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Billionaire on ‘Open Texas’ task force laments the year that cut his net worth in half and crippled his Omni hotel business

Dallas businessman Robert Rowling says 2020 has been 'really, really hard.'

In 2016, Dallas billionaire and Omni Hotels owner Robert Rowling was blissfully unaware of something like an unprecedented pandemic shutting the hospitality industry down overnight.

“I see the energy business and people struggling and I see our hotel business and how incredibly well it’s doing [and] I thank the Lord that we diversified into some other businesses,” he told The Dallas Morning News at the time.

Today, Rowling laughs at his optimism back then, as he and other U.S. hotel operators claw their way back from one of the steepest drops the industry’s ever seen. At the height of the coronavirus pandemic in April, hotels saw 83% of their revenue disappear compared with the same month last year, according to research firm STR.

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“Gyms and hotels have taken the brunt,” he said in an interview on the day his company, TRT Holdings, sold Gold’s Gym earlier this month. “I still like the hotel business. It’ll come back.”

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Rowling isn’t the only Dallas hotelier who’s publicizing the dire state of the hospitality business.

Monty Bennett, CEO of Ashford Inc., has been lobbying for more help from Congress since having to return $69 million in Paycheck Protection Program loans meant to help small businesses meet payroll during the pandemic. After a public backlash over public companies scooping up millions in forgivable loans, the U.S. Small Business Administration changed the qualification rules.

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While hotel and restaurant businesses were allowed to apply for PPP loans for each of their locations with 500 or fewer employees, the rule change made it harder for companies like Ashford to qualify for cash.

But earlier this month, SBA data revealed that privately-held Omni Hotels — which did in excess of $2 billion in revenue in 2019 — received $84 million from the COVID-19 relief program.

PPP loans were widely used across industries because they’re essentially free money, as long as most is spent to keep workers on the payroll. The loans are forgiven if the recipient returns employment and wages to pre-pandemic levels within 24 weeks.

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Rowling isn’t sure that’s possible for Omni, which has 60 locations and 21,000 rooms nationwide.

“They’re not forgivable for us,” he said. “We’ve brought back thousands, but we still aren’t going to be able to meet the qualifications.”

The 421-room Omni Las Colinas Hotel (formerly Omni Mandalay Hotel at Las Colinas), owned by...
The 421-room Omni Las Colinas Hotel (formerly Omni Mandalay Hotel at Las Colinas), owned by Rowling's TRT Holdings, has implemented COVID-19 safety measures since reopening.(Brandon Wade / Special Contributor)

An industry in crisis

There’s no question the hotel industry is in a crisis that’s mostly hurting employees on lower rungs of the corporate ladder. The U.S. leisure and hospitality industry has lost 4.8 million jobs since February — more than the combined job loss of five other hard-hit industries: construction, manufacturing, retail, education and health services.

“Our industry was among the first impacted by the pandemic and will be one of the last to recover,” said a statement from Chip Rogers, CEO of the American Hotel & Lodging Association.

The hotel association is asking Congress for additional tax and lending help for hotels, as staffing remains at half of pre-pandemic levels.

In Dallas-Fort Worth, employment in the leisure and hospitality industry declined nearly 40% year-over-year in April, according to the U.S. Bureau of Labor Statistics. A preliminary June estimate shows improvement, pegging the decline at 18%.

Last week, the Hotel Association of Tarrant County, which services 400 hotels, said it was starting a meal program for hotel employees who’ve been laid off, had hours reduced or been furloughed due to the economic impact of the pandemic.

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Aaron Jones, a former senior revenue analyst at Grapevine-based Kriya RevGEN, a hotel revenue management service, wasn’t surprised when he was laid off March 23 since he was a new hire.

Jones said his LinkedIn feed is filled with colleagues searching for jobs. He’s steering clear of the hospitality industry, choosing to work on his master’s degree in technology management instead.

He worries what the end to federal supplemental unemployment benefits — the extra $600 a week — will mean for those laid off in the industry. The bonus payment that’s helping 25 million Americans expires July 31 unless Congress decides to extend it.

“The hospitality industry was, and is, being completely decimated with no end in sight short of a [COVID-19] vaccine,” Jones said. “It will take years for the hospitality industry to return to where it once was.”

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Big hotel companies like Omni and Bennett’s Ashford Hospitality Trust and Braemar Hotels & Resorts were allowed to dip into the PPP bucket largely because the program was rushed out due to the dire state of the economy. Jones said that doesn’t make it right.

“A program being ‘technically available’ and it being an actually good idea for your company and the taxpayer are two very different things,” he said. “Congress should have known better, but so should have these companies.”

Rowling said some of his hotels, like the Shoreham in Washington D.C., likely won’t reopen until next year. He considers it ironic that the industries struggling the most with COVID-19 effects are the ones that will have to pay back the loans because they can’t afford to hire back workers.

