TORONTO — The increased demand for travel and exponential uptick in bookings are all well and good, but for many travel agencies, they may be too little, too late.

Some travel retailers are still struggling to get solvent after the ravages of COVID and now they’re staring down a loan repayment deadline that’s just 4 months away.

On Dec. 31, federal government loans including CEBA (Canada Emergency Business Account) come due. Other loans include the RRRF (Regional Relief Recovery Fund) and and HASCAP (Highly Affected Sectors Credit Availability Program).

It’s not just travel retailers facing this deadline. Companies across Canada, in a wide variety of sectors, are grappling with how to pay off these loans when business is still getting in recovery mode after the pandemic years.

In a recent article for The Toronto Star, Perrin Beatty, CEO of the Canadian Chamber of Commerce, says, “These are not small businesses, and they’re not asking for a handout. They were fully compliant with the program, and they’re far from rich. They’re struggling.”

ACTA is one of many associations working with Beatty and the Canadian Chamber of Commerce to call on the federal government to extend the loan deadline.

As reported in Travelweek Daily today, ACTA has announced a new letter writing campaign – agents are urged to take part, with an online letter to their MP and Finance Minister Chrystia Freeland taking just 2 minutes to complete. The link to write a letter online is here.

ACTA also today released findings from its July 2023 survey of member travel agencies, showing that 67% of travel agencies and independent travel advisors aren’t confident about repaying federal government COVID loans like CEBA. And 36% said they think it is likely or somewhat likely that they will close within three years.

FRUSTRATION & CONFUSION

Travelweek reached out to travel retailers to get their take on the Dec. 31 loan repayment deadline, and how it could impact the travel industry.

Several travel agents told us they were able to stay afloat without tapping into CEBA and other loans. They’re thankful, and at the same time, they’re hoping everything turns out for their industry colleagues who did take out loans.

Others are independent travel advisors who didn’t qualify for the government loans, a source of much frustration during the pandemic years, as advocated by ACTA and the Association of Canadian Independent Travel Advisors (ACITA).

For many independent travel agents, the loan process has been a source of frustration and confusion. Last month ACITA sounded the alarm about eligibility criteria investigations by the Canada Revenue Agency for some ITAs who did receive CEBA / CRB loans.

One agent tells Travelweek: “I wasn’t incorporated at the time, so the business loans being offered weren’t applicable to me. I did qualify for CERB at the time, and haven’t had any correspondence from them questioning it or recalling it so I am hoping no news is good news.”

Another agent said: “I tried to get the CEBA loan. They made the application process so difficult and complex and labour-intensive, it was almost impossible to fulfill all the documentation requirements despite being eligible. And the banks and the government offered zero technical help/support.”

“NOT ENOUGH TIME TO PAY IT BACK”

Travel advisors are all too aware that travel agencies were one of the hardest hit industries during the recent pandemic.

Says Robert Townshend, President and founder of Total Advantage Travel & Tours in Toronto: “While I’m sure most owners appreciate that the government stepped in with loans to get us through the rough part, the truth is that December 31, 2023 is not enough time for most of us to pay it back.”

Townshend says he’s spoken to a lot of colleagues about the government loans, “and they have all told me that they need more time to meet the looming deadline. I think the government should either forgive the loans entirely or give the travel sector at least 2 additional years to repay the loan with the $20,000 forgiveness included. If we don’t get that we may see a lot of travel businesses forced to go deeper into debt and we just can’t afford it right now when we are only just recovering.”

Zeina Gedeon, President and CEO of Trevello Travel Group, told Travelweek that Trevello has been closely engaged with its network of agencies, to gather insights on the impact of these loans and the challenges they pose.

“It’s important to recognize the complex situation that many businesses, including travel agencies, hosts, are currently navigating as the government loan deadline of December 31 approaches,” says Gedeon.

And that’s for the agencies who were able to access loans in the first place. “Our member advisors faced certain obstacles in accessing the relief loans in the first place,” says Gedeon. “A significant portion of our advisors did not qualify due to various reasons, including the fact that many independent advisors are not incorporated entities. This has left a substantial number of professionals within our industry without the critical financial support they needed during these challenging times.

“Compounding these challenges is the unfortunate reality that some advisors who did receive financial assistance are now being asked to repay the funds. This situation is deeply concerning and frustrating, especially considering the efforts we collectively put forth to secure this relief for our Advisors. It’s a distressing turn of events for our advisors who should ideally be focusing on the recovery of their businesses.”

Gedeon says Trevello has taken proactive steps to address these issues. “We are working with ACTA to urge the government to consider implementing loan forgiveness and repayment deferral measures. This would provide our industry with the necessary breathing room to navigate the ongoing recovery process, allowing businesses to regain their footing without the added pressure of looming repayment deadlines.”

The challenges faced by our industry members are significant, and the need for support is pressing, she adds. “We believe that extending the loan repayment deadline and providing loan forgiveness are crucial steps that can contribute to the long-term sustainability of our industry.”