The cacophony of noise around the 2020 presidential election and the continued impacts of the economic recession make it next to impossible to focus on normal election-year issues, such as tax policy.
Each quarter, Hotel News Now takes a moment to talk to Wall Street analysts about their expectations for publicly traded hotel companies before the earnings season. And while reporting that story for the third quarter, something an analyst told me has stuck in my brain and I’m trying to fully digest it.
Speaking to me last week, Rich Hightower, managing director and lodging research analyst at Evercore ISI, mentioned the implication of the election and how they’re not particularly high on the list of priorities for investors right now.
“Maybe (tax policy is) not all that impactful, right now, but it’s something we’d normally care about,” he said.
So that leaves me wondering: How far reaching and deep are the implications of this election on the hotel industry, and indeed more broadly on commercial real estate, that we simply don’t have the bandwidth to conceptualize at the moment?
I think the most obvious consequence, and the one that Hightower was specifically referring to, is the possibility of President Donald Trump losing the election to former Vice President Joe Biden along with the Democrats picking up majorities in both houses of Congress and quickly repealing the corporate tax cuts given out earlier in the current administration.
To the original point being made, these are obviously important changes that will have demonstrable impacts on businesses, but those impacts are orders of magnitude smaller than what has been felt due to the COVID-19 pandemic and its associated downturn. And it’s likely one of the top things hoteliers are thinking about in terms of the election is how each party’s candidates will approach a potential aid package for the industry.
There are a host of other things that could change as the party in power shifts. The tone and approach of bodies such as the National Labor Relations Board will obviously be expected to change swiftly.
The NLRB has been an important body in terms of how the hotel industry does business because of their rulings on joint-employer status.
Indeed, there are more and more implications hoteliers can and should think about in terms of this election, but ultimately it gets drowned out by the headline issues of the day, most importantly the implications from the pandemic.
Don’t get me wrong, though, thinking first and foremost about the pandemic, the governmental response to it and potential industry stimulus to cope with the ongoing economic crisis is a completely reasonable attitude for any hoteliers to have. And as owners and operators are attempting to build 2021 budgets, which way the election goes is probably just one of seemingly infinite uncertainties that make forward-looking projections next to impossible for the time being.
But investors and operators likely have never moved into a new presidential term, whether that be with the incumbent or the challenger, with more currently unanswerable questions than they will this time around.
All we can hope for is a little more clarity in 2021 than we got in 2020.
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