New RI tourism COVID grants won’t help small hotels

By John Kostrzewa
 |  Special To The Journal

Hotel, tourism and arts officials have until Monday, Nov. 9 to apply for new state grants from a $20-million pool set up to curb the closing of businesses and nonprofits struggling from the coronavirus, and government restrictions meant to stop the spread.

But some say the $20 million is too little to seriously help Rhode Island’s multibillion-dollar travel and tourism industry.

Others say one part of the program that offers up to $1-million grants favors big hotels and leaves out smaller lodgings.

“It’s a start. Nothing’s perfect,” said Dale Venturini, president and CEO of the Rhode Island Hospitality Association. ”It’s the first time hotels will get a shot at getting some money.”

House Minority Leader Blake Filippi, R-Block Island, is critical of some of the grants available to larger hotels.

“There are few, if any, small business hotels that have 200 rooms,” he said, referring to one requirement. “The program is clearly a state bailout to large out-of-state corporate interests, not Rhode Islanders. This program should be expanded to all hotel owners, regardless of size.“

Evan Smith, president and CEO of Discover Newport, a nonprofit that promotes Newport and surrounding towns, said many potential grant applicants have questions that he hoped state officials would answer.

He added, “Travel and tourism is a multibillion-dollar industry. Thanks for the program, but $20 million doesn’t solve a billion-dollar problem.”

He also said if other sectors of the economy, such as manufacturing or health care, were suffering similar losses, the state would put down a lot more to solve the crisis.

Matt Sheaff, director of communications at the Rhode Island Commerce Corporation, said that as with all COVID-era programs, the state will explore additional support, especially if there is a new round of federal stimulus funding.

Rhode Island’s leisure and hospitality industry has been hard-hit since the outbreak of the virus in March, and after governments here and across the country imposed restrictions on travel, gatherings and business. 

Since the spring, a typical hotel in Rhode Island has lost 85 percent of its revenue, Farouk Rajab, chairman of the Rhode Island Hospitality Association, told The Providence Journal. He said half the hotels in Rhode Island will close by the middle of next year without “substantial” state and federal aid.

Thousands of workers have been affected.

Jobs in accommodation and food services are down 12,100 from peak employment of 53,000 in February, according to the Rhode Island Department of Labor and Training. Jobs in arts and entertainment are off 2,300 since the peak of 8,200 in February. 

In a statement, Randall Rosenbaum, executive director of the RI State Council for the Arts, said, “During the pandemic, the arts sector literally ground to a halt. Theaters and concert halls and museums were shuttered and artists and cultural workers lost their livelihoods.”

The $20-million competitive grant program is called HArT, because it’s targeted at hotels, arts and tourism organizations. The state funded the grants from the federal CARES Act stimulus money.

“The HArT relief program will not only help these businesses stay open, but also to find innovative ways to adapt to this crisis,” said Gov. Gina Raimondo, in a statement.

The $20 million is split into two pools of $10 million each. 

From one pool, up to $1 million in direct grants are available to hotels, arts, culture and tourism organizations. Hotels eligible for those grants must have more than 200 rooms and revenue loss from the second and third quarters of at least 70 percent. They also have to commit  to staying open at least through April 1.

From the other $10-million pool, called Engagement, Service and Resiliency (ESR) funds, grants of up to $350,000 are available to applicants that have had a 30-percent loss in revenue in the second and third quarter. The grants can be used for a variety of activities. They include hosting COVID-appropriate events, providing hotel vouchers or discounts to those who work or learn remotely, or enabling virtual events.

There are about 230 hotels in the state, including inns, boutiques and other lodgings.

The grants of up to $1 million have caused some confusion and criticism.

In a memo to tourism officials, Sheaff, the Commerce official, said that all hotels, regardless of room size, are eligible for up to $350,000 as part of the ESR grant program.

He said hotels with less than 200 rooms should also be applying for a different program, called Restore RI, that offers $30,000 grants. He said hotels with more than 200 rooms are not eligible for the Restore RI grants.

“It’s important to support these larger hotel venues (as well as our smaller hotels across the state) as they make up a key part of the hospitality industry, especially when meetings and conventions begin again,” Sheaff said.

Kristen Adamo, president and CEO of the Providence Warwick Convention and Visitors Bureau, said, “I have been impressed by how collaborative and open-minded Commerce has been in crafting the aid package. The one place where I would like to see them a little more lenient is in the eligibility of hotels for some of those support dollars. The current 200-room minimum for eligibility [for larger grants] exempts a lot of properties.”

Louise Bishop, president of the South County Tourism Bureau, said, “This grant will help some businesses, but the application window is one week, and funds must be spent by Dec. 30. Many have voiced that this will be a challenge.”

John Kostrzewa, a former assistant managing editor/business at The Providence Journal, can be reached at [email protected]

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