Small Business Administration Will Issue More Funding But Not for CVBs

The 880-page CARES Act, issued in late March, has not gone far enough to aid our industry, says the U.S. Travel Association. 

Photo Credit: SteveDF for Getty Images

Updated May 5, 2020, 2:00 p.m. EDT

The Small Business Association yesterday agreed to reopen its application portal for Economic Injury Disaster Relief funds, but only on a limited basis -- and only for U.S. agricultural businesses. The decision is particularly disappointing for destination marketing organizations, which play a vital role in stimulating the U.S. economy.

"Excluding major segments of the economy from emergency relief funding not only hurts small businesses and workers but jeopardizes the strength of the broader economic recovery," noted Tori Emerson Barnes, the U.S. Travel Association’s executive vice president for public affairs and policy, in a statement issued today.

"Non-profit entities -- such as destination marketing organizations and arts and culture groups -- are essential for driving consumer demand to their regions, and therefore will be major engines of the recovery. They, too, have suffered severe economic hits that have necessitated layoffs and furloughs in almost every case, and without their work to bring customers back many small businesses will not survive even once recovery begins."

Barnes added, "We urge the Small Business Administration to open the EIDL application process to non-profit groups that play a vital role in economic development, and to non-agricultural small businesses."

U.S. Travel has been very proactive in pointing out significant shortfalls in the CARES Act, and on April 8 issued a document asking for "Technical Corrections and Enhancements to the CARES Act" that specifically addressed the needs of DMOs in these points:

  • 501(c)(6) nonprofits: Destination marketing organizations, which are often classified as 501(c)(6) organizations, provide critical economic development support for local travel markets through tourism management and convention and meeting sales. Nonprofit DMOs are typically funded through a combination of local hotel room taxes and private sector contributions. But the economic shutdown and steep decline in hotel occupancy have wiped out their funding, forcing them to lay off thousands of workers and threatening to slow the economic recovery.
  • Clarify that 501(c)(6) nonprofits are eligible to participate in the Paycheck Protection Program. Amend Section 7(a)(36)(A)(vii) of Title 15 U.S.C. to include 501(c)(6) in the definition of an eligible nonprofit under the PPP.

Highlights of the CARES Act

The COVID-19 CARES Act, signed into law on March 27, included sweeping provisions for economic relief in the travel and tourism sector. As written, the Act promised to provide aid not only to major corporations, but to small companies, independent business owners and affected employees. 

Making sense of the 880-page document, however, can be yet another challenge to overcome. U.S. Travel's COVID-19 CARES Act resources page, which includes a four-page summary with commentary for our industry, is a good place to start.

In addition to a helpful guide for eligibility, U.S. Travel's resources page provides an overview of the aid available to the travel and tourism industry.

• $377 billion in loans and loan forgiveness for small travel businesses
The bill provided small travel businesses (with 500 employees or fewer), self-employed individuals, and 501(c)(3) nonprofits with enhanced and expedited Small Business Administration loans, which were made available quickly through community banks. Loan recipients could receive tax-free forgiveness on a portion of the loan, equal to eight weeks of payroll and other expenses.

• $454 billion in federally backed financial assistance for impacted businesses
The bill provided $454 billion through the Treasury Department and Federal Reserve to assist impacted travel businesses and governmental entities through secured loans, loan guarantees and other financial measures. The broad eligibility under this program ensured that any impacted organizations could access a liquidity lifeline to keep workers employed and stay afloat through the worst months of this crisis.

• Tax relief to mitigate losses and allow businesses to pay employees and continue operating
The bill allowed affected businesses to temporarily defer tax liability, access an Employee Retention Tax Credit, delay or eliminate estimated quarterly tax payments and filings deadlines, and allow for a carryback of the Net Operating Loss (NOL) Deduction.

• Grants for tourism businesses and airports
The bill provided $10 billion in airport grants to support vital operations and provided $6.5 billion in Community Development and Economic Development Administration grants for economic injuries caused by COVID-19, including in the tourism industry.

Tori Barnes, executive vice president of public affairs and policy, says the U.S. Travel Association is available 24/7 to help industry members navigate this difficult time.

More aid will be needed

"We expect we'll really be needing additional relief as we move forward, and we will be continuing to seek solutions," said Tori Emerson Barnes, U.S. Travel's executive vice president of public affairs and policy, during a virtual overview of the CARES Act for industry members.

"We are also collecting important stories that we can share with government officials," she added. "We'll be coming back to you all again…as we engage with Congress to seek additional clarification, expedited guidance and relief."

Accessing the promised relief might prove difficult, Barnes cautioned, and U.S. Travel can be helpful resource. "If you're getting stuck within the system, please do not hesitate to reach out."

Barnes concluded the information session with words of encouragement: "I know it is an incredibly difficult time, especially for those who are on the front lines. Our industry has really been hit so significantly. Please know that we're here 24/7 to help you navigate through this challenging time."

Contact U.S. Travel

U.S. Travel executives are available to assist those seeking aid under the CARES Act and learn about additional hardships to be addressed. Use this link to reach out directly to:
Tori Emerson Barnes, executive vice president of public affairs and policy;
Erik Hansen, vice president of government relations; or
Treon Glenn, senior director of government relations.