The American Society of Travel Advisors (ASTA) is pleading with Congress to address the needs of travel-dependent business that are struggling due to the continued COVID-19 pandemic before it wraps up its session ahead of the holidays.
“Each new coronavirus variant brings with it new recovery-crushing travel restrictions and on behalf of the American Society of Travel Advisors (ASTA), I urge you to use any appropriate year-end legislative vehicle restore the Employee Retention Tax Credit (ERTC) for at least the fourth quarter of 2021,” said Zane Kerby, president and CEO of ASTA, in a letter to members of Congress. “Simply put, without the ERTC or equivalent relief, many travel agencies across the county may not survive the latest setbacks.”
Kerby notes that recovery for travel agencies has been “painfully slow,” with average revenue levels down 71 percent compared to 2019 levels (according to an ASTA member survey). In addition, the average travel agency has laid off more than 40 percent of its staff. Each of these still considers relief programs like the Coronavirus Aid, Relief, and Economic Security (CARES) Act and its successor legislation.
“While early relief programs provided some breathing room for travel agencies, the assistance was untargeted, modest and short-lived,” he said in the letter. “This was further exacerbated by the early termination of the ERTC in the Infrastructure Investment and Jobs Act (P.L. 117-58). Without additional federal relief, our industry faces the prospect of continued agency closures and consolidation, mass layoffs and termination of independent contractor relationships.”
The Employee Retention Tax Credit is a major focus of ASTA’s. Kerby said that with Paycheck Protection Program (PPP) funds “decimated,” agencies were relying on the ERTC (which provided a refundable tax credit equal to up to $7,000 per employee per quarter) as they made rehiring decisions. “Ending the ERTC early – in the midst of an extraordinarily challenging business environment – freezes the process of rehiring furloughed employees, will lead to additional rounds of layoffs and increase the chances of further agency closures and consolidation,” Kerby said. He also noted that people will be faced with a “much less generous system of unemployment benefits than was the case in mid-2020.”
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