Omni Hotels Accepted Millions In PPP Funds But Didn't Pay Workers

https://www.npr.org/2020/12/29/950902403/omni-hotels-accepted-millions-in-ppp-funds-but-didnt-pay-workers

December 29, 20205:07 AM ET
Heard on Morning Edition
Bill O'Driscoll


Omni Hotels & Resorts, the international luxury hotel chain owned by billionaire Robert B. Rowling, is being accused of misusing millions of dollars in federal pandemic relief funds meant to keep workers on payroll.

The Omni William Penn Hotel in Pittsburgh is one of a number of hotels in the Omni Hotels & Resorts chain that accepted federal Paycheck Protection Program funds but did not use them to pay workers.
Bill O'Driscoll/WESA

Unite Here, a service workers union with more than 300,000 members in North America, said several Omni hotels where it represents workers took Paycheck Protection Program loans but never paid hundreds of workers.

Unite Here said 32 Omni hotels received about $76 million in loans from the program, known as PPP. About $23 million of that went to seven hotels, in cities including Chicago, Boston, Washington, D.C., and San Francisco, where the union represents more than 1,000 housekeepers, servers and other service workers.

In its application to the Small Business Administration, the Omni Providence Hotel in Rhode Island asked for a $2.6 million PPP loan, promising to retain 246 jobs.

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PPP rules do permit a business to use funds for payroll even if it is closed. But the Omni elected not to do that. Instead, the chain said in its statement, "any amount of the PPP loans that are not forgiven will be returned or repaid with interest per program terms."

Critics say whether the hotels pay back the loans is beside the point. They note, for instance, that the interest rate on PPP loans is just 1% — well below market rate.

"It's disgusting if companies want to use this as a way to get a low-interest loan from the federal government," says Unite Here's Aramayo. "It's really not fair for a company to take money that was intended to help out their own workforce and use it for some other purpose."

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"I do think about other businesses that maybe didn't get money because Omni did, either truly small businesses that were struggling or another company that might have used it to actually pay their workers," said Lisa Gilbert, executive vice president of the consumer advocacy group Public Citizen. "It doesn't seem like a great investment of taxpayer dollars, even if they pay back the money at the end of the day."

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