The travel industry is currently taking a huge toll, and as a result, travel advisors are facing unprecedented times. The American Society of Travel Advisors (ASTA) is fighting to help travel advisors come out of this stronger, and is currently working to help get you funds during this time that many of your businesses are at a halt.
“Travel demand is extraordinarily suppressed; we’re look at numbers in the 90-97 percent demand suppression rate—which is obviously an enormous challenge for our business,” says Zane Kerby, president and CEO of ASTA. “There have been enormous furloughs, layoffs in our travel sector.”
During a media call with ASTA executives today, Kerby said that ASTA is currently focusing on three fronts to help advisors get the help they need.
First, they’re working with government. “ASTA has enormous resources working on the government side. With the CARES Act being passed there are extraordinary problems with the money that is being distributed. We have asked our entire advisor community to petition congress to help fix what is wrong with the Act right now,” he said. “Speaking to the Small Business Administration, it was not be prepared to administer the programs that are currently put into law by the CARES Act. We’re quickly trying to fix what’s wrong with the distribution of funds from the CARES Act, as well as pushing into Round 4—additional legislation that will hopefully continue to shore up the economy in this very difficult time.”
Second front they’re working on, Kerby said, is with the supplier community. “We had a policy change announced on Tuesday that’s very welcomed news for ASTA and something that we had requested of the airline community,” he noted. “It’s really good to know that travel advisors are going to be held harmless in regards to COVID-19 chargebacks or they’re not going to be stuck between a consumer who wants a refund from a credit card company, and being the ticket agent that is responsible to the airline for that money.”
ASTA also sent out a notice this week to its members in regard to a concern they’re hearing from their advisor members. “There’s been a growing chorus of our members who have noticed that some tour operators are not acting responsibly or acting with a very short-term mindset. We understand the cash crunch that everyone is under, but they’re holding on to customer deposits and only offering future credits. And, in some instances, they’re going against the policies they have in their own books and, in other cases, running afoul of state or federal law,” said Kerby.
“We are seeing some suppliers making retroactive changes mid-course to their refunds and commissions policy,” said Mark Meader, senior vice president of industry affairs & education at ASTA. “Our statement asked the travel suppliers around the world to do the right thing when cancellations occur that are not issued by the traveler and ensure that travel components are fully refundable not just taken care of with Future Travel Credit or vouchers. We would also like the suppliers to honor the original agency commission if the travel is rebooked. If the travel is refunded, perhaps a partial commission payment could be made. We’d like the supplier community to honor agency commissions of the time of deposit and/or the time of final payment. We’ve also asked that the suppliers ensure there’s no time limit on credit—no time limit would be ideal—but at least that credit should be good for two years,” he added.
“We sent out communication last night that we worked closely with our consortia partners to craft. We are calling on the tour operator community to act responsibly in these times,” added Kerby.
The final aspect that ASTA is focusing on now is working with travel advisors to collect the stories from members who have gone above and beyond during this time. Kerry mentioned they’ve received hundreds and hundreds of stories from advisors, and the ASTA team has selected 50 stories where their members sprung into action. “The ASTA advisor skill in navigating a complex travel ecosystem is always top drawer,” he said. “But the pandemic crisis highlighted some of their great work, the ability for them to traverse not only the changing supplier policy, but the closing borders, and cancelled flights.”
Where is the Money?
“It’s been hard to watch our members go through what they’ve been going through,” said Eben Peck, executive vice president of advocacy for ASTA. “Obviously, this is unprecedented, and it’s unprecedented as never having gone through anything like this on the advocacy side. On the CARES Act, it was an unprecedented two-week-long lobbying scramble with every industry under the sun trying to get relief,” he said.
“I think we did a pretty good job with what we had. We’ve been spending a tremendous amount of time helping members apply for various programs, whether it’s the Paycheck Protection Program (PPP), FDA Emergency Economic Country Disaster Loans through the Treasury Department, unemployment benefits—that has been a real focus of ours in the past few weeks,” said Peck.
“States were just utterly unprepared for the influx as well as not having any procedures in place to process applications for these non-traditional applicants.”
—Peter Lobasso, Senior Vice President and General Counsel, ASTA
“In a perfect world this would be a sequential lobbying process, when you lobby on round three, and work on the implementation issues, then you move on to round four,” explained Peck. “But it’s been such an unprecedented, chaotic and messy process, that Congress is going to have to revisit round three because there have been a lot of problems with these various programs.”
Peck explained that the PPP (Paycheck Protection Program) is essentially out of money at this point—”$349 billion gone in about a week and a half. Our members who have not been able to apply, can’t at this point. The Emergency Disaster Loan program is also out of money. We saw reports of them rationing the amount of grants it was giving out. So that has run dry as well,” he said.
