The $2 trillion coronavirus relief package, which is expected to pass both chambers of Congress and be signed into law by President Trump sometime over the next few days, includes some much-needed, targeted relief for U.S. travel agencies and agency employees.
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, travel agency employees and independent contractors will be able to apply for relief for their businesses hurt by the sudden stop in travel and in future bookings, because of the spread of coronavirus (COVID-19).
The biggest win for agencies comes in the bill’s $25 billion in loans and loan guarantees, segmented for airlines, that includes “ticket agents,” which ASTA says is the statutory term for agencies. Under CARES, agencies will be eligible for some of that $25 billion in relief and ASTA says that, as funds will be allocated by the Treasury Secretary and Secretary of Transportation, it will work with both to “implement this provision.”
Agencies and agency employees, most of which are categorized as small businesses (having under $22 million in annual revenue or fewer than 500 employees), will also be able to take advantage of the $349 billion put toward a new U.S. Small Business Administration (SBA) loan program. That loan program, which is offering loans of up to $10 million, will allow businesses to have the portion of the loans that covers the payroll, mortgage, rent or utility expenses from Feb. 15 to June 30 forgiven.
Those who do not apply for the SBA loan program would be eligible for some of the $425 billion of low- or no-interest loans and loan guarantees from the U.S. Treasury Department that have been earmarked in the bill for “U.S. businesses that incurred losses directly or indirectly as a result of coronavirus,” ASTA said.
The bill would also give up to 39 weeks of unemployment insurance for people not otherwise eligible for unemployment compensation, including the self-employed. “Contractors working in the industry, and their business income has seized up along with every other part of the industry, but these self-employed individuals typically do not have access to federal and state unemployment benefits, as laid-off W-2 employees do,” ASTA said.
The news marks a major win for the travel trade and a major win for the businesses hurt by the sudden stop in travel and in new bookings because of the spread of coronavirus (COVID-19). It also marks a victory of the American Society of Travel Advisors (ASTA), who had been lobbying on behalf of its members in Washington D.C.
“Over the past few weeks, we have worked hand-in-hand with our 13,000 members to secure the maximum amount of relief for the travel agency community in this package. The fact that travel agencies are included in the airline assistance portion of the bill is a huge win and means that Congress heeded our call to include our members in any targeted travel industry relief,” ASTA president and CEO Zane Kerby said.
“We are also heartened by the outpouring of support from the industry, including over 28,000 grassroots messages to legislators through ASTA.org, and feel strongly that our efforts made a significant difference in the size and scope of relief options in the bill.”
According to a survey of ASTA agents, a lot of agencies are badly hurting because of the impact of COVID-19. Almost 80% of ASTA agencies have had to reduce payroll because of the crisis, with more than 60% having to reduce by at least 25%. And, given the downturn in client travel, more than 90% of agencies said that they would be unable to survive more than 12 months in business, with a little under 50% saying that they wouldn’t be able to survive the next three months.
U.S. travel reacts
U.S. Travel Association president Roger Dow praised the bill's passing, but said that there is still work to be done to protect all the jobs supported by travel.
"Our industry stayed together and presented hard facts to make the case for massive and urgent relief, and our political leaders heard us. However, the true scale of this crisis, and the economic damage created by this public health disaster, will extend beyond the scope of this historic bill. It's sad, but it's true, more help will be needed soon," he said.
"Travel businesses—83% of which are small businesses—help supply 15.8 million U.S. jobs, almost six million of which could disappear in the next five weeks. The stakes are huge for the country's economic health both now and in the future, and we urge our leaders to continue to take bold actions to protect the economy of our country."