The U.S. Travel Association called for immediate changes to the Cares Act, saying that many travel businesses will not survive the Covid-19 crisis if nothing is done. 

In an interview, U.S. Travel executive vice president of public affairs Tori Emerson Barnes said the current act is too limited in scope and funding to do what Congress intended -- keeping travel businesses whole.

Barnes said the Trump administration could make changes today without further legislation. For one, she said it could allow businesses to use a higher percentage of loan money for operational costs. Right now, companies are eligible for full loan forgiveness only if they use 75% of the loan money for payroll. 

“Quite frankly, our businesses don’t have customers right now,” Barnes said. “We don’t have revenue coming in. We need the loans to be able to pay the broader costs.” 

Barnes said that with 60% of a hotel’s costs being fixed, “we can’t just be looking at just the payroll piece. We need to ensure there are businesses for folks to come back to.” 

U.S. Travel is also opposed to the current requirement that businesses must bring back employees within 10 days of getting the loan.

“For the next four weeks at a minimum, our businesses aren’t going to be able to take in customers,” she said. “It doesn’t make sense” for businesses to use loan money to bring back employees when there is nothing for them to do, “especially when there’s such a robust unemployment benefit.”

Legislatively, U.S. Travel is calling for Congress to add $600 billion to the Paycheck Protection Program (PPP) and to extend loan forgiveness through December.  

“The current loan program assumes we are up and back in business in June, and it’s not looking like that will be the case,” Barnes said. “These businesses through no fault of their own don’t have customers, and if we want business to survive then they’re going to need help.” 

U.S. Travel is also calling for benefits to extend to destination marketing organizations (DMOs), which are not eligible because of their specific nonprofit status. 

“These folks are being hit just as hard as the rest of the travel and tourism industry, and we know they need access to the PPP loans,” Barnes said.

Good intentions

Barnes said the intent of the Cares Act was good and that there is “broad recognition and an attempt by Congress to really help businesses.”

“Unfortunately, some of these constructs just don’t take into account some of these businesses that have absolutely no customers,” she said, adding that those constructs make sense for businesses that are open and operational, such as tech companies or those that sell online, but are “not in the dire straits our businesses are.”

Barnes said it is important to remember that we are “still very much in the relief phase.” 

“If we don’t have robust businesses, then it will take even longer for the country to recover,” Barnes said. “Our industry will be in a critical position to help shorten the recovery. Without the relief we need now, it will just elongate the process.”

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