“You have these law firms where they’re doing fine and didn’t lay anyone off and every dime will be forgivable,” he said. “Or country clubs. They didn’t quit charging dues during the pandemic.”

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Rowling said he expects just 10% to 12% of Omni’s $84 million in loans to be forgivable.

Even though he wasn’t able to hang on to his companies’ PPP funds, Bennett said he agrees with Rowling that SBA needs to amend its rules to help hotels struggling to rehire.

“Bob Rowling is a brilliant businessman who succinctly describes the problem with the PPP program,” he wrote in an email. “In my view, the forgiveness period should indeed be pushed farther out.”

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Director of Rooms Kelly Theus wipes down the front door at the Omni Las Colinas Hotel on...
Director of Rooms Kelly Theus wipes down the front door at the Omni Las Colinas Hotel on Thursday. (Brandon Wade / Special Contributor)

Rowling on Abbott’s task force

Another similarity between Rowling and Bennett is their staunch support of Republican candidates, including millions in donations. Since 2016, Rowling has donated over $2 million, according to the Federal Election Commission.

Hailing from a political party that’s historically against government handouts, the two hoteliers don’t seem like the type to endorse a $660 billion government aid program like PPP, a part of the $2 trillion CARES Act meant to provide COVID-19 relief.

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“I’m not sure I would have voted for the CARES Act,” Rowling said. “I’m conservative and worry about the whole package of spending, but I’d be foolish to not take advantage of the program.”

He’s an avid supporter of Texas Gov. Greg Abbott, who in April named Rowling to the Strike Force to Open Texas, a group of business leaders who represent the state’s industries to help advise on reopening plans. When Abbott asked Rowling in May — when he still owned Gold’s Gym — if it was OK to open fitness clubs in the state, Rowling gave him the go-ahead.

“It’s been very time-consuming but fulfilling,” he said about frequent task force Zoom meetings.

At first gung-ho about reopening the state to get a head start on the economic recovery, Abbott was forced to take a few steps backward this month as cases spiked. On June 29, Abbott issued an executive order that returned restaurants to 50% capacity — down from 75% — and closed bars and similar establishments that received more than 51% of sales from alcohol.

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“He had the guts to go backward,” Rowling said. “I respect him for saying, ‘I made a mistake.’”

Rowling’s task force duties this past week included being deposed in a lawsuit against Abbott, meaning he and another member, Houston restaurateur and billionaire Tilman Fertitta, will be asked to testify on the governor’s behalf.

Bar owners behind the lawsuit say they want to be treated like restaurants that sell alcohol, which can run at 50% capacity, instead of having to shut down. Rowling said bar closures resulted from some not following Abbott’s capacity rules in June.

“They didn’t limit to 50%,” he said. “They served as many drinks to as many people as they could get in there.”

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A billionaire’s recovery

So far, Rowling said he hasn’t used his political connections to lobby for help for his companies, something Bennett did when he hired two Donald Trump-affiliated lobbyists to fight for his PPP loans.

Rowling said each of his hotels is a standalone company, many of which were too big to seek help from the PPP yet too small to turn to debt markets. Similarly, Bennett said since returning the PPP money, his hotels haven’t secured alternative funding.

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“The only way to fund our companies is if I take it out of my pocket,” Rowling said. “In this market, who wants to loan money to closed hotels, even if they did well in 2019?”

He also resents the title “billionaire” always used in front of his name, especially now when some may think he has more than enough to bail out his troubled companies.

Born in El Paso and raised in Corpus Christi, Rowling said he grew up poor before he and his dad sold their oil and gas company to Texaco for $476.5 million in 1989.

Rowling, who graduated from the University of Texas at Austin and got his doctorate from Southern Methodist University, used the money to start TRT, which bought Omni for $500 million in 1996 and Gold’s Gym for $158 million in 2004. He sold Gold’s Gym for $100 million this month.

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“Most of my net worth is in these companies — the very ones shut down right now,” Rowling said. “I don’t have $5 billion in cash.”

Like his hotels’ revenue, Rowling’s fortune has shrunk in the COVID-19 era. His net worth dropped from $5.5 billion in October to $2.5 billion in April, according to Forbes. It’s now at a middle ground of $4 billion.

Rowling expects the hotel industry to recover slowly. The leisure travel industry is already doing quite well with people wanting to get away from home and preferring to drive to a hotel nearby rather than a trip that requires a flight.

Another sign of recovery is that after 45 days spent working from his Central Texas ranch, Rowling said he’s back to his regular schedule at his Dallas office. Over half of his hotels have reopened. He’s brought back about 10,000 employees but needs to rehire thousands more.

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When asked how he will look back on 2020, Rowling lets out a telling, “Oof!”

“It’s like nothing any of us have witnessed before and hopefully won’t ever again,” he said. “It’s been really, really hard.”