Tell Congress to Pass New Tax Legislation Benefiting Hospitality Businesses 
New legislation would restore expired tax deductions for many operators who are investing in their businesses. This legislation would extend 100% bonus depreciation for qualifying property, increase the maximum depreciation expense amount, and extend the inclusion of depreciation and amortization in business interest expense calculations. By restoring business interest expensing, this bill would help many restaurant and lodging operators lower their tax burden when investing in building upgrades, remodels, expansions, and refurbishments. 

Members of Congress need to hear directly from operators like you, so please take two minutes to add your voice. Take action today to ensure Congress acts quickly to pass this bill:

• Restaurants Act
• Hotels Act

Hotels Will Pay Historic Wages, Generate Record Level of Tax Revenue in 2024
Despite labor shortages and persistent inflation, hotels are projected to pay a record amount of wages and generate a record level of tax revenue in 2024, according to the American Hotel & Lodging Association’s 2024 State of the Hotel Industry report. 

Top findings include:

• Hotels are projected to pay employees a record of more than $123 billion in wages, salaries, and other compensation in 2024, up from $118 billion in 2023 and $102 billion in 2019.
• Hotels are projected to generate a record of nearly $54.4 billion in state and local tax revenue in 2024, up from nearly $52.4 billion in 2023 and $43.4 billion in 2019.
• The 2024 projection includes more than $26 billion in lodging-specific taxes.
• Hotels are projected to employ nearly 45,000 more employees this year, while still employing nearly 225,000 fewer people than the nearly 2.37 million employed in 2019.
• Hotels will leverage cloud technology and AI to increase operations efficiency and enhance guest experiences.

Questions? Contact Pete Kasperowicz, American Hotel & Lodging Association, with any questions at (202) 289-3155.

OHA Buried Report Citing Taxes Don't Curb Excessive Alcohol Use
The Oregon Health Authority (OHA) commissioned EcoNorthwest to produce a report on the cause and effect of increasing alcohol taxes in an attempt to curb heavy drinking amongst the Oregon populous. The study, which should have been published in 2021, concluded alcohol taxes do not change consumer habits or significantly reduce abuse.

The Oregon Beverage Alliance is voicing their concern and that this publicly funded report was intentionally withheld by the Oregon Health Authority, as uncovered by the Oregonian. While Oregon’s breweries, wineries and cideries continue to face major challenges with record closures rates and reduced volume sales, the Oregon Beverage Alliance says "the last thing any local business needs are tax increases.”

Introducing Tip Tax Credit by ORLA Hospitality Partner, Adesso
Did you know your employees’ tips can get you money back from the IRS? With Tip Tax Credit by Adesso, employers can get tax credits for tips your employees earn. The FICA Tip Credit is a federal tax credit available to employers who have employees who receive tips as a significant part of their income. FICA stands for the Federal Insurance Contributions Act, which includes Social Security and Medicare taxes. The credit allows employers to claim a portion of the FICA taxes paid on employees' tips as a credit against their own tax liability.

If your business is tip-driven, tips are reported by your employees, and FICA taxes have been paid on those reported tips, your business may qualify.

To learn more, visit our Adesso partner page to get started with Tip Tax Credit.

​FOR IMMEDIATE RELEASE
Contact: Jason Brandt, President & CEO, ORLA      
503.302.5060 | [email protected] 

Oregon Tourism Leadership Academy to Support and Enrich Hospitality Champions

[Wilsonville, OR] – The Oregon Restaurant & Lodging Association (ORLA) proudly announces the fifth-year launch of the Oregon Tourism Leadership Academy (OTLA), developed in partnership with the Oregon Destination Association and Travel Oregon, and led by the industry’s top experts. The annual experiential learning program is targeted to public and private sector tourism professionals who are seeking to polish their leadership and professional skills, continue to grow their career accomplishments, and make positive and lasting contributions to the state’s tourism economy and its success. 

“We’re elated to see the ongoing success of the Oregon Tourism Leadership Academy move into its fifth year,” said Jason Brandt, President & CEO for the Oregon Restaurant & Lodging Association. “The academy experience is enriching the value of working in the tourism industry for those who participate in the program and it’s an honor for ORLA to be a part of it.” 

The fifth-year class will launch April 3 in Southern Oregon and conclude in the Willamette Valley during Winter of 2024. Participants include representatives from many sectors of the hospitality and tourism industry including destination management organizations, restaurants, chambers of commerce, lodging properties, and travel publications. View a roster for the fifth-year class.

