When the public spotlight finds Monty Bennett, it leaves scorch marks.
The hotel magnate was cast as a face of corporate greed in the COVID-19 era after applying in April for $126 million in forgivable loans from the government’s Paycheck Protection Program, which was designed as a way for struggling businesses to pay employees during the pandemic. Small-business owners saw PPP as a lifeline for them, not publicly traded companies.
The at least $69 million that Bennett’s companies got was the largest payout in the country. And his generous political contributions to another hotelier, President Donald Trump, immediately came under scrutiny — especially a $50,000 donation to the Trump Victory Committee in March.
Nearly overnight, people fearful of the economic freight train running through the country chose Bennett as their punching bag. Social media was filled with snarky attacks about his wealth and the luxury hotels filling his portfolio. The agency in charge of PPP moved quickly to change the rules for who qualified, forcing him to return the money in May.
It wasn’t his first public showdown.
In 2014, he took on a fight with the Tarrant Regional Water District to protect his three-generations-old, 1,500-acre East Texas ranch from a pipeline. He brought endangered animals onto his land and plotted a new cemetery where the water line was to go and, in the end, won the dispute with an out-of-court settlement that diverted the pipeline around his property.
Little did he know that would amount to a practice run for his moment on the national stage.
Monty’s side of the story
Absent from much of the PPP criticism was that hoteliers were allowed to apply for loans for each of their locations and 75% of the $69 million that would have gone to Bennett’s companies was intended to keep employees working, according to U.S. Small Business Administration rules for who received PPP funds.
In Bennett’s case, the loans would have helped the 13,000 employees at his companies and their more than 130 hotels around the U.S. and the Caribbean. The money was awarded to Braemar Hotels & Resorts Inc., which owns some luxury properties in the Caribbean; Ashford Hospitality Trust Inc., which owns more than 100 hotels around the U.S.; and his Dallas-based firm, Ashford Inc., which manages both.
“What they did may not have been illegal, but the question is if it was in the spirit of the program,” said Philip Mattera, research director of Good Jobs First, an organization that’s tracking how coronavirus relief money is being spent. “The whole program was sold as something to help small businesses, from the small corner grocer to the neighborhood coffee shop.”
Asked to reflect on becoming a lightning rod, Bennett blamed the news media. He’s also critical of how SBA rewrote the rules after controversy engulfed it.
“The backlash occurred because the media reported outright falsehoods or implied wrongdoing,” said Bennett, who agreed to answer questions from The Dallas Morning News only by email. “So my employees suffered, and this is why so many people hate the media.”
Last year, his three companies had combined revenue of nearly $2.3 billion. But no hotel was spared from the financial strain that the pandemic caused when it shut down business and leisure travel, as well as conferences and events. Overall, U.S. hotel revenue dropped about 83% year-over-year in April, according to research firm STR.
Bennett’s two real estate investment trusts both laid off 90% of their property-level staff. April went down as the worst month on record for the U.S. leisure and hospitality industry, with a loss of 7.7 million jobs — or nearly half of all positions, according to the U.S. Bureau of Labor Statistics.
“It was devastating,” Bennett said. “It still is. To have to lay off over 90% of my workforce, many of whom are friends and who I’ve worked with for decades … absolutely devastating.”
The leisure and hospitality industry added 2.1 million jobs in June, but the path to recovery is hazy and may be dependent on a vaccine. “Partially, but not fully” is how Bennett describes the hotel industry’s recovery chances without a vaccine.
A family business
The roots of what today is Bennett’s collection of high-end hotels go back to 1968, when his father, Archie, started buying troubled properties. It wasn’t an overnight success story.
After Bennett graduated in 1989 with a bachelor’s degree from Cornell University’s School of Hotel Administration, he and his father were close to being broke, he wrote in a blog post on Medium. His father had just survived an ’80s oil bust-related bankruptcy, and Bennett was a fresh-faced college grad.
Over the next 30 years, Bennett took the family business public and expanded it from six hotels to more than 130, including franchised locations flying some of the industry’s biggest flags: Marriott, Hilton, Courtyard, Embassy Suites, Hyatt, Ritz-Carlton and Residence Inn.
“He’s well-respected in the industry,” said Tyler Batory, director of travel, lodging and leisure at investment firm Janney Montgomery Scott. “His family has been in the business for a long time and started with bare bones and built it up.”
