The $1.9 trillion American Rescue Plan is a massive life raft to many travel companies, but industry groups still want more targeted relief and stimulus to accelerate a full recovery that could be years away.
Congress passed a $1.9 trillion coronavirus relief measure Wednesday on a Democratic-led, party-line vote. U.S. President Joe Biden is expected to sign the bill into law Friday afternoon.
The measure, called the American Rescue Plan, is the sixth major relief bill to clear Washington, D.C., in the last year and brings the federal government’s spending tally to $5.5 trillion on pandemic relief — more than what the U.S. spent in World War II.
The American travel sector heralded some aspects of the bill, but it also sees a key area where the package falls short of expectations with companies not receiving targeted relief.
“The American Rescue Plan contains many good features, but there’s something crucial that Congress must accomplish to restore the millions of travel-dependent jobs lost to the pandemic: extend the Paycheck Protection Program deadline through at least June, and allow another draw on those funds for the hardest-hit employers,” said U.S. Travel Association CEO Roger Dow in a statement.
The American Rescue Plan added $7.5 billion to PPP and enabled more nonprofits to apply. But it did not extend the federally backed small business loan program through the end of 2021 like many travel groups were lobbying for with members of Congress.
Hotels and other divisions of the travel industry rely on broader provisions within this and prior relief measures instead of industry-targeted funds.
This remains a sticking point with industry groups that note there are some middle-sized to large businesses, particularly in the hotel sector, that are struggling but haven’t received industry-specific aid or qualified for relief measures like the Small Business Association’s Paycheck Protection Program.
The pandemic wiped out 10 years of hotel job growth, according to the American Hotel & Lodging Association.
“Now that Congress has passed the American Rescue Plan, they should immediately turn to crafting targeted, economic stimulus legislation that provides direct support for the hardest hit industries and their employees,” said AHLA CEO Chip Rogers in a statement. “After the most devastating year on record for the hotel industry, we will need further financial assistance to retain and rehire our associates, revive our local communities, and restart our economy.”
The airline sector yet again stands out for getting one of the biggest pieces of the economic relief pie. U.S. airlines can tap into $14 billion in payroll support while airline contractors received $1 billion.
“Since the pandemic began one year ago, Congress has repeatedly stepped up to support our team members and keep critical airline infrastructure in place,” American Airlines CEO Doug Parker and President Robert Isom said in a statement. “With this phenomenal bipartisan support comes a responsibility to serve, and the people of American Airlines are excited to accept that responsibility. We are ready to welcome our customers back to the skies as vaccines are distributed and demand for air travel increases.”
The American Rescue Plan did not pass with bipartisan support, however. No Republicans in either house of Congress voted in favor of the bill.
This is the third round of industry-specific aid for the airline industry since the pandemic began.
“These men and women are the backbone of our industry, and they are an integral part of our nation’s infrastructure,” said Nicholas Calio, CEO of airline trade group Airlines for America. “It is vital to have our employees on the job and ready to assist as our nation prepares to move forward from this crisis and resume connecting communities, families and. Businesses across the country and around the world.”
Another $8 billion is earmarked for airports while Amtrak received $1.7 billion to recall furloughed workers and restore routes.
“With this support, we can restore daily long-distance service, bring back employees furloughed as a result of the pandemic and continue our progress on vital capital projects,” Amtrak CEO Bill Flynn said in a statement. “We will work closely with Congress and the Biden Administration on next steps for funding to support Amtrak’s long-term growth.”
The broader travel sector also has reason to celebrate.
The American Rescue Plan earmarks $160 billion to fight the pandemic and vaccinate individuals, a vital health and safety hurdle to clear before people are once again confident to travel in larger numbers.
Another $15 billion is included for the hardest-hit small businesses during the pandemic, which would include many travel and tourism companies.
“This is the most consequential legislation most of us will be a party to,” said U.S. Speaker of the House (D-Calif.) at an enrollment ceremony following the bill’s passage.
Help for Travel Workers
Unemployment peaked at 51 percent in the travel industry over the last year, according to the U.S. Travel Association. The hotel industry’s unemployment rate, although it fell last month to 16.5 percent, remains well above the 6.2 percent national average.
The measure also benefits the hard-hit travel workforce in two key areas. An additional $300 in weekly federal unemployment benefits runs through early September, which gives more time for travel operators to recover through the summer and — hopefully — call back more workers. There are also $1,400 direct payments to individuals making up to $75,000 annually.
The American Rescue Plan also extends the Employee Retention Tax Credit through the end of the year.
“With so much on the line, hospitality workers have campaigned tirelessly to have the representation we need in Washington, phone-banking their representatives to pass this bill and talking with millions of voters last year to win Democratic control of Congress and the White House,” D. Taylor, president of hospitality labor union Unite Here, told Skift in a statement. “Now that work is finally paying off with this historic relief bill that will help millions of Americans struggling today weather the storm.”
No Republicans in either house of Congress voted in favor of the bill due to its cost, but it is largely popular with Americans — including those who identify as members of the GOP. More than half of Republican respondents in a Morning Consult poll earlier this week did not agree with lawmakers from their own party who said the American Rescue Plan was excessive.
“This bill represents a historic victory for the American people,” Biden said Wednesday at a press conference announcing an order for an additional 100 million doses for Johnson & Johnson’s coronavirus vaccine. “There is light at the end of this dark tunnel from the past year, but we cannot let our guard down now or assume that victory is inevitable.”
While happy in some ways, the travel industry continues to argue Washington is still in survival mode when it comes to its relief measures. Eventually, these groups are going to want to see what they view as actual stimulus to encourage more people to travel.
“There is much work left to do before we can all put the pandemic behind us, but with today’s news and the steady progress being made against the virus, we have a hopeful eye on the horizon,” Parker and Isom said in their statement.
[UPDATE]: After publication, this story was updated with additional quotes from travel executives.
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Photo credit: The latest coronavirus relief package from Washington brings the price tag for overall federal economic relief to $5.5 trillion during the pandemic. GPA Photo Archive / Flickr