Curriculum, field visits, and hands-on experiences are strategically designed to support and align with the state’s tourism goals and objectives which include four Strategic Imperatives:

• Optimizing the Statewide Economic Impact of Tourism in Oregon
• Supporting and Empowering Oregon’s Tourism Industry
• Championing the Value of Tourism
• Running Effective Tourism Oriented Organizations and Businesses

The OTLA experience is designed for professionals currently serving Oregon’s tourism and hospitality industries. Applications from industry professionals who will soon be responsible for similar levels of responsibility are also encouraged to apply for the academy program.

The strategic imperatives outlined above will serve as the program’s core themes each year. Each theme will receive focus as a part of four multi-day experiential learning programs designed to provide academy participants with comprehensive educational experiences. Each year, approximately 20 participants will immerse themselves in the academy’s professional development curriculum alongside industry experts and facilitators.

For more information on the Oregon Tourism Leadership Academy, visit OregonRLA.org/otla.

2024 Roster:

• Jen Anderson, Content & Community Manager - Travel Oregon, Portland
• Allen Barber, Administrative Assistant - Cannon Beach Chamber of Commerce, Cannon Beach
• Jessica Benfield, Lead Accountant - Oregon Restaurant & Lodging Assn., Wilsonville
• J.B. Carney , Senior Director, Sports - Travel Lane County, Eugene
• Jason Coleman, General Manager - The Coho Oceanfront Lodge, Lincoln City
• Jessy Fabrizio-Stover, Outdoor Recreation Development and Global Sales Coordinator - Willamette Valley Visitors Association, Salem
• Allie Field, Sales & Marketing Coordinator - Oregon Media, Bend
• Heather Graham, Hotel Manager - Hoagland Properties, Florence
• Jackie Hagan, Sr. Communications & Media Relations Mgr. - Travel Portland, Portland
• Jessica Hobson, Tourism and Marketing Director - Baker County / Travel Baker County, Baker City
• Justin Keyes-Bundy, Digital Content Manager - Visit Bend, Bend
• Louisa Mariki, Interim, Stewardship Investments Manager - Travel Oregon, Portland
• Lee McCollins, Director of Marketing and Communications - Visit McMinnville, McMinnville
• Kim Molnar, Director of Tourism - Prineville Crook County Chamber of Commerce/Explore Prineville, Prineville
• Jenn Parks, Senior Community Engagement Manager - Travel Portland, Portland
• Amber Powell, Director of Hotel Operations - The Mill Casino-Hotel, North Bend
• Carole Skeeters Stevens, Chief Marketing Officer - Travel Medford, Medford
• Nicole Steen, Strategic Communications Manager - Tillamook Coast Visitors Association, Salem
• Griffyn Storm, Website & Communications - Visit Grants Pass, Grants Pass
• Ryan Torres, Area Director of Sales - Merete Hotel Management, Medford
• Holcombe Walker, Owner, Klondike Tavern, Historic Saint Helens Hotel Redevelopment Project - Klondike Tavern / Seance Industries LLC, St. Helens
• Kara Woolsey, Director Travel Pendleton - Pendleton Chamber of Commerce / Travel Pendleton, Pendleton

About:

The Oregon Restaurant & Lodging Association (ORLA) is the leading business association for the foodservice and lodging industry in Oregon. A not-for-profit trade organization, ORLA represents approximately 3,000 member units and advocates for over 10,000 foodservice locations and over 2,400 lodging establishments in Oregon. 

The Oregon Hospitality Foundation (OHF) was formed in 1992 as a 501(c)(3) nonprofit entity of ORLA with a mission to support the workforce, educational, training, and philanthropic needs of Oregon’s hospitality industry. Its work is enabled by the generous support of partners, private donations, contracts, and grants.

Guest Post

In a disaster such as a flood, wildfire or a severe storm people often need to temporarily evacuate, or in worst case scenarios, lose their homes. They need a place to stay and food to be able to rebuild their lives. The Oregon Department of Human Services’ Office of Resilience and Emergency Management is looking for licensed businesses throughout Oregon that can feed, house or provide water to people during a disaster. 

Two community meetings are planned in January for people interested in learning more. Please see below. 

For example, recently in Lincoln County people had to leave their homes due to flooding and needed hot meals. As the week progressed, the need increased with the flooding in Tillamook County. Families were displaced and needed meals. Without any contracted vendors in the area there were very limited options. 

