Dallas City Wire

When Ashford Hospitality Trust (AHT) was struggling with a $4 billion debt and had to lay off 95% of its 7,000 staffers due to the COVID-19 shutdown, the hotel conglomerate went out of its way to support pandemic response efforts and to comfort former employees, Business Insider reported.

For starters, CBS News chronicled that AHT Chairman and CEO Monty Bennett cut his pay by 15%. Secondly, workers who were terminated received a week of severance pay for every year they had worked with one of Ashford’s 130 hotels. 

Finally, through various initiatives and partnerships with local government agencies, medical staffing organizations and hotel brands, 48 Ashford Trust hotels provided short-term accommodations to individuals who experienced the brunt of the coronavirus, including first responders, health care professionals and others, MarketScreener reported. For example, AHT Chief Financial Officer Deric S. Eubanks told shareholders during the First Quarter 2020 Earnings Call on May 21 that the Embassy Suites Times Square in Manhattan housed first responders when New York was a coronavirus hot spot.

AHT Chairman and CEO Monty Bennett | https://www.ahtreit.com/

“While the hotel is not profitable currently, we believe staying open and providing a place of refuge for these workers is the right thing to do,” Eubanks said at the time. “We continue to call on Congress, the Treasury Department and the Federal Reserve to assist the hotel industry during this crisis.”

After AHT received $58 million through the CARES Act Paycheck Protection Program, Bennett sprung into action when controversy ensued over compliance.

“While we believed then and continue to believe today that we qualify for PPP loans based on the legislation and rule-making in place at the time our applications were submitted, continuous SBA rule changes and evolving opinions by administration officials have led us to conclude that we may no longer qualify,” Bennett said in a company release on May 2. “As a result, the Ashford Group of Companies will return all PPP funds on or before May 7, 2020, in accordance with SBA's previously announced safe harbor.”

Bennett made a May 2 statement that the CARES Act was written to provide relief for hotels and restaurants, which employ more workers in more locations than an average small business.

“In fact, Congress designed the PPP to specifically allow companies that own multiple hotel properties to obtain separate loans for each property as a means to prevent the economic collapse of the hospitality industry that is now occurring,” he said. “This is why Congress wrote the CARES Act to waive the SBA’s standard affiliation rules for hotels and restaurants.”

Bennet remains confident of no wrongdoing from Ashford when applying CARES Act funds, even with the SEC currently investigating.

“Ashford applied for PPP loans for each qualified hotel property in full compliance with this guidance, and in the belief it was our obligation to protect our employees, vendors, communities, lenders and shareholders from unfair economic damage,” he said in the May statement. “Since we submitted our loan applications, the rules have changed almost daily. In fact, the SBA has issued numerous Interim Final Rules and at least 12 separate FAQs.”