The latest round of federal coronavirus aid was a long time coming and not as generous as the Cares Act passed last March, but now that it has arrived and its details analyzed, it's regarded by many in the travel agency community as a welcome step forward and, for some, a lifeline to the future.
But it's a lifeline that agency leaders say will need to be implemented by agencies with a much greater sense of urgency than lawmakers apparently felt during the nine months it took to pass the legislation.
While the $2.2 trillion Cares Act came to fruition "at lightning speed" last March, said Eben Peck, ASTA's executive vice president of advocacy, the long-awaited $900 billion package passed by Congress on Dec. 20 is, on the whole, "not as generous."
He cites a dialing back of the size of Paycheck Protection Program (PPP) loans that a business can receive, for instance. "However, having said that, there is stuff in here that for certain of our members [may be] better for them."
It includes stimulus checks, the continuation of relief programs and funding for vaccinations and testing.
The PPP portion in particular has prompted consortia to encourage agencies to look at beefing up staff now to take full advantage of the expected strong resumption of leisure travel. Even if trips may not surge until the third quarter, they point out, planning and booking begin much sooner.
"They have to think about how they prepare their agency to take on what we believe will be an onslaught of bookings, potentially," said Signature Travel Network president and CEO Alex Sharpe. "I'm really hopeful that [agency owners] will be able to really reinvest in bringing some people back.
"Our biggest risk is members who don't have the resources to ramp up to match demand, because where does that [demand] go?" he added. "Does that go to direct [bookings]? Do [clients] just not cruise? That's where I feel we really need to focus."
Roger Block
Roger Block, president of Travel Leaders Network, also expressed concerns about agency staffing levels.
"Most people are predicting that once the vaccine is readily available, the amount of pent-up demand by the American consumer is quite large," he said. "The issue is that today, most agencies have had to either terminate or furlough a good percentage of their staff."
ASTA is encouraging agencies to get in touch with accountants and banks immediately to be able to take advantage of those aspects of the new bill that are related to staffing, such as the PPP loans and the Employee Retention Tax Credit they can retroactively claim for 2020 and in advance for 2021, and to explore additional unemployment benefits.
Block said the new relief measures are coming just in time for some of his members. Like most agency groups, Travel Leaders Network reports it has not experienced the significant agency falloff that was initially feared, but "quite a few" network members appeared to be reaching the end of the rope.
"This second round of PPP really is going to be a lifeline for thousands of agencies in our network and, I'd imagine, throughout the entire United States," he said.
Alex Sharpe
Sharpe said the new measures will be especially helpful to Signature members when combined with the member-owned cooperative's next override check, coming at the end of January, and for agencies participating in Royal Caribbean Group's initiative to make $40 million available in interest-free loans.
Sharpe is encouraging agencies to leverage the capital from these programs but to also focus on fee structures as well as suppliers offering early-pay commission initiatives. That combination will help improve overall profitability and, as importantly, create revenue early in the recovery phase, he said.
Cash flow is a concern of Block's, as well. He noted that, traditionally, agencies aren't paid commission until at or shortly after the time of travel, adding that payment may take months or years to reach agencies.
To address this, Block said, the industry as a whole needs to educate lawmakers about how agencies are compensated and to ensure they are justly compensated in future relief packages. And further, more suppliers need to begin to pay commission when payments are received, perhaps giving an immediate partial commission upon receipt of a deposit and the rest at the time of final payment.
"Both have to happen, otherwise we could see a real disruption within the agency networks," he said.
Eben Peck
ASTA is confident future federal relief is coming. No one knows exactly when Congress will turn to it, but Peck estimated seeing some traction by February.
The landscape in Congress was changed by Georgia's runoff Senate elections, he said, with Democrats now in control of both the House and Senate.
That, Peck said, will be helpful in reaching agreements in Congress more quickly than in the period following the initial Cares Act.