WASHINGTON, D.C.—In the shadow of Capitol Hill, top hotel executives provided their take on health-care reform during the American Hotel & Lodging Association’s Legislative Action Summit on Monday.
Chris Nassetta, president and CEO of Hilton Worldwide, said the House of Representatives’ version of health-care reform could add US$100 million in costs to the hotel industry. The Senate’s version, meanwhile, could add US$50 million.
Adding those costs to already struggling hotels will further damage the industry, he said during the “CEO Panel: An Insider’s View of Capitol Hill.”
|From left, Steve Joyce, David Kong, Chris Nassetta, and Jim Abrahamson listen to Rep. Jon Porter (R-Nevada) during the CEOs Panel at the American Hotel & Lodging Association’s Legislative Action Summit.
“The thing that needs to be done is trying to effect reform on health care, not health insurance,” which would reduce costs, he said. “Unfortunately, we’re not trying to do that. I think it will cost jobs.”
He added, “The vast majority of our people are telling us that this is not what we want. They are telling us they want to attack the cost side of it.”
Rep. Jon Porter (R-Nevada), the moderator of the panel, said President Obama’s administration has changed its tactics in trying to rally support for health-care changes.
“What started out as health-care reform has turned into insurance reform because that’s much more palatable to the American people to bash big business,” he said.
An important week
The hotel leaders are discussing health care during a crucial week in the nation’s capital. President Obama has ordered Congress to pass a health-care reform measure this week. He temporarily delayed a planned trip through Australia, Guam and Indonesia this week and instead will stay in the capital to help push the act through.
Jim Abrahamson, president of the Americas for InterContinental Hotels Group, fears Congress could be moving too quickly.
“All I was hearing on the Sunday talk shows was, ‘We have to hurry up and pass it so we know what’s in it,’” he said. “That’s troubling.”
president of the Americas
InterContinental Hotels Group
Abrahamson believes Congress will pass some version of health-care reform. As of Monday, Porter said there weren’t yet enough votes in Congress to pass any changes to the health-care system
For the AH&LA, 80 percent of members have health-care coverage and Abrahamson said reform is not needed—for the hotel industry at least.
“This could be tremendously damaging for small businesses and businesses with seasonal employees,” he said.
Passage of the current bills could have dire consequences for the larger economy as well, said Steve Joyce, president and CEO of Choice Hotels International.
“You want to see a double dip?” he asked. “Watch this legislation pass—you’ve got your double dip.”
Abrahamson does not like the current pieces of legislation in the House and Senate for several reasons, he said. There is nothing in the bills to reduce costs overall and the cost of administering the new system could be high, he said.
“And non-compliance could result in an onerous penalty,” he said.
It’s not that hotels don’t want to provide health care, said David Kong, president and CEO of Best Western International. But hoteliers would prefer to keep costs down.
Nassetta said he would prefer seeing a measure that would improve efficiency and remove fraud from the current system. “That will bring down cost,” he said.
Employee Free Choice Act update
Also during the discussion, the executives provided an update as to where the Employee Free Choice Act stands.
The act would make it easier for workers to form unions by enabling a union to form once a majority of workers sign cards of authorization, thus bypassing secret-ballot organizing. The measure also would impose mandatory arbitration for first-contract disputes and increase the penalties on companies that violate workers’ rights.
“For most people,” Porter said, “it’s anything but a free choice.”
president and CEO
Best Western International
Though the act has languished in Congress and is not close to becoming law, the hotel executives said unions could still try to enact the measure by attaching it to another piece of legislation, or administratively through the National Labor Relations Board if board members are appointed who favor what’s contained within the act.
Still, the executives urged vigilance on the part of AH&LA members.
“Just because it’s not front and center doesn’t mean it won’t go through,” Joyce said.
Travel Promotion Act
Finally, the executives expressed their happiness over the recently passed Travel Promotion Act.
The act calls for the establishment of a US$10 fee paid once every two years by international visitors. The fee would go to fund a marketing campaign meant to spark foreign travel to the U.S. It could raise as much as US$100 million a year for the marketing campaign, with matching contributions from the travel industry raising another US$100 million.
The act will provide a big benefit to the hotel industry because it will help promote hotels in all regions of the U.S., not just on the coasts, the executives said.
“This is a game-changer,” Abrahamson said.
Still, the U.S. can do more to attract foreign visitors, Joyce said.
“We see every day, entry into other countries is much easier than entry into the U.S.,” he said.