The vast majority of travel agencies, more than 86%, predict they will have to close their doors within one year without additional federal funding, according to a survey just released by ASTA.
The survey was fielded to members Aug. 4 and 5. Of the nearly 1,200 respondents, only 13.6% said they could keep their doors open for more than 12 months considering the current uncertainties and their cash reserves.
Citing more than 90% of members reporting revenue down 75% or more compared to the prior year, ASTA CEO Zane Kerby said, "It cannot be overstated -- these are incredibly difficult times for travel agencies across the country."
Congress is currently debating what the next federal relief package will look like. The last package, the $2.2 trillion Cares Act, contained several relief measures favorable to agencies, including the Paycheck Protection Program and unemployment for independent contractors. But as the coronavirus crisis has dragged on, it has become clear that more financial support is needed by the hard-hit segments.
"Without additional relief from Congress and the federal government, these negative trends will continue, and widespread agency closures will become the norm," Kerby said. "An astonishing 71.3% of travel advisors will be out of business in six months or less without additional relief. This would leave travel suppliers' main distribution channel crippled, and the traveling public left without access to the critical services that travel planners provide."
ASTA's survey found that, among respondents, 15.8% would be forced to close their agency in six weeks or less; 24.3%, in three months; 31.2%, in six months; 15.1%, in 12 months; and 13.6%, in more than 12 months.
The travel agency community is also in a precarious position because of the lag time between bookings and receipt of commissions. The majority of respondents (43.8%) said that lag time is between six and 12 months.
Additionally, 75% of respondents have laid off or furloughed at least one employee and 43.1%, have laid off or furloughed three-quarters of their staff or more.
Kerby called on legislators to include measures to help travel agencies in the next relief package.
Specifically, ASTA is asking that travel agencies are deemed eligible recipients of any airline payroll support funding. The Society also supports the RESTART Act. It would increase flexibility around PPP loans, would create a long-term, forgivable loan program to help the hardest-hit businesses, and would extend expanded unemployment benefits for employees and ICs through the end of the year.
Kerby encouraged travel advisors to use ASTA's online advocacy portal to get in touch with legislators, urging them to include travel advisor-friendly measures in the next relief package.