As the government takes action on a relief package for the travel industry, Travel Leaders Group, the largest travel agency organization in North America, is requesting immediate assistance for the tens of thousands of travel agency businesses around the country in danger of shutting down. Without the survival of this essential element of the distribution channel, a travel industry recovery would be next to impossible, the company said.
Noting that the financial impact from this event on travel will dwarf any downturn in recent history, Travel Leaders Group CEO J.D. O’Hara sent the urgent request to government leadership asking for a relief package for travel agencies, many of which are small businesses. This includes cash flow replacement grants of $10 billion and no-interest loans or loan guarantees of at least $20 billion in order to pay workers, benefits, creditors and various other assistance.
With more than 4,000 employees and a U.S. network of more than 50,000 travel advisors, Travel Leaders Group’s collection of businesses account for approximately $20 billion in annual travel sales.
Without immediate intervention, travel agencies and travel management companies (TMCs) that support millions of consumers and corporations are in danger of a broad failure. Travel Leaders Group estimates that, through mid-March, transaction have declined by 60-90 percent and are worsening as more countries close borders.
It is a general misconception that everyone books their own travel directly with travel suppliers and through online travel websites. In 2019, travel agencies sold more than $76.5 billion in airline tickets covering more than 302 million passenger trips. Travel agencies sell over two-thirds of cruises and 68 percent of tours, according to research consultancy Phocuswright. There were nearly 13 million annual cruise passengers from U.S. ports in 2018.
“The interconnected travel industry is in serious peril if all of its elements are not included in a relief package. A workable package must include travel agencies and travel management companies (TMCs),” O’Hara stated.
In order to combat this unprecedented economic collapse, the company is requesting that the government provide working capital to replace massive losses of cash flow and create liquidity for travel agencies for the unknown period of time for which travel businesses will remain severely depressed.
Outside of the letter, O’Hara noted, “Travel advisors have been a lifeline for business and leisure travelers who have found themselves stranded as flights are cancelled and borders are closed, helping them find a way home. Our people have been working around the clock to assist travelers with rebookings and cancellations, while navigating through the ever-changing policies and conditions,” he said. “They have been caring for their clients, while cutting back on expenses and trying to manage cash flow to save their businesses.”