“Having licensed catering or restaurant services within local communities allows us flexibility and maneuverability to quickly respond to these types of requests. We’re looking for restaurants, professional caterers, hotels, motels or any licensed business able to feed, provide water or can shelter a few people to an entire community if the disaster were something like the Cascadia earthquake. During disasters people aren’t going out to restaurants or renting hotel rooms, so it can help businesses recover from lost revenues also because they will be paid for their services. Plus, this a way businesses can help their communities recover. The people needing help are likely your neighbors, your friends, people in your community. The business owners and managers will be known to their communities as someone who stepped up to help,” Michelle Richards, Office of Resilience and Emergency Management, (OREM) Mass Care Coordinator, said.

The feeding and lodging businesses, called vendors, would be compensated by the state for these services. The vendors would need to go through a process to determine what they are capable of. They could have a large capacity or small. Maybe they could only provide food boxes within a 50-mile radius, or maybe they could deliver throughout the state – all are welcome, Richards said.  

If people or businesses are interested in helping, they can contact Richards directly. She will walk people through the process. 

So far, it’s been a slow start and there are only a few vendors enrolled. Feeding and lodging help is especially needed along the Oregon Coastal, outside the I-5 Interstate Corridor and Eastern Oregon. 

In 2020, OREM contracted with hotels and meal providers in eight counties to sheltered more than 4,400 wildfire survivors in more than 120 hotels and served more than 2.2 million meals. OREM is a program of the Oregon Department of Human Services and is tasked with providing food, water and shelter in emergencies. 

Interested? Contact Michelle Richards, Office of Resilience and Emergency Management, (OREM) Mass Care Coordinator for Oregon, at 503-510-2763. 

To learn more: 

• An informational meeting for potential applicants is planned for January 22, 2024 at 1 p.m.  through a Microsoft Teams Meeting.  The agency will provide additional information on the need for On-Call Feeding and Bottled Water Delivery Service and will answer questions asked by potential applicants. Applicants who do not need to attend this optional meeting may still submit an application for this RFA 
• Potential Applicants may use the following Microsoft Teams link to attend the meeting: https://www.microsoft.com/en-us/microsoft-teams/join-a-meeting?rtc=1
  • Meeting ID: 226 698 005 086
  • Passcode: KgoEe4
  • Or call in (audio only): 971-277-2343; 
  • Phone Conference ID: 574 923 839#
• A second Pre-Application Information Meeting for potential applicants is planned for January 26, 2024, at 1 p.m. through Microsoft Teams. The agency will provide additional information on the need for Non-Congregate Shelter and Lodge spaces and will answer questions from applicants. The Pre-Application Information Meeting is optional for potential applicants to attend. Applicants who do not attend the meeting may still submit an application for this RFA.  Potential Applicants may use the following Microsoft Teams link to attend the meeting: https://www.microsoft.com/en-us/microsoft-teams/join-a-meeting?rtc=1
  • Meeting ID: 278 467 296 008
  • Passcode: PyY5ed
  • Or call in (audio only): 971- 277-2343; Phone Conference ID: 877 521 084#.

Download the "Be a Community Hero" flyer for more details. | Oregon Department of Human Services

Guest Blog

While millions of well-meaning Americans flock to gyms with a newfound desire to improve their health there is one area of their well-being that is likely still being neglected - cyber health.

All around us, our offices, where we shop, and even where we workout – technology is everywhere. It’s a significant part of all our lives and we rely on it moment to moment to get successfully through each day.

As our reliance on technology and the internet grows, so does the opportunity for adversaries to use it against us. But, just like working out to improve our physical health and protect against disease, following simple tips from the Cybersecurity and Infrastructure Security Agency (CISA) can improve our online health and protect us from cyberattacks, ransomware, and identify theft. 

So, in the new year resolve to visit the Cybersecurity and Infrastructure Security Agency (CISA) new campaign – Secure Our World – that offers steps everyone should follow to improve our cyber health.

The message that pops up on our phone or computer to update software or install security patches is an example of ways we can improve our cyber health. Here are a few other simple actions we can take to protect our information and stay safe online:

Use strong passwords that are long, random, and unique to each account. And use a password manager to generate them and to save them.

Enable multifactor authentication on all accounts that offer it. This function sends a text to your phone, or you receive an email to ensure it is, indeed, you accessing the account. Enable this function, particularly for financial, healthcare, social media, and other accounts detailing your personal information. 

Think before you click really means recognizing email phishing attempts. Be cautious of unsolicited emails, texts, or calls asking you for personal information.  Resist the urge to click on these links and don't click on links or open attachments from unknown sources.

