Even With Travel’s Recovery Underway, Advisors Need Support Now More than Ever

The TSA last weekend hit a new pandemic milestone—on Sunday, May 16, the TSA screened more than 1.8 million passengers for the first time since COVID began to impact the U.S. last March.

The news was another green shoot in the developing story of the travel industry’s recovery, an industry that has climbed out of the depths of early 2020 when the TSA regularly saw less than 100,000 passengers per day. However, the story is far from over and, despite all the green headlines about lifting mask mandates and international travel reopening, there is still so much ground to cover before the travel agency community can celebrate its survival.

This week, the American Society of Travel Advisors (ASTA) team and its members were on-hand in Washington D.C. to meet with members of Congress in hopes of drumming up support for legislation that will not only allow the community to survive, but to thrive through travel’s pickup in demand.

On Tuesday, ASTA President Zane Kerby along with several industry leaders held the first-ever Legislative Day press conference for ASTA in order to convey that message to the press and its members. Travel is coming back, and demand is high, but it is not that easy for the trade.

The recovery of the travel agency community needs to go far beyond just getting people traveling domestically again. That is a start, and there are green shoots everywhere, but for the trade to survive the last leg of the pandemic there needs to be focused relief from the government.

“The recovery remains frustratingly uneven and remains akin to a Category 5 hurricane,” Kerby said on Tuesday. “The reason our members are gathered here is simple—our elected officials have a moral obligation to support travel-related businesses.”

Kerby put the pandemic’s impact on the trade into three numbers to put things in perspective—82%, which is the average revenue decline for agencies in 2020; 62%, which is the number of travel advisor jobs who have already been furloughed or lost; and 8, which is the number of months on average that advisors are waiting to get commission.

Cruising and commissions
Even with the progress in the industry’s recovery, one of the main issues holding it back is still the CDC’s Conditional Sail Order (CSO).

Olga Ramundo, president and CEO of Express Travel in South Florida, said that operating out of Miami, the cruise capital of the world, you can see the impact.

“We’re talking about hotels and the airfare coming into Miami to sail. We are talking about tour guides and commission,” she said.

Even with the pent-up demand that the cruise industry is seeing, and with future bookings for 2022 and 2023 extremely strong, travel advisors are not seeing any fiscal benefits just yet because of the nature of commission payments. While some cruise lines have shifted to paying at the time of booking, including NCL, others have not.

“Something that many people don’t realize, we book, we rebook, the industry says let’s keep holding, and we don’t earn a penny on those bookings or rebooking until those customer sails,” Ramundo said. “We are talking about record-breaking bookings but we will not get paid until then.”

Getting the CSO lifted is a start, but communicating to representatives that the recovery has not yet truly started for the trade because of that commission gap is also a major focus for this week.

“People automatically assume that it’s like the restaurant,” Alex Sharpe, president of Signature, said on Tuesday. “But it’s not. We’re doing the work without any of that upside for several months. It’s all been delayed…That’s really where the fear comes in.”

Sharpe, who has been meeting with members throughout the country, also mentioned that even with the first couple of government programs, for the “overwhelming majority of travel advisors, it hasn’t been easy.”

“Navigating those things is very, very difficult. These are small businesses for the most part. So they are advocating for their customers and then trying to navigate these different programs.”

In some cases, the benefits of the CARES Act only last advisors eight weeks and, with those funds gone, there seems to be a gap of about eight months before the majority of advisors will start benefiting from the return of travel demand.

“We talk about that we’re amongst the survivors, but can we make it another eight months? It feels like the government and country are moving on,” Sharpe said. “We need to have the funding in order to get back to work.”

Some of those survivors, according to Nexion’s Jackie Friedman, were the independent advisors who were able to be resilient enough despite relying only on commission.

“They are resilient, they are entrepreneurial, they are collaborative,” she said. “So many individual advisors helped each other get through this times and all we can do is help provide and help guide and help with business recovery.”

There was such a large administrative burden on advisors navigating those PPP and unemployment programs as well, with different states having different rules. That lessened the impact of the programs that were there to keep agency owners afloat.

“Part of the problem was that just some of the state websites weren’t set up to reflect that these folks were independent,” she said.

‘We want to serve’
One of the best-known examples of the pandemic’s impact is the recent news of Valerie Wilson Travel’s sale to FROSCH, an acquisition that was announced earlier this month.

Jennifer Wilson-Buttigieg, speaking on Tuesday, said that VWT couldn’t survive the pandemic’s impact, even coming into 2020 with no debt, something that “I will never ever take for granted again,” she said.

According to Wilson-Buttigieg, the first round of PPP “barely covered our rent” and the second round didn’t cover staff expenses. The agency was then waiting for the third round of PPP that hadn’t yet come before moving forward with the acquisition by FROSCH.

“We want to serve,” she said. “Travel is the most important thing to everyone in this room and we are missing it. I am so disappointed with our elected officials, they made makeshift plans and one size fits all,” which didn’t do the trick for such a unique industry.

Congress needs to pay attention to its travel industry members, particularly because of the economic impact that the industry has not just domestically but internationally—according to Kerby, 160,000 travel advisors support over 700,000 jobs in the U.S.

“When we need to do is to look at it holistically…we need to look at it holistically right now to say as an industry we are significantly down more than 50%, more than 70%. You need targeted aid based on that. It’s not a handout. All of these businesses pay taxes,” Wilson-Buttigieg added. “We are not being recognized.”

“That is something that is a message that is still out there, that gets lost in the shuffle…the magnitude of travel and tourism as a business,” Virtuoso’s Matthew Upchurch added.

Travel’s impact isn’t counted the right way, it’s aggregated across different industries, and the trade has a responsibility to keep reinforcing to the public, the media, and the government, that it is having that impact. And when the government shut down the industry, it should be up to the government to help restore it.

“As we look at this – we got to get that message across – this was a year of diversity and inclusion and a year of we cannot allow the pandemic to wipe the economic engine of most economists in the world and that’s small and medium-sized businesses,” Upchurch said.

Legislative Day
Getting recognized is part of the drive behind this week’s activities in D.C.Over 170 travel advisors from 40 different states joined ASTA’s team in Washington D.C. this week at their won expense to petition their local officials. Most of those members are female, hall business owners who took it upon themselves to help ASTA mark a hybrid (virtual and in-person) record turnout on the Hill.

ASTA is focusing on a number of things this week, but front and center are getting members of Congress to support the SAVE Act, which would make agency owners eligible for grants under the Shuttered Venues Operators Gran Program.

ASTA will also hold talks about the Alaska Tourism Recovery Act, a bill passed last week in the Senate that is largely seen as the first step in restoring the Alaska cruise season. That bill is now making its way to the House.

While there were capacity limits put in place because of conditions in Washington D.C., advisors who were not able to travel to D.C. can still get involved.

“I implore anyone who is in this industry, you need to reach out to your congressperson every day. Be a pain. People need to understand that we are small or medium-sized businesses that employ people in your states,” Wilson-Buttigieg said.