Jay Ellenby, president of Safe Harbors Business Travel in Bel Air, Maryland, and former American Society of Travel Advisors (ASTA) board chair, testified on behalf of the organization and travel advisors in front of the House Committee on Small Business to provide insight on how the pandemic is affecting agencies.
"The only thing that this compares to is 9/11," Ellenby said. "This is a significant impact on the industry."
Ellenby presented results from a recent survey from ASTA that gauged the effects of COVID-19 on travel agencies. The organization received responses from 1,359 member company representatives and a majority (52 percent) of agencies reported a heavy negative impact from the virus. Only 3.2 percent said that their agency was experiencing no impact. Forty-five percent reported a moderate negative impact.
Ellenby also noted the heavy price that travel agencies are paying due to the coronavirus and referenced the impact on his own agency, Safe Harbors Business Travel in Bel Air, Maryland.
"As of today, our 2020 sales are down 20 percent year-over-year. We are seeing a 37 percent decline in international travel, and that is worsening by the day," said Ellenby. "We expect March to be devastating and are preparing for sales to be down by far more than 20 percent year-over-year.
"For April, we can only hope. We are having to start painful internal conversations about staff structure and size," Ellenby added. "And it's worth noting that while Safe Harbors falls under the SBA small business definition, we are considered 'big' for the industry - smaller firms are likely seeing similar numbers but many may lack the cash reserves to weather this storm."
During his testimony to congress, Ellenby presented ways in which Congress could assist travel agencies with small business loans, economic stimulus and "do no harm" policies.
He asked that congress keep a close watch on the allocation of small business loans provided for in the Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (H.R. 6074).
"After 9/11, small business travel agencies across the country received at least $20 million in loans of this kind, and judging from current trends there will likely be heavy demand for them this time around," Ellenby said in his statement. "This demand will only increase if the crisis drags on…Travel agencies will need help to weather this storm and be in a position to serve clients once the economy rebounds. We also ask that you and the SBA consider relaxing some of the collateral requirements for these loans, as travel agencies are service businesses and don't have as many physical assets as, say, manufacturers."
Ellenby also expressed support for a one-year payroll tax cut and tax relief to the cruise, travel and airline industries.
"Travel spending tends to be discretionary and one of the first things cut from a family or business budget, but it is what our industry is built on," he said in his statement. "Anything that will stimulate travel will be especially important and should keep in mind the needs of the thousands of U.S. small businesses that power the travel industry and not simply focus on the largest companies in this space."
Ellenby also encouraged Congress to enact "do no harm" policies.
"As you consider legislation related to these issues in the coming weeks and months, please keep in mind the needs of small business travel agencies and the impact of federal regulations on our operations," he noted. "As with most industries, the smaller the business the less likely it is to have in-house lawyers to help it comply with complex and ever-changing rules."
In his statement, Ellenby also urged Congress to pass the Trusted Traveler REAL ID Relief Act (H.R. 5827) to prevent chaos at airports come October when the REAL-ID takes effect in order to prevent even more negative impact on travel businesses.
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