Update software every time your device prompts you. In fact, enable automatic updates on software so the latest security patches keep devices continuously up to date.

The Secure Our World website is a centralized hub for cybersecurity awareness resources. This is where you will find information on securing personal accounts, offering guidance on personal device safety, safe internet browsing practices, social media usage, and protecting personal information online. Secure Our World also includes support and resources for families. It provides guidance on implementing parental controls, fostering safe digital habits, and ensuring a secure online environment for children.

Your New Year’s resolution can now include equipping yourself with the knowledge and resources needed to stay safe while online. Happy New Year. | Patrick Massey, Regional Director, Cybersecurity and Infrastructure Security Agency (CISA)

​Guest Blog

If you haven’t read my previous guest blog content, my name is Joseph Hollcraft and I am the Director of IBA’s Oregon Hospitality Industry Transaction Division. In this fifth and final installment in the series, I’m going to discuss best practices around preparing your business for sale as it relates specifically to restaurants, bars, and lodging establishments. 

Business valuation is a sophisticated and nuanced process. If you’ve spent time researching how to exit your business you’ve likely come across the concept of a “multiplier.” A multiplier is a multiple of SDE, or Seller Discretionary Earnings. SDE is the measure of benefit to ownership generated by a business and includes salary, profit and any expenses run through a business by ownership. However, there are some elements that are benefits to ownership that my valuation process can’t account for. The short version of this concept is this: dollars taken out of the business or put into things like Cost of Goods Sold can’t be examined, and each dollar taken out of the business costs between two and six dollars in final valuation due to the use of multipliers. Below are three cases where business value is lost due to discretionary choices by ownership.

The first and most common expression of the above is running personal costs through Cost of Goods Sold. Let’s say you go to Costco to bulk purchase supplies for your company. Unless each purchase is itemized and personal expenses notated, anything you buy and bring home is a cost to the business that ultimately comes out of the bottom line. This could be food for home, necessities like paper towels, or other home goods you or your family might want. If you spend $1,000 a month doing this, that translates into $12,000 a year. This would reduce your company’s valuation by between $24,000 and $72,000, depending on the multiplier. If you spend more than $1,000 a month in this scenario the loss of business value goes up accordingly. 

The second is hiring family members or other people close to you at a rate above market. If you have a son or daughter who is running your business in the GM position, and you’re paying them $100,000 when the position in your business’s market only commands $65,000, then your business is spending $35,000 it doesn’t have to pay. Caring about the people close to you and giving them an extra boost is a privilege few of us are able to provide. Those business owners that can, often enjoy helping the people around them. The bottom line here is the cost at time of valuation is substantial. As in the above example, $35,000 spent on an employee that doesn’t need to be spent to hire and keep a quality GM translates into $70,000 to $210,000 in business value. This may be worth it to you, but it’s a point to consider. It can also create problems in terms of retention of the individual for the buyer. Would a person stay at a job where they have to take a pay cut? 

The third example is holding cash rather than running it through the business. No one enjoys paying taxes. One way business owners reduce their tax liability is keeping cash income off the books and taking it home as a benefit to ownership. In businesses that generate substantial cash, even just 10% of gross, the loss in value can be gigantic. I valued a restaurant that was generating approximately $5,000,000 in sales. About 10% of that gross was in cash. Figuring a 12% net profit margin, which is common for restaurants, this 10% of gross in cash equates to $60,000 of net a year, which translates to a loss of between $120,000 and $360,000 in go-to-market price. The business I valued in this example had a profit margin even higher, at around 25%. The owner took almost every dollar of cash out of the business, not reporting it on his P&L. My valuation of this incredibly successful business was approximately $1,200,000. Had the owner left all of the cash in the business, it would have commanded a value closer to $2,000,000. This can be the difference between comfortably retiring for the rest of your life and needing to work again five or ten years down the road. 

This concludes my five part series on strategies and best practices around an exit from your business. If you haven’t read the previous four blogs posted here on the ORLA website, it may be beneficial for you to review them. Should you desire a professional opinion of the value of your business, feel free to contact me via email or at (503)739-4880. All conversations will be held in strict confidence. You can also review IBA’s website at www.ibainc.com which houses a veritable treasure trove of information on preparing your business for sale and what professional mergers and acquisitions specialists such as myself can do for our clients. 

Thank you for your time and attention. I look forward to hearing from you should the need arise, and I hope you and yours had a wonderful holiday season. | Joseph Hollcraft, IBA