Politico: Ad campaign calls for more city support for hotel industry
By Janaki Chadha
January 19, 2021
A hotel industry group is launching an ad campaign calling on city officials to better support the struggling sector.
Details: The Hotel Association of New York City is seeking to highlight the industry’s substantial economic impact on the city, and to urge officials to give owners more flexibility in paying real estate taxes — specifically, asking that the city not charge interest on tax debt. The group says it is willing to spend seven figures on the campaign, which will include digital, television, radio and direct mail ads over the coming weeks, aimed at City Hall and the City Council.
One of the digital ads reads: “50,000 New Yorkers rely on hotels for work — but hotels can’t stay open without help. Tell City Hall: Save hotels to save jobs.”
“Hotels and the tourism industry add $22B to our economy a year,” another ad reads. “Tell City Hall: Keep hotels open to keep NYC afloat.”
At least a quarter of the city’s roughly 700 hotels have closed since March, temporarily if not permanently, according to a recent report from the hotel association. Many are expected to go out of business completely. About 200 hotels have been occupied through government contracts for rooms for the homeless or first responders, but those arrangements are temporary.
“We are sitting almost 12 months into the pandemic and occupancy is barely there,” said Vijay Dandapani, president and CEO of the association.
Property taxes have been one of the biggest issues, and forgiving interest payments would be an incentive for some hotels to remain open instead of shuttering permanently — in which case the city would get no tax revenue from them anyway, Dandapani said. The city typically charges 18 percent interest on late payments, and hotels are still being taxed based on their pre-Covid assessed value, he noted.
“We need a bigger correction, and that obviously means the city is going to get less revenue from these hotels, but it’s a phantom revenue that’s being collected,” he said.
Key context: Hotel owners, and the workforce they support, are struggling with the steep loss in business, with no end in sight.
“It’s been a disaster. When this happened in March we all thought it’d last for two months, three months, and we’d be open again,” said John Fitzpatrick, the owner of two hotels in Manhattan. “The cost of just keeping a hotel when it’s closed, it’s in the hundreds of thousands [of dollars] a month.”
Fitzpatrick has just 20 people on staff, down from 160 employees before the pandemic hit, and said paying his property tax bill is one of his biggest concerns.
Bilal Yayla, a bartender at one of Fitzpatrick’s hotels, is back at his job after being laid off for a few months in the spring, but his income — reliant on tips — has dropped significantly. He has worked in the hotel industry for nearly two decades, and says he worries every day coming to work that he will lose his job for good.
“I have no other experience to go to something else, which has meant that if the restaurant and hospitality business suffers, I suffer because I have nothing else to do,” he said. “What are my chances for getting another job?”
What’s next: The campaign will kick off with a wave of digital ads on Tuesday. Ads on local television and radio stations will come out later this month, and direct mail will come after that.
City Hall and the Council did not immediately return a request for comment on the campaign.