85 Percent of U.S. Travel Agencies Won’t Survive the Year Without Aid, Trade Group Warns

One of the tourism industry’s most impacted and often overlooked groups, the U.S. travel agency trade is clamoring for federal government support to save the sector that is overwhelmingly comprised of small businesses.

This month, the American Society of Travel Advisers (ASTA) filed a Covid-19 relief request with Congress to the tune of a $9.3 billion travel agency grant program for its 14,000 member travel agencies and advisors. The filing also asks for an industry-wide Travel Employment Grant program at the U.S. Department of Treasury that is modeled on the airline Payroll Support Program.

“Thus far, financial support for the travel industry has been tragically inadequate, and especially in less visible sectors such as travel agencies,” Zane Kerby, CEO of the ASTA, said in a press release, adding that “the vast majority of the U.S.’s 130,000 travel agencies are small, female-owned businesses,” and that Congress should provide relief as long as travel restrictions continue.

The ASTA also shared that due to Covid, over nine in 10 travel agencies’ business income in 2020 was down at least 75 percent compared to 2019, and that even with relief from the CARES Act in 2020 and subsequent legislation, close to 64 percent of travel agencies surveyed laid off at least half their staff.

While having the travel industry’s least number of lobbyists in Washington, D.C. — now five as of 2021, as compared to 191 lobbyists for airlines, 63 for hotels and 21 for cruises as of 2018 — the group’s aggressive advocacy for its sector has been unprecedented, to the tune of over 100 congressional meetings and calls, 14 federal and state campaigns, and over 100,000 advocacy messages, among other efforts.

This latest relief package request also comes on the heels of the results of a recent ASTA 1,500 member survey, which revealed additional critical data and conclusions, all of which point to the urgent need for federal relief:

• An average 82 percent revenue loss in the sector
• Once travel starts to resume, it will be 8.5 months between the return of bookings and business receipts for booked travel
• Assuming access to a second paycheck protection program loan, unemployment benefits and other relief programs, more than 70 percent of travel agencies will fail in six months, and 85 percent won’t make it beyond the next 12 months.

“By the third day of January, I was already up over $127,000 in sales, and then by March, due to cancellations, I lost $350,000 in sales,” said Edouard Jean, owner of Massive Travels, Inc. and ASTA’s New York chapter president, remembering the devastation of Covid. Massive Travels will mark its 15 year anniversary as an independent travel agency this year.

Jean also praised the ASTA’s efforts in advocating for its members, as well as for other sectors that are part of the hospitality industry.

This week, the trade group addressed the rash of restrictive and unpredictable orders from the Centers for Disease Control, urging the CDC to adopt and issue clearer and uniform guidance to the traveling public, including requesting the promulgation of a rule to exempt vaccinated travelers.

Adoption of either the International Air Transport Association travel pass or other health passport efforts was also suggested, in order to allow the resumption of travel activities for those who have been tested or vaccinated.

Since Covid, travel advisors are likely to play an even more critical role in guiding leisure travelers amid Covid’s ever-shifting travel testing regulations and border closures, as well as directing the pent up travel demand towards the hospitality sector.

“Most people call me and they’re basing their decisions before they call me on misinformation, rumors, and they’re still thinking pre-Covid [,]” Jean said, noting that giving travelers facts about the different destinations’ protocols has helped them come back and book.

The trust factor of booking with an agency rather than an online platform, in case of cancellation issues, also plays a role, Jean said. “A lot of people are coming to travel advisors or coming back to travel advisors.”

According to ASTA’s consumer research, 60 percent of travelers believe that traveling in the future will be more complicated.

It would behoove Congress then, to provide economic relief to a sector which, while often eclipsed in the larger travel ecosystem of big hotels and airlines, is anything but dead and interacts with the leisure market at a granular level as a small business powered trade.