The Australian Federation of Travel Agents (AFTA) has called on the federal government to provide a travel agent support package of $125 million, as well as a range of business relief measures.
In its pre-Budget submission to Canberra, AFTA said it had highlighted the plight of travel agents, tour operators and wholesalers who are among the worst-hit of Australian businesses.
Some tourism operators, according to the federation, have faced revenue drops of more than 90 per cent, with little sign of real recovery without the resumption of international travel.
Yet despite such a drastic fall in economic activity, their services remain in demand: an estimated $4 billion worth of bookings are still to be processed on consumers’ behalf, along with funds yet to be returned to Australians.
“This is a critical time for our sector and unless we all work together. There are many businesses which will not survive,” AFTA chief executive Darren Rudd said.
“We don’t want that to happen. This is a sector which has spent generations helping Australians get overseas for commerce and culture, family and friends reunions and now it’s time for our society to help them in return and by doing so help restart our economy.”
AFTA has asked the federal government to provide a range of support initiatives to ensure the sector’s survival, the most significant of which include:
- Scaled ‘back to business grants’ forecast to be an average $40,000 based on total transaction value in FY19 to assist them to stay in business, cover some operational costs, continue the work of both returning refunds to customers and assisting travellers in 2021 and beyond.
- ‘Back in business’ concessional loans of up to $100,000 per agency outlet to sustain business and service to travellers, delivered through commercial banks, backed up by a three-year Commonwealth guarantee. AFTA said loans of this size will enable viable businesses to endure the COVID-19 related downturn and slow return to profitability.
- The critical need to get Australians travelling again through the establishment of travel ‘bubbles’ and through government promoting the purchase of travel through Australian-owned travel businesses.
Meanwhile, AFTA’s electorate program continues to show results, with Member for Warringah Zali Steggall shining a light on the unique challenges facing travel agents in Federal Parliament.
According to the federation, Steggall met with Mosman travel agencies in mid-August to discuss the need for ongoing tailored support from government.
“There are some businesses that, even with this extended lifeline, will struggle to survive, and I urge the government to consider targeted interventions to support those faced with near-complete shutdowns, such as travel agents and those in the events, arts and entertainment sectors,” Steggall told the House of Representatives last week.
“I must also mention that we need some industry-specific packages, especially when it comes to the travel industry. They’ve been devastated by border closures both international and domestic.
“We’ve had a lot of attention on airlines. Travel agents have received less attention from the media but their situation is arguably more acute. They’re continuing to work to secure refunds for their customers but that doesn’t bring them any income.
“I’ve met with many travel agents, including the CEO of the Australian Federation of Travel Agents. They really need a sector-specific recovery package. They were the first to shut down and, undoubtedly, they will be the last to reopen.
“On top of having a vaccine, we must develop a sustainable way of operating in a COVID-safe way in the future. For industries like travel, events, entertainment and many in the arts, this is more than a recession; this is a near 100 per cent shutdown of their business. So we must find plans,” she said.
Rudd has now coordinated nine visits to local MPs and provided the opportunity for 26 travel agents to share their stories directly with political influencers.
Member for Wentworth David Sharma singled out travel agents in the House of Representatives last Monday, saying he had recently visited a number of agencies in his own electorate in Sydney.
“Some have never been as busy, but it is in processing refunds. When they have processed the refunds, they have also had to return the commissions they earned from these sales,” he told Parliament.
“These businesses have benefited from JobKeeper, but in many respects, it has never been tougher for them. They have many of the same costs, but their cash flow is often negative because they have no new bookings coming through the door.”
Featured image source: iStock/mikulas1