U.S. Travel Says to Call on Congress in Supports of DMOs

While the CARES Act contains a number of hard-fought provisions to provide essential and immediate aid to the travel industry, the U.S. Travel Association says one emerging problem is with the distribution of funds, specifically in relief for destination marketing organizations (DMOs) with a 501(c)(6) tax designation.

Though regional businesses of all sizes are eligible for CARES Act provisions, U.S. Travel says DMOs are essential in driving customers to these businesses and any relief package is incomplete without targeted support for destination marketers. The 15.8 million travel-related jobs in every pocket of America are dependent on the efforts of these organizations, it adds.

501(c)(6) DMOs are eligible for Small Business Administration (SBA) disaster loans of up to $2 million and the Treasury Department’s Exchange Stabilization Fund, which will also be distributed in the form of loans. However, these organizations are not eligible for the SBA’s Paycheck Protection Program (PPP), which provides loan forgiveness for payroll costs, group healthcare benefits and other operations expenses (like interest on mortgages, rent and utilities) through June 30.

The issue: For nonprofits such as 501(c)(6) DMOs, the loan forgiveness aspects of PPP are critical. If a DMO’s only survival option is to take on loans, every dollar that’s spent repaying those loans over the next few years will be one dollar less that’s spent on supporting the economic recovery. And, just like all others businesses, DMOs are suffering from revenue declines and are being forced to lay off workers

The U.S. Travel Association adds that these are the exact workers the CARES Act sought to protect and support—but even with immediate relief, their jobs will continue to be in peril.

Via its Power of Travel Coalition, the U.S. Travel Association created a call to action, which you can send to Congress.

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