While talking about bailouts for the travel industry that rotate – and divide opinion – there is another sector of the travel industry that is struggling to make sure it is not forgotten: travel consultants.
The American Society of Travel Advisors is stepping up its lobbying and awareness efforts, including asking its members to write to their elected officials and asking for travel advisors to be considered in any financial aid package. A call to action tells members that “your elected representatives must hear from you during this time of crisis.”
Travel consultants are, of course, small businesses that play a crucial role in securing revenue for large companies such as airlines, airports, hotels and cruise ships. ASTA estimates that over 140,000 people work in the travel agency industry in the United States, with 98 percent of consultants considered to be small businesses. In addition to the 108,000 jobs created by retail outlets across the country, around 40,000 travel consultants work as independent contractors.
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The company is lobbying for this sector to be included in any sector bailout plan, noting that “a scenario in which the largest travel companies survive and recover quickly from this crisis, while the thousands of extraordinarily small companies distributing their products – your constituents – are entitled to bankruptcy is an unacceptable result. “
A poll conducted on March 6 – before the United States banned all travel substantially – estimated that 53 percent of ASTA members would go out of business in the next six months if the situation remained as it is.
Specific policy requests to Congress include “$ 7.7 billion in immediate grants to ticket agents to compensate for the reduced liquidity attributable to the virus; $ 6 billion of zero-interest loans for the same purposes; and fully funding the President’s request for an additional $ 50 billion in Small Business Administration loan finance. “A tax relief is also required, in the form of” suspension of payroll tax, deferrals, carryover of losses. “
Laurel Brunvoll, an independent travel consultant for Unforgettable Travel, received the message and is just one of thousands of consultants trying to stay afloat. “During these unprecedented times, I am working hard to stay in constant contact with cruise lines, airlines, tour companies, hotels and resorts, as well as monitoring global changes in travel requirements. I am committed to providing the best efforts to offer assistance to my customers. Not only to protect their travel investment, but also to support and fulfill their hopes and dreams of family holidays, birthday parties, anniversary moments and honeymoon wishes. “
What about cruises
One area for which travel consultants play an important role in securing the business is the cruise industry. According to the industry’s lobbying group Cruise Lines International Association, 75% of cruises are booked through an agent. This is perhaps the reason why the industry sent a message to over 40,000 travel agents last week asking them to similarly contact their elected representatives.
The message asked consultants to point out that the industry is a “viable artery” for the United States economy – claiming that it supports 421,000 American jobs – and that it has done everything possible to protect its ships. He also asked lawmakers to “avoid any excessive policy that could block the travel and tourism industry.”
This message was sent recently on March 13, the same day that the cruise industry basically suspended indefinitely at the request of President Trump. It is unclear whether the CLIA lobby effort continued after the suspension; did not answer a direct question about it.
A CLIA spokesman said: “At this point, we are focused on doing everything we can to support the more than 40,000 North American travel agents who are part of CLIA and who own and manage small and medium-sized businesses that have been significantly influenced by COVID- 19. Those travel agencies are critical to the cruise industry … we are committed to seeing them in these unprecedented times, just like our shipping companies. We ask Congress to support this critical community and we are providing travel agents with the resources they need to make sure their voices are heard too. “
Although it would help travel consultants recover a large chunk of their business, the prospect of a rescue in the cruise industry is complicated. Critics have long pointed out that all major cruise lines use a dark exemption from the internal revenue code, which means they don’t have to pay U.S. taxes on most of their revenue. The three major companies, Carnival Corp. Royal Caribbean and Norwegian Cruise Lines, are incorporated in Panama, Liberia and Bermuda respectively, despite all being based in Miami. Senators including Sheldon Whitehouse of Rhode Island I said there is no valid reason why the rescue companies have done everything to not operate in America.
That said, President Trump has now indicated a vague will to help the sector financially multiple times. However, it is argued that the cruise industry may not be able to accept this assistance. As Law 360 explained, a tax exemption would not be particularly useful for cruise lines that pay very little tax on their income in the first place. Additionally, legislators on both sides of the corridor who have historically attempted to regulate the cruise industry may not be willing to provide financial assistance without related conditions, conditions that could potentially threaten the industry’s strategy of acting not as American companies.
However, for travel consultants operating on exponentially smaller margins than cruise lines and the like, the fallout will be brutal in both cases. One simply described the situation: “This is catastrophic.”