Travel Industry Projected to Lose Over $800 Billion, Asking for Help
Joe Cortez March 23, 2020
Image Source: The White House/Flickr
On the whole, the travel industry is warning the White House that a travel recession could hurt the economy by more than $800 billion, while travel spending is expected to drop by over $300 billion. Meanwhile, the President of the United States is once again vowing to help the airlines recover.
$809 billion: the projected economic impact that decreased travel due to Coronavirus could create across the United States.
The figure comes from a report by the U.S. Travel Association, shared with President Donald Trump during a phone call on Tuesday, Mar. 17. The report additionally warns 4.6 million “travel-related” jobs could be lost this year alone, while spending is projected to drop by $355 billion for the year. The trade organization warns the 31 percent estimated plunge is “more than six times the impact of 9/11.”
Travel Organizations Beg for Help During COVID-19 Pandemic
The report covers all spending across the travel sector: Transportation, lodging, retail, attractions, and restaurants. If everything were to come true according to those projections, the estimated 4.6 million jobs could nearly double the current unemployment rate, sending it up to a possible 6.3 percent.
To potentially ward off a fiscal crisis for the industry, the U.S. Travel Association is asking for a three-part lifesaver package, calling for a “Travel Workforce Stabilization Fund,” emergency liquidity for travel businesses, and making U.S. Small Business Administration loans available to help small businesses and their employees. The request nearly mirrors one made by Airlines for America, which asked for over $50 billion to support airlines during this period.
“This situation is completely without precedent,” U.S. Travel Association President and CEO Roger Dow said in a statement. “For the sake of the economy’s long-term health, employers and employees need relief now from this disaster that was created by circumstances completely out of their control.”
White House Considering Serious Support
In turn, the Trump administration is seriously considering the best ways to support the travel industry due to the uncertainty of the novel Coronavirus (COVID-19) situation. In a memo issued by the Department of the Treasury acquired by CNN, one possible “stage three” economic stimulus package calls for an airline industry secured lending fund up to $50 billion. If air carriers accept federal loans, it would force them to accept the continuation of service requirements while limiting how much they can pay their executive team.
Meanwhile, President Trump used part of his daily briefing to reassure American air carriers they would receive support. Bloomberg reports the president said airlines “would be number one” to get aid.
“They go from having the best year they’ve ever had to having no passengers,” Trump said during his commentary, as quoted by Bloomberg. “Because of what we had to do to win this war.”
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Why should we bail out airlines who make do nothing for the comfort of their patrons? You shrink the seats and legroom to up your revenue and Now you have your hand out?
We are in a medical and healthcare crisis in this country. If anything bailouts and aid need to be prioritized there. We dont have enough medical supplies and equipment. Nurses and doctors are getting burned out. People are suffering but hey let’s bailout the travel industry because people can’t make it to disneyland! And as much as I hate health insurance companies, I am wondering if this virus is going to bankrupt them all. What would you rather have, health insurance or crappy airline service? My condolences to airline employees, shareholders, and their vendors but YOU ARE NOT A PRIORITY RIGHT NOW! Ironically, airlines above everyone else should understand being oversold and waitlisted in desperate time of need.
There should be no bailout for the cruise lines nor any corporate owned hotels.. Most cruise ships sail under flags of convenience and are domiciled (mostly) off -shore. What logic applies to bailing out these entities other than executives are Trump's friends and in his case, Trump Hotels would be one of the hogs at the trough!
Government bailouts using my hard earned taxpayer $$ should only be afforded to those companies that deserve it. Many airlines have utilized previous bailout money to buy back shares and not invest in job creation. These airlines should NOT receive assistance in this current crisis, even if that means 80% of the airline industry goes bankrupt (and trust me, this is not good for me with a bank of award miles in the millions). This is a matter of principle. When the airlines go bankrupt, rest assured, there will be investors there to pick up the pieces and form new corporations to fill in the gaps. I don't want my taxpayer money going to these selfish, greedy companies.