett wrote in an open letter dated March 22. “This pandemic’s economic impact on the hotel industry is worse than all of the previous calamities combined.”
Ashford Inc. did not respond to a request for comment.
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There’s growing concern that large, publicly traded companies will continue to siphon away the fast-dwindling cash during the program’s second round of forgivable loans.
Several other major companies like Potbelly, Ruth’s Chris Steak House and Shake Shack received multimillion-dollar loans, prompting bipartisan outrage as small business owners struggled to access the aid. Shake Shack and Ruth’s Chris have since canceled their loans.
The Treasury Department issued new guidance on Thursday tightening the rules for which companies qualified for the loans, saying it was “unlikely” that a public company with a substantial market valuation and access to capital markets “will be able to make the required certification in good faith.” If those companies return the loan by May 7, it “will be deemed by SBA to have made the required certification in good faith” — otherwise they risk an investigation.
“If they pay the money back quickly, there will be no liability to Treasury and the SBA. If they don’t, they could be subject to investigation,” Treasury Secretary Steven Mnuchin told FOX Business this week.
Bennett seemed to preempt some criticism of Ashford Inc. and its subsidiaries securing the small-business loan in his March 22 letter.
“Some politicians are too concerned whether proposed government programs help small businesses rather than ‘big business,’ or individuals instead of ‘corporations.’ They seem terrified they’ll be accused of ‘bailing out’ an industry or certain companies,” he wrote.
“Is it preferable for a large business like Marriott to lay off hundreds of thousands of workers so we can say we helped only small businesses? Is it smart to let an industry icon like Hilton go bankrupt as long as we help a corner hotel?”