The American Society of Travel Advisors (ASTA) has named its priorities for “Round 4” of coronavirus (COVID-19) relief. Chief among the requests are the expansion of the Payroll Protection Program (PPP), additional funding for ticket agent loans and the Emergency Economic Injury Program, enhanced support for employees of larger businesses and airline customer service commitments.
“While we understand that many industries are facing critical challenges right now, we view a scenario where the largest travel companies survive this crisis while the thousands of overwhelmingly small businesses that distribute their products are allowed to fail is an unacceptable outcome,” ASTA said in a statement.
Here’s a breakdown of what ASTA is seeking in the next round of aid:
Expansion of Payroll Protection Program
Noting that “the program has provided a critical financial lifeline to those of our member companies who have successfully been able to apply,” ASTA’s top concern is that the program’s funding will quickly be depleted; that the last-minute rules put in place by the Small Business Association (SBA) make the loans less attractive to both borrowers and lenders; that parameters of the program leave both larger and smaller travel agencies without relief; and that the “hire-back” provisions incentivizes adding to payroll at a time when business remains at a standstill as opposed to when business is expected to return later this year.
Among others, ASTA is recommending the following changes:
- Increase the employee cap for PPP eligibility to 2,000, increase the funding ceiling to $750 billion and extend the program through December 30, 2020
- Increase the maximum loan threshold from 250 percent of monthly payroll to 400 percent of all business expense and increase the loan terms to at least five years by SBA, giving businesses more affordable payments and time to pay the loans back
- Clarify whether travel agency payments to independent contractors (ICs) count as “payroll” for the purposes of PPP loan amounts
- Treat ICs and the self-employed equally and not force them to the “back of the line,” as the current week-long application gap between free-standing businesses and ICs will do
- Increase loan forgiveness provisions from eight to 12 weeks and allow the “forgiveness clock” to begin at the borrower’s discretion based on business conditions as opposed to the date of loan origination
- Open the program to 501(c)(6) non-profits, so that ASTA and other travel industry trade associations and destination marketing organizations can participate
Additional Funding for Ticket Agents
Under the CARES Act, the Treasury Department is authorized to make up to $25 billion in loans and loan guarantees to air carriers, eligible businesses performing inspection, repair, replace or overhaul services, and ticket agents. Unfortunately, ASTA says, there is “no way of knowing how much of this $25 billion will be set aside for travel agencies as opposed to airlines or repair stations.” As such, it adds, ASTA is requesting that Congress provides more funding to extend loans to ticket agents.
Additional Funding for Emergency Economic Injury Program
While the $10 billion grant program that provides small businesses with “quick, much-needed capital,” it was quickly overwhelmed, ASTA says.. The SBA has capped emergency grants at $1,000 per employee and limiting total loan amounts to $15,000 (a fraction of the maximum $2 million the program promises). ASTA is requesting that at least another $50 billion be put into the program.
Enhances Support for Larger Businesses
ASTA supports amending the CARES Act to provide the Treasury Department’s Exchange Stabilization Fund loan forgiveness that mirrors PPP loan forgiveness, enabling mid-size and large businesses to obtain up to three months of loan forgiveness for employee retention and basic expenses. Currently, ASTA says, the CARES Act only allows the Federal Reserve to make direct loans on a widely available basis with strict credit and financial solvency requirements.
Airline Customer Service Commitments
As many difficulties flow from airlines’ inflexible refund and rebooking policies, ASTA is requesting that, in the wake of the financial assistance being provided to the airline industry through the CARES Act, Congress take the opportunity to require (among others) that airlines to do the following:
- Refrain from issuing agency debit memos for credit card chargebacks on canceled flights/trips for which the airlines are refusing refunds today
- Ensure all tickets on flights canceled by the carrier be fully refundable and not merely credited for future travel, if such refund is requested by the consumer
- Permit travel advisors to process all refunds via their Global Distribution System and/or the Airlines Reporting Corporation
- Protect original agency commissions/incentives on air bookings should the tickets be exchanged, rebooked or refunded
- Ensure that ancillary fees for any flight booked in 2020 that is subsequently cancelled are fully refunded to the traveler