The American Society of Travel Advisors (ASTA) hosted a panel of travel CEOs to discuss the industry recovery and the challenges faced by advisors as well as the opportunities ahead for the community as a whole.
In honor of ASTA’s Legislative Day, taking place in Washington, D.C., May 18-19, Zane Kerby, president and CEO of ASTA welcomed five panelists: Olga Ramudo, president and CEO of Express Travel; Alex Sharpe, president and CEO of Signature Travel Network, Jennifer Wilson-Buttigieg, co-president and owner of Valerie Wilson Travel; Jackie Friedman, president of Nexion; and Matthew D. Upchurch, CEO of Virtuoso.
After a year of navigating the crisis of the pandemic, Kerby and the panel reflected on the extraordinary loss the travel industry has endured, and they shared their thoughts on how to move forward.
In his opening remarks, Kerby noted that not much has changed for travel advisors over the last year.
“ASTA members are largely in the same spot this year as they were last year at this time,” he said, noting that the recovery for the travel industry remains uneven.
One of the key points repeated during the panel was that more needs to be done to assist travel advisors.
Because of the way commission structures operate in the industry, it is likely to be about eight months before travel advisors booking travel now will really see any meaningful income recovery, and government aid is running out.
“The recovery remains frustratingly uneven,” said Kerby. “For the travel industry, the pandemic remains akin to a Category 5 hurricane. in just a few days last spring, the pandemic washed away months of planning and counseling with customers and industry suppliers and with it the commissions that our advisors rely on to feed their families. Worse, to care for their clients, our members spent weeks and months with their clients on hold and online rebooking postponed trips, fighting for customer refunds and getting people home. ASTA members did this work often knowing that they wouldn’t be paid.”
Kerby placed the blame on the CDC and the federal government’s response to the pandemic, noting specifically the U.S. State Department’s strict travel advisories and the CDC’s restrictions on cruising.
Kerby said that the government’s response to the pandemic was to discourage and “in some cases even outlaw” travel.
“Our elected officials have a moral obligation to support travel-reliant businesses until those it has charged with public health at the CDC and State Department lift the warnings and regulations barring travel,” he said.
After five years of record profits, Kerby noted that it is impossible to think the industry could survive without assistance.
“It’s perverse for our government through its regulations and warnings to metaphorically hold our travel industry heads under water and still ask us to keep breathing,” he said. "We are here to demand our government provide more relief to aid our recovery.”
Eight months, Kerby noted, is the number of months after normal travel patterns emerge that ASTA's members will begin receiving commissions.
The eight months that advisors will still have to work for essentially no pay sparked the most conversation on the panel.
Sharpe pointed out that it is hard to hire staff with no money.
“Travel advisors can’t get paid for eight months on bookings and so can’t hire staff,” he said. “People are wondering if they can make another eight months.”
He also noted that it feels like the country and the government are moving on, but travel advisors are doing the work without any upside for several months.
Friedman also noted that travel advisors needed more financial assistance.
“Agents have worked harder than ever before and proven and demonstrated the importance of working with an advisor,” she said. “But they are working harder and not getting paid.”
The panel wholeheartedly agreed that more needed to be done by the government to assist advisors—and that whatever the next steps were, they needed to be easier to navigate.
Sharpe pointed out that travel advisors were advocating for their customers every day with lower staff and no income and then spending even more time trying to figure out the various government assistance programs .
He also noted that with the way these programs were rolled out without expectations and guidelines and without knowing the flexibility that they would have in regards to the money, travel advisors spent the assistance early on.
“In some cases, they were done in eight weeks. They had spent their PPP money and kept their staff hoping that come July, August business would be better and it wasn’t and here we are nearly a year later,” said Sharpe.
Sharpe again highlighted how the payment structure for travel advisors exacerbates this issue and presents a unique problem with how advisors navigate government assistance.
“There is nothing in the market right now that can help them fill that gap effectively, especially when you consider the volume of customers that they need to accommodate and re-accommodate that’s so important to our industry and their reputations,” said Sharpe. “They need more staff, but they can’t afford to hire them because they are not going to get paid on that business for eight months or longer.”
Sharpe added that what is really causing fear among advisors is thinking about how to fill in this gap and how can they take advantage of these government programs effectively.
Kerby noted that the pandemic revealed the weakness in the compensation model for travel advisors, and that he would be happy if suppliers would move up commissions or change the compensation model but that ASTA’s approach was to come at the issue from both sides.
“My dad taught me that if you broke it, you bought it and, if you are going to put these regulations in place and if you are not going to allow people to book travel and do a voluntary activity like cruise, then you have to keep these businesses whole until you do,” said Kerby.
“When government policies directly affect the viability of an otherwise healthy industry, I do think that there is a responsibility to that,” he said.
Wilson-Buttigieg pointed to her own travel agency, Valerie Wilson Travel, as one of the casualties of the pandemic and failed government assistance programs.
“We couldn’t make it,” she said. “The runway ran out. Our industry needs more help. We want to pay our employees, we want to keep our storefronts and we want to serve.”
Wilson-Buttigieg explained that the PPP program didn’t cover enough, noting that the first round of PPP loans barely covered the rent and that the second round wasn’t enough to cover the staff.
“Will there even be a third round?” she asked.
Friedman noted that many travel advisors were turning to other entrepreneurial endeavors to survive the pandemic and that other entrepreneurs were seeing this as a time to become a travel advisor.
“Host agencies are growing with people new to the industry,” said Friedman. “There’s going to be more and more need for travel advisors.”
While there is much criticism, there is also great hope. The pandemic definitely highlighted the importance and the need for travel advisors in the “new normal,” and Upchurch said advisors should not be afraid to speak up.
“Every single customer wants you to survive and to thrive,” he said. “The last thing that they want to see is their advisor not make it.”
In recognizing the importance of ASTA’s Legislative Day, Wilson-Buttigieg implored members of the industry to reach out to their representatives in Congress and share with them the needs that they have.
Currently, travel advisors around the country can reach out and share their support for the SAVE Act, which would make travel agencies and other hard-hit businesses eligible for the Shuttered Venue Operators Grant program. It would allow travel advisors to qualify for grants equal to 45 percent of their 2019 gross revenue, up to $10 million, and could work to keep travel advisors operating during that eight-month gap while they work tirelessly for clients while not being paid themselves.
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