All but shut down by the coronavirus pandemic, the U.S. travel industry submitted a fresh list of urgent policy requests to Congress to protect the 15.8 million Americans whose livelihoods depend on travel. Among those who submitted correction and enhancements were the U.S. Travel Association, American Hotel and Lodging Association, the International Association of Amusement Parks and Attractions and others.
At the top of the list: Adding $600 billion to the Paycheck Protection Program (PPP), expanding eligibility to small businesses that were previously left out and ensuring loan forgiveness can cover both payroll and other operating expenses during the shutdown.
A key example of small businesses that were unintentionally excluded from the PPP under the CARES Act: local and regional destination marketing organizations (DMOs), whose work is crucial to driving travel and tourism business.
"The CARES Act was an ambitious step, but now the urgent problem is that assistance is simply not getting where it needs to go," said U.S. Travel Association president and CEO Roger Dow. "Major adjustments and more aid are needed immediately to support small businesses, including local non-profits that are essential engines of the travel economy that employs one in 10 Americans."
The latest economic data prepared for the U.S. Travel Association by the analytics firm Tourism Economics indicates that travel in the U.S. has a long way to come back: Weekly travel spending in the U.S. has fallen 85 percent from the same point a year ago. That puts the economy squarely on pace to lose 5.9 million travel-related jobs by the end of April—which is more than one-third of the travel-supported workforce.
The policy measures proposed by U.S. Travel include new relief as well as some corrections to the provisions of the CARES Act. Among them:
- Expand eligibility for the Payroll Protection Program to DMOs that are classified as 501(c)(6) non-profits or "political subdivisions" of their local governments, as well as to small businesses (fewer than 500 employees) that operate multiple locations.
- Appropriate an additional $600 billion for the PPP and extend the coverage period through December 2020. The PPP is currently slated to expire on June 30—the economy will not realistically be in recovery by then—and the initial round of funding is expected to run out in just a few weeks.
- Revise the PPP maximum loan calculation to eight times a business' monthly outlays and allow it to cover both payroll and non-payroll expenses. Currently the formula is two-and-a-half times and covers payroll only, not other expenses.
- Provide loan forgiveness to large businesses under the Exchange Stabilization Fund (ESF), rather than just loan guarantees, and clarify ESF eligibility for 501(c)(6) non-profits.
- Increase Economic Injury Disaster Loan (EIDL) funding to $50 billion, raise the loan cap from $500,000 to $10 million and allow a second EIDL if a business is still unable to meet its ordinary expenses.
"Congress must move swiftly to correct and supplement the CARES Act with additional rounds of aid," Dow said. "Travel-related small businesses will be vital leaders of an economic recovery, but first they need to survive until the point when travel demand returns."
This article originally appeared on www.travelagentcentral.com.