Coronavirus’ Effect On U.S. Travel ‘Worse Than 9/11’
Travel-related businesses, particularly those in Florida, have taken a hit from coronavirus and the safer-at-home policies put in place.
Congressional leaders are now working with the USTA to expand relief efforts to help the embattled industry recover.
Eighty House of Representatives members sent a letter last week to the Speaker of the House and Minority Leader that focused on helping destination marketing or management organizations, also known as DMOs.
“They're basically the organizations that promote travel and tourism to an area, to bring conventions to an area, [and they] will be very involved like in [the] Super Bowl or the Final Four,” said Roger Dow, President and CEO of the U.S. Travel Association. “Their whole role is to get more tourism and more meetings and conventions to come to a city.”
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“People just think of travel as people coming to a meeting or coming on vacation,” said Dow. “But it's when people decide whether they're going to go to a school, they visit there, they're going to decide to buy a second home or move somewhere they visit there first. So travel is the front door to economic development.”
According to the Association’s 2019 Annual Report, 8.9 million jobs nationwide were supported directly by travel. In addition, the industry brought in $2.5 trillion in economic input.
“Of the 22 million unemployed, 8 million of those people, or 36%, come from the travel industry,” said Dow. “One in 10 Americans get their jobs from travel.”
Before the coronavirus hit, Dow said the DMOs were having the best years they ever had. But now, “they’re basically running out of money or totally out of money.”
“They're gonna need some money to get America moving again,” said Dow. “We’ve done a lot of research. Normally when there's a crises like September 11, SARS...it takes the industry a year to two years to recover, and this is worse than September 11.”
The Association has also been studying the effects of coronavirus on travel.
The Association also tracks weekly figures for each state. During the week of April 11, Florida had a 90% drop in weekly travel spending compared to the same week a year earlier, a net decrease of $1.863 billion.
The lack of cash for DMOs has caused many furloughs and layoffs in the industry.
While some smaller travel and tourism-related businesses can obtain help through the CARES Act and its Paycheck Protection Program, DMOs can’t because they are considered non-profits.
“[So] someone has a tour business where they take people out on kayaks and all that and they can apply and keep their people on...but the DMO can't,” said Dow. “So the biggest thing that they need right now is the ability to pay their people.”
DMOs are included in other provisions of the CARES Act, but according to Dow, structural changes should be made to it to help with some of the money issues.
He said it is important to change how DMOs are limited in their loans and the rate at which funds can become available, which are currently not coming in fast enough.
“We estimate for every month we can bring travel and tourism back more quickly, it's $25 billion and 300,000 jobs,” said Dow.
One other advantage for the industry may be that Dow has been named to President Trump’s recovery task force.
Businesses and others in the travel and tourism industry seeking help, are encouraged to visit the U.S. Travel Association’s website.
“This is the lifeblood of travel and tourism for hundreds and hundreds of cities around America,” said Dow. “And cutting these people off and putting these people out of work, when we're trying to bring travel back, they won't have the people and they won't have the cash to do it.”
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