Bennett’s Braemar investment trust operates 13 resort properties in six states and the U.S. Virgin Islands, including Ritz-Carlton in St. Thomas, which reopened in December after undergoing a $100 million-plus renovation following hurricanes Irma and Maria in 2017.
Ashford Hospitality Trust, also founded by Bennett, has 117 properties, including two Atlanta showcase hotels: the W, which it bought for $56.8 million in 2015, and the Ritz-Carlton.
It also owns 13 properties in Texas, including The Ashton in Fort Worth, which holds a coveted spot on the Historic Hotels of America roster, and the four-diamond, 168-room Lakeway Resort and Spa overlooking Lake Travis near downtown Austin.
It’s natural for the trust to have a concentration of hotels in Texas.
Bennett, 55, grew up in Houston and was the only one of seven children to follow his father into the hospitality industry. Now he has four children of his own — two sons from a previous marriage and two stepsons. Today, he typically lives in Dallas with his wife, Sarah. But for the past few months, he’s been working from the office at his ranch in Athens, an hour southeast of Dallas, the city where he’s lived over 30 years.
The ranch is the same pristine getaway he fought so tenaciously to protect from the pipeline. The tussle began in 2010 when the Tarrant Regional Water District wanted to survey his ranch. With the help of a local legislator, Bennett created the Lazy W Conservation District, a governmental agency that also had the right to take land away. To further his cause, he built a private cemetery on his ranch in the path of the pipeline and added endangered species to his exotic animal collection, hoping that the federal government would protect them.
His methods may seem extreme to some. But not to Bennett.
“In every case, when people hear all the facts, not one is critical at all,” he said.
A tsunami of criticism
Right before Ashford and the trusts applied for PPP assistance, politicians already seemed sensitive to any appearance of government rushing to aid big corporations over small businesses, Bennett wrote in a March 22 blog post on Medium.
“Is it preferable for a large business like Marriott to lay off hundreds of thousands of workers so we can say we helped only small businesses?” Bennett wrote. “Is it smart to let an industry icon like Hilton go bankrupt as long as we help a corner hotel?”
Despite his lobbying, Bennett said he had no clue his companies would lead the pack in loan approvals. And he definitely wasn’t expecting the blowback.
“There was no way to know this ... I didn’t think there would be any backlash because we applied for a program that was specifically meant for companies like ours,” he said.
On April 22, as big public companies like AutoNation and Ruth’s Chris began reporting the millions they collected in PPP loans, the reaction to the Ashford companies’ regulatory disclosures was swift and brutal, with lots of inbound hate mail, Bennett said June 17 on a hotel industry webinar. Many accused him of finding a loophole or taking loans away from mom-and-pop stores shut out of a process that ran out of money in just 13 days.
“After we applied, received the money, and the program ran out of money, then the perception was that Ashford deprived smaller, rightful recipients of PPP funds of their just share,” Bennett said. “This was also false.”
Further clouding the perception was Ashford Inc.‘s $2 million dividend payment to Bennett and his father on preferred shares they hold, while halting payments on most of its $4 billion in debt.
Bennett defended the payout. He doesn’t own preferred shares in the two REITs, but those dividends were paid in full. Ashford Inc.’s preferred shares, owned predominantly by Bennett and his family, paid out at only 50%. Dividends for common shares of the two REITs, of which Bennett owns many, were cut fully.
“We wanted to take care of all of our other investors, but since my family and I own the vast majority of preferred stock at Ashford Inc., we were able to cut dividends there without upsetting all of the other investors,” he said.
Bennett said he’s now taking his salary in Ashford Inc. common stock. Regulatory filings show Ashford Inc. paid him $5,668,730 in salary, option awards and cash bonuses last year, and he collected $5.2 million in equity awards from the two trusts.
His political connections were never far from the PPP debate. He’s contributed $1.1 million to Republican Party candidates since 2015, according to U.S. Federal Election Commission data. And he hired Trump-tied lobbyists as PPP took shape, giving more ammunition for attackers. Bennett said he was desperate for help.
When the PPP guidelines were rewritten to require applicants to prove they had no other way to raise money, Bennett said he knew that would be tough for him to establish.
“Such a statement is unknowable, and with the media scrutiny we received, it was guaranteed that the certification of ours — if we had made it — would be highly scrutinized,” he said.
