Does the $1.9 Trillion COVID-19 Rescue Plan do Enough to Help Travel-Related Small Businesses?

Mar 11, 2021

The $1.9 trillion COVID-19 relief bill landed on President Biden’s desk today and has been signed into law.

Dubbed “The American Rescue Plan,” the stimulus package is packed with provisions that will aid individuals, local governments and businesses struggling due to the COVID-19 pandemic.

But what help does it offer travel-related small businesses — in particular, how does it help hard-hit travel agencies?

The American Society of Travel Advisors (ASTA) addressed this concern and provided clarity about the bill’s key points during a 30-minute Facebook live conversation today, led by ASTA’s Zane Kerby, president and CEO, and Eben Peck, executive vice president of advocacy.

Peck put it simply: “It’s not enough. And we’re going to keep pushing.”

It’s not enough. And we’re going to keep pushing.

Prior to the bill becoming law, the association’s main priorities for the legislation included putting $9.3 billion toward a travel agency grant program; listing agencies in the Shuttered Venue Operators Grant program (which offers funds for the live event industry); providing an extension of the Paycheck Protection Program (PPP) and Employee Retention Tax Credit; and addressing, and fixing, issues created by the Canadian cruise ban, which affects Alaska’s cruise season until at least February 2022.

Although several of ASTA’s priorities were included in this newest bill, others were “left on the cutting-room floor,” says Kerby, who said the legislation had “some good, and some disappointing” features.

“The CDC’s recent pronouncements against travel are damaging and do little to stop the virus’ spread,” Kerby said. “Those who have charged the CDC with public health — namely, our elected officials — have done quite a bit for large, well-known travel-reliant businesses such as airlines and hotels … but they have done far less for less-visible sectors of the travel industry, such as ours.”

According to ASTA, part of the newest bill’s shortfall — when it comes to helping travel businesses — stems from the Democrats’ election victories, which led to a complete control of the executive and legislative branches of government. Although several COVID-19-related bipartisan relief bills were passed last year, Democrats packed this newest bill with “pent-up demands” (such as anti-poverty spending initiatives) and pushed the bill through to law without negotiations with Republicans.

As a result, most aid focuses on individual and local governmental support, according to Peck.

This control posed a challenge to ASTA, Peck says, because the association normally works with a number of Republican lawmakers — “potential champions,” as he calls them — who lost negotiating power after the election.
However, there were some provisions that made it into the bill that will be beneficial for advisors.

How the Latest COVID-19 Relief Bill Is Helpful to Travel Agencies
The bill extends the Employee Retention Tax Credit (ERTC) through the end of 2021, which was introduced in last year’s CARES Act and replenished in last December’s stimulus bill. Under the credit, businessowners can receive up to $28,000 per employee from the government in 2021 if the employee is kept on the payroll.

Extra benefits of the ERTC will be given to those suffering the most substantial revenue losses in 2020, which is something ASTA has been pushing for, and what Peck views as “a step in the right direction.”

Enhanced unemployment benefits will also be extended until Sept. 6 with a $300 per week federal supplement. These benefits also apply to independent contractors or agent owners who are sole proprietors.

The new bill also sets aside $15 billion for the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. (Under the CARES Act, businessowners applying for EIDL loans could also receive a $10,000 grant, which was later capped at $1,000 per employee — thereby causing some businesses to receive less than what they initially thought they would get.)

According to Peck, the newest bill will allow these borrowers to “be made whole” for the full $10,000.

“We expect the SBA, in the next few weeks, to make announcements for how they are going to do this,” he said. “If you were expecting $10,000 back in April and only got $1,000, there will be a path for you to get that whole grant funded.”

A portion of the $350 billion (up from $150 billion under the CARES Act) set aside for state and local government funding will be allocated to aid the area’s most-impacted industries, with the bill calling out tourism, travel and hospitality, specifically. Peck anticipates these funds will be funneled into small-business grant programs, which will “likely be renewed, refunded and extended.”

Pushing for More COVID-19 Relief for Travel Agencies
Although amendments were submitted to allow travel agencies to be included in the Shuttered Venue Grant program (which would provide grants of up to $10 million to travel agencies), this provision did not make it into the bill.

ASTA, along with John Hickenlooper, Democratic Senator from Colorado, are also pushing for remaining funds to be allocated to the PPP. The association is proposing that federal lawmakers increase the amount of money a business owner can apply for from 2.5 times the monthly payroll to 5 times (for businesses who suffered a 50% revenue loss in 2020) or 7.5 times (for businesses who suffered a loss of 75% in 2020).

The PPP is supposed to run out in March, which will create pressure on Congress to do more, and there are a number of stakeholders in the travel industry … that are still hurting and will still need relief.

The Alaska cruising issue is also continuing to see movement, Peck says, with the Alaska Congressional Delegation proposing amendments that would allow sailings from Washington to Alaska to count as “foreign voyages” (thus bypassing requirements under the Passenger Vessel Services Act of 1886, which requires foreign-passenger vessels carrying guests between U.S. destinations to stop at a foreign port, such as Canada).

Jeremy Lawhorn, a travel advisor from Fellowship Travel in Ashland, Va., asked Peck via Facebook chat if it was possible to get new amendments passed now, or if advocacy efforts would be paused until a new bill is introduced.

Now that the stimulus package has passed, the most straightforward way to move forward, according to Peck, is to “create our own opportunities” by introducing ideas as a free-standing bill, rally around it, get members of Congress to co-sponsor and then try to attach proposals to a future bill as an amendment.

“This particular bill is done; however, we believe there will be other opportunities,” Peck said. “The PPP is supposed to run out in March, which will create pressure on Congress to do more, and there are a number of stakeholders in the travel industry … that are still hurting and will still need relief.”