As the travel agency community continues to grapple with the provisions of the Coronavirus Aid, Relief and Economic Security (Cares) Act, it is also waiting to see what additional funding could come under the next coronavirus relief package.
While ASTA is spending about half its time helping members understand currently available relief options — most notably what, exactly, is forgivable under the changing terms of Paycheck Protection Program (PPP) loans — it is spending the other half lobbying for future relief provisions that would be friendly to the industry.
“It’s clear that there will be another big package,” said Eben Peck, ASTA’s executive vice president of advocacy, but what exactly it will comprise depends heavily on what could get enough votes in the Senate to pass.
The next round of relief
Senate majority leader Mitch McConnell has indicated that another relief package would be the last this year. He wants it to comprise $1 trillion in funds or less, essentially half of the $2 trillion Cares Act.
“We’re in the phase now where different members of Congress are putting out their ideas, and frankly it’s a very confusing time because there’s a lot of different things on the table,” Peck said. “It’s not clear which one is going to move. Our prime concern remains programs that will put cash in our members’ pockets.”
Among the measures ASTA supports are the Reviving the Economy Sustainably Towards a Recovery in Twenty-Twenty Act, which will make PPP loans even more flexible and create a loan program to give funding to the hardest-hit businesses for the rest of the year; the Jumpstarting Our Businesses’ Success Credit Act, which makes improvements to the Employee Retention Tax Credit; and the Explore America Tax Credit, which would give households up to a $4,000 tax credit for travel expenses through the end of 2021.
“We’ve got to get money in bank accounts, and we’ve got to stimulate demand again,” Peck said.
ASTA is also urging the Centers for Disease Control and Prevention to bolster consumer confidence in travel by setting clear safety standards across all modes of travel, prioritizing the restart of the cruise industry and prioritizing the resumption of international travel.
The Cares Act was signed into law in late March. It included several facets beneficial for the agency community, including the PPP loans for small businesses and additional funding for Economic Injury Disaster Loans (EIDL), also aimed at small businesses. Many small agencies applied for one or both of these loans.
Both programs have had their issues since introduction, Peck said. But despite some reports of small-business owners giving back PPP loans out of frustration, that isn’t something Peck has seen among ASTA members.
The same is true for Travel Leaders Network members, according to president Roger Block.
Block said he believes agencies are hanging onto the loans for several reasons. First, they need the money to keep their businesses afloat. Secondly, Congress has since passed legislation increasing the portion of the loans that are forgivable as well as increasing the payback period, making the terms of the loan friendlier.
Initially, the issues with the PPP surrounded applying for the loans and finding a bank that would take the application, Peck said. Now the industry has moved on to trying to understand how to get full forgiveness, especially under the new terms introduced by Congress.
Additionally, some agencies who got their loans early and brought back all their employees are struggling with potential furloughs since business hasn’t returned to normal, he said.
The EIDL program “has also been plagued with problems,” Peck noted, but he is hearing of more agencies receiving those loans. Congress is also pressuring the Small Business Administration to move faster in granting those loans. Peck said he believes the initial slow pace was caused by staffing and infrastructure.
While ASTA and the Travel Leaders Network haven’t seen agencies giving back PPP loans, Robert Joselyn, president and CEO of Joselyn Consulting Group, said he has heard of a few agencies doing that. Still others have put their PPP funds in savings accounts instead of attempting to have loans forgiven, where the 1% loans are drawing some interest and could be more cost-efficient in the long term than, for instance, drawing on a line of credit in the first quarter of 2021.