A path forward
While $69 million is a large sum, it amounted to less than 0.02% of the initial $350 billion PPP package.
Bennett said Ashford Inc. and the two REITs haven’t been able to secure additional funding since returning the money. “The government’s post-payment rule changes ended up being bad policy with terrible consequences for literally millions of American workers,” he said.
With the responsibility of being chairman of three companies and CEO of Ashford Inc., Bennett said he’s moved on to supporting other government assistance, such as loans to be paid back with interest and travel incentives. He considers that the least the government can do for the devastated hospitality industry.
“Many people understandably don’t like the idea of the government bailing out one industry or another,” Bennett said. “But remember, it was the government that destroyed this industry by failing to stop the pandemic early and by shutting down all travel.”
A recent survey showed 70% of Americans support additional economic stimulus for industries most damaged by the virus, including travel and hospitality. The survey was conducted by Morning Consult for the American Hotel & Lodging Association. Bennett is a member of the association.
“The hotel industry was the first impacted by the pandemic and will be one of the last to recover,” association CEO Chip Rogers said in a statement. “We are a major economic driver, supporting millions of jobs and generating billions in tax revenue.”
The dropoff in travel will cut state and local tax revenue from hotel operations by $16.8 billion in 2020, according to a June report from Oxford Economics. Texas is projected to be the fifth-worst-hit state, missing out on $940 million in tax revenue.
Leisure industry analyst Batory isn’t surprised to see Bennett championing other efforts to help hoteliers. Even after the PPP backlash, Bennett stuck to his opinion that thousands of hotels — not just his — will default on loan obligations in the next few months and need help.
“He’s appropriately outspoken,” Batory said. “Some CEOs sit in their white castle and don’t want to talk, but he’s always been a champion for the industry, trying to encourage policy change. He’s always been honest and frank and doesn’t sugarcoat it and doesn’t have ulterior motives.”
He also thinks Bennett has been miscast as a villain.
“I think he did everything right and, in my view, a narrative was pushed that I disagree with because I think [he] followed all the rules, both in accessing and returning the money,” he said.
The industry was hit harder than anyone thought in March and April, but it’s also recovering faster than expected, Batory said. From April to May, total revenue per available room was up 39% in the U.S., although it was down 92% from the same period last year, according to HotStats, which tracks millions of hotel rooms worldwide.
“In March and April, we were staring into the abyss wondering if hotels were still a viable business model, which is crazy to think,” Batory said. “But it rebounded faster than anticipated due to things like pent-up leisure travel demand.”
Bennett said the sentiment among hotel operators is they’re facing a slow climb back — one made steeper by having to return the PPP money.
“It’s just a shame. So many people could’ve been helped at our company, and at thousands of other companies across the country,” he said.
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AT A GLANCE: Monty Bennett
Who: CEO of Ashford Inc.; chairman and founder of Braemar Hotels & Resort and Ashford Hospitality Trust
Age: 55
Resides: Dallas
Grew up: Houston
Education: Bachelor’s and master’s degrees from Cornell University
Personal: Married to Sarah Bennett. He has two children from a previous marriage and two stepchildren.
Ashford Inc.
What: Founded in 2014, it acts as an adviser for two NYSE-listed real estate investment trusts: Braemar Hotels & Resorts and Ashford Hospitality Trust
Revenue: $291.25 million in 2019 with an $11.23 million loss. First-quarter 2020 revenue was $133.8 million with a $186.3 million loss.
Braemar Hotels & Resorts
What: It invests in luxury hotels and resorts and was founded in 2013 after spinning off from Ashford Hospitality Trust.
Revenue: $487.6 million in 2019 with a $9.8 million loss. First-quarter 2020 revenue was $117.5 million with a $15.4 million loss
Property holdings: 13, including signature properties The Ritz-Carlton St. Thomas and The Ritz-Carlton Lake Tahoe
Ashford Hospitality Trust
What: Founded in 2003, it invests in mostly upscale, full-service hotels. It went public in 2013.
Revenue: $1.5 billion with a profit of $142.67 million. First-quarter 2020 revenue was $281.87 million with a $101.92 million profit.
Property holdings: 117, including signature properties Ritz Carlton Atlanta, Renaissance Nashville and W Hotel Atlanta
