Leaders from the U.S. travel industry submitted to Congress and the administration policy requests for the next coronavirus relief package, citing concerns that the sector will remain depressed even after recovery begins.
The slate of proposals includes measures to help travel employers survive the worst of the downturn; assistance with health-related necessities such as robust sanitation and personal protective equipment; and, eventually, incentives to get Americans safely traveling again when a reopening is fully possible.
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Before the pandemic, one in 10 American jobs were supported by the travel industry, but since the outbreak more than half of the 15.8 million people working in the related roles have lost their jobs. Infection spikes and rollbacks on reopening plans are likely to delay any rebound, the petition claimed.
What Travel Workers Need
“You name it, this industry and its workers need it,” said U.S. Travel Association President and CEO Roger Dow. “Travel businesses could not possibly have prepared for this level of catastrophe, and there’s no telling how many of the 8 million jobs we’ve lost so far will remain gone for good without aggressive federal intervention to keep the industry on life support. Travel companies have worked hard to retain their workers, but most have had zero revenue coming in for four months now, and if they’re forced to close they won’t be around to rehire anybody even when travel is able to resume.
“Our asks of Congress are big because the problem is massive, and is only growing right before our eyes.”
Travel industry legislative requests include:
- Extend the Payroll Protection Program until the end of the year; expand eligibility to destination marketing organizations—both nonprofit and quasi-governmental entities that conduct economic development; increase the amount of the loan; and allow for a second loan. In any transition to a longer-term solution, DMOs and other nonprofits should be included.
- Provide up to $10 billion in federal grants to promote safe and healthy travel practices, which are crucial to the resumption of travel.
- Provide temporary and targeted liability protections for travel businesses to reopen.
- Create temporary tax credits and deductions, including: a tax credit to encourage Americans to travel at the right time; a tax credit to restore activity in the business meetings and events sector, including conventions and trade shows; increase the deductibility of business and entertainment expenses; and a tax credit to help businesses of all sizes offset the cost of mitigating the spread of COVID-19, including the cost of structural barriers and personal protective equipment.
- Enhance the Employee Retention Tax Credit to increase business’ ability to retain and rehire workers.
- Support airports.
Dow emphasized that government action alone will not speed recovery along. “In order for jobs to be able to return, everyone needs to be wearing masks in public,” he said. “It is so very clear that masks and other good health practices are absolutely critical to dissipating the health crisis and making an economic rebound possible. The country’s collective record on this needs to improve, or the pain will only go on longer.”
Ongoing Downturn
After some positive signs of recovery, national weekly travel spending fell 10 percent during the week ending July 11 compared to the previous week, which included the Fourth of July holiday according to the U.S. Travel Association. Even car trips, which had been driving much of the domestic travel market, fell “precipitously,” down about 18 percent from the previous week, while air travel remained roughly the same.
According to a weekly survey from Destination Analysts, the percentage of people planning travel this fall declined to 36 percent for the week of June 12, down from 50 percent in early June. Meanwhile, Harris Poll figures from Harris Insights and Analytics show that:
- 58 percent of leisure travelers say they will substitute vacations with staycations for the remainder of the year.
- While 43 percent say they miss flying on a plane, only 37 percent say they feel safe flying right now.
- 74 percent of business travelers are more likely to substitute business meetings that require flying with virtual meetings for the remainder of the year.
- More than three-quarters (77 percent) of respondents support states enacting mandatory 14-day quarantines for out-of-state travelers from states with a high resurgence of COVID-19.
In total, the COVID-19 pandemic has resulted in almost $285 billion in losses for the U.S. travel economy, according to the latest forecast prepared for the U.S. Travel Association by Tourism Economics. Through the end of 2020, the report estimates $505 billion in losses for the travel industry for a total of $81 billion in lost federal, state and local taxes by the end of 2020. The travel industry is not expected to recover until 2024.
Small Business Comeback Act
In addition to the help being requested by travel industry leaders, Reps. Filemon Vela (D-TX) and Lance Gooden (R-TX) are looking to establish a fund that would provide stability to American businesses.
The Small Business Comeback Act would complement business assistance provided under the Coronavirus Aid, Relief and Economic Security Act, and provide streamlined and tailored federal support for small businesses most affected by COVID-19. “This bill seeks to fill the gaps of previous legislation by providing immediate relief in the form of flexible grants to establishments in need,” Vela said. Relief is targeted to help establishments retain and rehire employees, maintain worker benefits, and continue or resume economic activity. According to a statement on Vela's page, the Comeback Act includes "strong antiabuse protections" and would prioritize support for businesses that serve low- and moderate-income communities as well as women- and minority-owned businesses.
The American Hotel & Lodging Association has already expressed support for the Small Business Comeback Act.