Back in mid-March, when travel agencies began to see a dip in business due to concerns about the coronavirus, 77% of American Society of Travel Advisors’ (ASTA) membership predicted they would be out of business in six months or less if the current conditions held.
Now, nearly five months (and three rounds of COVID-19-specific federal relief packages later) travel advisors aren’t faring any better: The newest ASTA research, which surveyed 1,200 advisors between Aug. 4-5, reveals that 15.8% of agencies will shutter in six weeks or less; 24.3% will close in three months; 31.2% in six months; and 15.1% in a year. Only 13.6% anticipate being in business longer than a year from now if current conditions and cash reserves hold.
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More than 90% of ASTA’s members are reporting a revenue loss of 75% or more since 2019, and 75% of respondents have laid off or furloughed at least one employee. Perhaps more shockingly, though, is that nearly half of respondents (43.1%) have had to lay off or furlough three-quarters or more of their workforce, despite the fact that they accessed benefits from the Paycheck Protection Program (46.3%); the Small Business Administration’s Economic Injury Disaster Loan program (34.9%); and enhanced unemployment benefits (38.2%), all of which fall under the CARES Act.
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Although the implementation of CARES Act relief programs has helped prevent an even worse outcome, Zane Kerby, CEO and president of the trade association, says Congress needs to take additional measures — and fast.
“We view this outcome as unacceptable, and call on Congress to include in the next COVID-19 relief bill provisions to prevent it,” Kerby says, mentioning action items such as the inclusion of travel agencies as eligible recipients in any airline payroll support funding; the passing of the RESTART Act to provide long-term forgivable loans to the hardest-hit businesses; and an extension of expanded unemployment benefits for laid-off agency employees and independent contractors.
We view this outcome as unacceptable, and call on Congress to include in the next COVID-19 relief bill provisions to prevent it.
Additionally, 43.8% of respondents are seeing a lag in receiving an outstanding commission payment of between six and 12 months, and 18.8% say they won’t receive commission for more than a year, compared to a wait of one to three months (8.8%) or between three and six months (27.5%). Only 1.2% don’t see any lag time between a booking and payout.
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“As the only trade association advocating for travel advisors, we are spending every waking hour making this case to Congress and encourage anyone who hasn’t yet participated in our grassroots campaign to do so today,” Kerby said.
Advisors taking the survey also weighed in on critical steps the government should be taking right now to relieve struggling businesses. They include (in order of importance):
- Developing and widely distributing a COVID-19 vaccine
- Lifting the U.S. State Department and CDC guidance against international travel (Note: The U.S. State Department’s advisory was lifted Aug. 6).
- Removing the EU ban on American citizens
- Eliminating the CDC’s No Sail Order on Cruising
- Asking the Federal Aviation Administration to mandate masks on all flights, a move that ASTA’s Kerby calls “a small price to pay to be able to ‘go and see.’”
- Lifting Caribbean regional restrictions on U.S. travelers
- Taking away state-by-state quarantine rules in the U.S.
Congress is currently working on the next — and likely final — COVID-19 federal relief package. ASTA encourages travel advisors to contact members of Congress with their priorities via the association’s Grassroots Portal.
American Society of Travel Advisors