“In reference to the Small Business Administration (SBA) program, one of the attractive features of the program was the $10k advance provision, which basically said that for any business that’s eligible, in this case it’s 500 or fewer employees, they could borrow up to $2 million and that money could be used to cover the operating expenses of the business such as the payroll or mortgage and rent payments,” explained Peter Lobasso, senior vice president and general counsel for ASTA. Companies would then have up to 30 years to repay that money. “There were a few aspects that were more favorable [in that program] than for PPP, although they didn’t have the forgiveness provision. Unfortunately, one of the most attractive things about it was the $10,000 cash advance, and every applicant was to receive $10,000 within three days of submitting the application,” he added. “Technically it was a grant, because it didn’t have to be repaid, even if the loan application was ultimately denied. So it was a really great thing, especially for our smaller travel agency members, and everyone in the larger travel community.”
Lobasso added, “We learned earlier this week that the FDA has actually established a limit on the $10,000, and the way it works now is only those employers that have at least 10 employees will be eligible for the $10,000 dollars. Everyone else is going to be limited to $1,000 per employee on their payroll. So what was once a pretty attractive provision as far as getting a quick infusion of cash to our smaller members is now far less attractive. So we’re hopeful that Congress will see fit to fund that program more substantially so that people can actually get something that is much more useful and valuable for them to get through these very difficult times.”
“We are asking that funding be renewed for both programs—and asking that some of the major kinks, especially with the PPP, be worked out…so that’ll be the focus for next week to week and a half,” said Peck.
“In many ways the intent of Congress, with regards to the CARES Act, is not entirely being fulfilled.”
—Eben Peck, Executive Vice President of Advocacy, ASTA
In the fourth round, Congress is expected to address the kinks that have been found in round three. “Congress is out, social distancing themselves, until May 4,” said Peck. But, “some work will be done on round four before then.” However, he said, “Congress took really decisive, unprecedented action to provide support to businesses of all sizes; it’s been helpful, it’s just not enough, more needs to be done,” he added.
In regard to unemployment benefits, one big feature of the CARES Act was expanding unemployment to Independent Contractors (IC) and those who are self-employed. “Expanding this pandemic unemployment relief to a large number of individuals,” Lobasso said, “who were not eligible before for unemployment benefits is done at state level, but because certain workers under the CARES Act, who never had access to these benefits, now do, what we are seeing—and we’re getting reports from all over the country—is that the states don’t have processes in place to process these claims for these non-traditional workers. Adding to the complexity in many cases is that these state agencies are working with a much smaller workforce due to COVID-19, and you have an overwhelming number of applicants—far higher than we’ve seen in many years—all at the same time, so it’s almost like a perfect storm. So it’s not surprising that very few states are prepared for this.”
He added, “Obviously it’s causing a great deal of frustration for our IC community. We are doing everything we can to assist—we are essentially going on all the state labor agency websites on a daily basis and updating our members as soon as we have guidance.”
“States were just utterly unprepared for the influx as well as not having any procedures in place to process applications for these non-traditional applicants. It’s a very difficult situation, and we’re hoping that’ll change fairly soon—it’s been quite a struggle up until now.”
Lobasso mentioned that Michigan was the first state that went live yesterday with the ability for Independent Contractors to apply.
Peck added that, “In many ways the intent of Congress, with regards to the CARES Act, is not entirely being fulfilled. PPP loans open to everyone up to $10 million, emergency loans, $10,000 advance up to $2 million, unemployment benefits for independent contractors, and the self-employed…in several ways it’s not working as intended, that’s why we are encouraging them to go back to it immediately.”
Lobasso said ASTA is doing a lot to help advisors navigate these murky waters. “We have been working nonstop trying to get as many resources available for members as possible—fact sheets, weekly webinars on programs available and what you need to do to apply, a member portal set up where members can submit questions for us to respond,” he said. “We are committed to holding their hands and giving them guidance.
“One of frustrations is the information we can disseminate is limited to what we know,” added Lobasso. “This is fluid and things are changing. We are staying on top of it, sending daily e-mails on what changes they need to know. We have created an enormous number of resources.”
Meader explained the measures the airline industry is working on to help advisors regarding refunds for air tickets. “Airlines Reporting Corporation (ARC) announced they’re making changes to its policy and procedures. Specifically ARC won’t take action in flights that were cancelled by an airline or by a government due to COVID-19, and won’t take action in other debit memos related to passenger confrontation disputes because of COVID-19. ARC isn’t going to hold agencies liable for these payments nor their accreditation status. This doesn’t mean an airline might not issue a debit memo, but it means that ARC is not holding agencies liable,” he explained. “In addition to that, they’re also explaining what they call the ‘Ticket Mitigation Service,’ a grace period moving from what was 15 days prior to 45 days. What this means is that travel agencies and airlines have more time to resolve open debit memo issues.”
Lastly, they’re suspending their ARC Pay from the amount of travel agent service fee/ chargeback fee for an interim period, noted Meader.