Omni Hotels Accepted Millions In PPP Funds But Didn't Pay Workers Critics accuse the luxury hotel chain owned by billionaire Robert B. Rowling of taking money that could have helped small businesses or other companies that might have used it to pay their workers.
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Omni Hotels Accepted Millions In PPP Funds But Didn't Pay Workers

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

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

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LEILA FADEL, HOST:

A lot of hotels closed their doors in the spring, and some still haven't reopened. These hotels were able to keep their workers on the payroll because of funding from the federal Paycheck Protection Program. But one national chain, Omni Hotels and Resorts, is under fire for laying off more than a thousand workers. They used the funds for other purposes. Bill O'Driscoll of member station WESA in Pittsburgh reports.

BILL O'DRISCOLL, BYLINE: One laid-off worker is Quilcia Moronta, a health club attendant at the Omni Providence in Rhode Island. She's worked there 21 years. Moronta, a single mother with two children, applied for unemployment and food stamps, then she heard what she thought was good news.

QUILCIA MORONTA: As I was struggling to provide for my family, I learned that the Omni had received some PPP money. I say, great; at least, you know, they're going to help us get by when it comes to basic needs.

O'DRISCOLL: The PPP is the Paycheck Protection Program. The half-trillion dollar initiative was part of the huge pandemic relief package Congress passed in March. The PPP offered loans that are forgivable if employers use 60% of the money for payroll-related expenses. PPP was designed as an alternative to unemployment, at least for the eight weeks of payroll benefits it supplied. The Omni Providence applied for a $2.6 million loan and said it would retain some 250 jobs. The loan was approved in April. But eight months later, with unemployment benefits run out and health coverage long gone, Moronta and the other laid-off workers are still waiting.

MORONTA: Right now, we are in December, and we haven't heard anything about Omni using that money to help pay employees.

O'DRISCOLL: Moronta belongs to the service workers union Unite Here with 300,000 members in North America. Using government data, Unite Here says Omni hotels received a total of $76 million in PPP loans. About a third of that went to hotels where the union represents workers. Carlos Aramayo is Unite Here's executive vice president.

CARLOS ARAMAYO: Here in Boston, I've spoken to hundreds of workers who work at the Omni Parker House, and I know none of them have received a single dime of this money. And looking at this winter, a lot of them could really use it.

O'DRISCOLL: So where did the money go? In a statement, the Omni chain, based in Dallas, said it didn't use the funds to pay workers because the hotels were closed or operating at low volumes. PPP rules allow a business to use the funds for payroll even if it were closed, but the Omni chose not to. Instead, the chain promised to repay the loans with interest, at least the part of the loans that are not forgiven. But these loans carry a below-market interest rate of just 1%, which angers Aramayo.

ARAMAYO: It's disgusting if companies want to try to use this as a way to get a low-interest loan from the federal government.

O'DRISCOLL: Critics say repaying the loans is beside the point. Lisa Gilbert is executive vice president of watchdog group Public Citizen.

LISA GILBERT: 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.

O'DRISCOLL: As for Omni's workers, many feel betrayed. Again, Quilcia Moronta.

MORONTA: Omni call us family. They always say that we are family. So where is the family treatment when it comes to the employees?

O'DRISCOLL: The Unite Here union has asked the Small Business Administration, which administers the PPP, and the U.S. Department of the Treasury to scrutinize the Omni loans. Whether they are forgiven remains undetermined, even as Congress approves a new round of pandemic relief.

For NPR News, I'm Bill O'Driscoll in Pittsburgh.

(SOUNDBITE OF OATMELLO'S "GOOD NIGHT (FEAT. LATE ERA)")

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