As the industry continues to reel from the negative effects of the COVID-19 (coronavirus disease 2019) pandemic, the American Society of Travel Advisors (ASTA) has been relentlessly advocating on behalf of U.S. travel agencies at the government level.
In a March 20, 2020 letter to Congress, Eben Peck, executive vice president of advocacy for ASTA, urged lawmakers to provide financial relief to travel agencies in the form of unemployment benefits for independent contractors; travel employment grants; small business interruption loans; airline sector loans; and airline sector grants. A large portion of the organization’s 13,000 members also stepped up to the plate, sending more than 28,000 grassroots messages to legislators through ASTA.org.
And, due in large part to their efforts, several provisions in today’s historic $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act will include relief for U.S. travel agencies.
“The coronavirus pandemic has proved to be the biggest challenge ever faced by ASTA and its members,” said Zane Kerby, president and CEO of ASTA. “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. We feel strongly that our efforts made a significant difference in the size and scope of relief options in the bill."
Here’s what these provisions could mean for your business.
Travel agencies may be eligible for airline economic stabilization loans.
What this means: The U.S. Treasury Secretary can authorize up to $25 billion in loans and investments to passenger airlines and other aviation-related businesses, which includes the category of “ticket agents” (a statutory term for travel agents and agencies). However, before this provision can be implemented, the Treasury Secretary must consult with the Secretary of Transportation to determine the allotment of these funds (a process that ASTA hopes to be involved in).
“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,” according to ASTA’s Kerby.
Loans of up to $10 million will be made available to U.S. small business employees.
What this means: A new U.S. Small Business Administration loan program will grant loans to companies eligible under existing Small Business Administration size standards (these qualifications include bringing in less than $22 million in annual revenue or having 500 or fewer employees). These standards encompass a whopping 98% of travel agencies and include independent contractors (ICs) or self-employed advisors. What’s more, this provision includes a paycheck protection program; any expenses that fall under the business’ payroll, mortgage, rent or utility category between Feb. 15 and June 30, 2020, may qualify for part or total forgiveness.
The coronavirus pandemic has proved to be the biggest challenge ever faced by ASTA and its members. 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.
Economic stabilization loans will be lent to severely distressed sectors.
What this means: If a travel agency suffers losses as a result of the COVID-19 pandemic, they may receive a low- or no-interest loan or loan guarantee from the U.S. Treasury Department. But, there’s a catch: Businesses are only qualified for this specific relief if they “have not otherwise received adequate economic relief in the form of loans or loan guarantees provided under this act.” For example, a travel agency may not receive relief in the form of an economic stabilization loan in addition to the small business interruption loan mentioned above.
ICs and self-employed advisors may receive unemployment benefits.
What this means: If you are one of the approximately 40,000 ICs working in the travel industry and are not eligible for federal or state unemployment compensation, the CARES Act may provide up to 39 weeks of insurance benefits to you. This provision was a huge priority for ASTA given the large portion of ICs in the industry (approximately 1/3 of employees working at travel agencies are considered to be ICs).
Note to Advisors
As of press time, The CARES Act has not yet been signed into law, and things may change. ASTA is holding a members-only webinar on Friday, March 27 at 3 p.m. EST to provide advisors with analysis of provisions most likely to impact its membership. ASTA members can register for the webinar here.
The Details
American Society of Travel Advisors
www.asta.org
