Travel agencies

Travel agencies hit hard by COVID-19 ask for extended support

Richard Vanderlubbe, President of Tripcentral.ca, at one of its 25 stores, this one in Hamilton, on June 19, 2021. Vanderlubbe says government wage subsidies must be extended for travel agents.

Peter Power / The Globe and Mail

The phone lines may be busy, but for Richard Vanderlubbe and his team of 25 travel agents, the revenues are still months away. Now, he says, the financial support that keeps them stable is about to start to decline.

Mr. Vanderlubbe, CEO of Canadian travel agency Tripcentral.ca, says he has depended on government support over the past year to keep his travel agents in place. With the reduction in government wage subsidies from early July, Mr Vanderlubbe has deep concerns.

“They’re going to pull the rug out from under us, at the very last moment, when we start to see the light at the end of the tunnel,” he said.

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Travel agents operate on a commission structure and most do not get paid for their services until their clients have completed their trip. This means that while interest in travel picks up later in 2021, travel agencies are far from profitable, Mr Vanderlubbe said.

“We’re starting to see an increase in bookings for this fall and winter, but those bookings are $ 100 down payments that go through our hands to suppliers. We do not receive any income for 30 days after payment, or even after travel. Our revenues are deferred, but our costs are not, ”he said.

Last year dealt the industry a record blow, with 12,000 travel agency jobs lost in the first quarter, according to Statistics Canada. For the first time since 1991, the number of people employed in travel agencies nationwide fell to less than 30,000.

The association representing Canada’s travel agencies is calling on the federal government to expand its support for the industry, otherwise thousands of additional jobs could be lost.

“It’s no surprise that the past 15 months have been catastrophic for the travel industry in Canada,” said Wendy Paradis, President of the Association of Canadian Travel Agencies (ACTA). “The industry has experienced a drop in revenues of almost 95%, so the situation is dire.”

Most travel agencies have relied on government funding, including the Canada Emergency Wage Subsidy (SSUC) and the Canada Emergency Rent Grant (SCRU), to avoid shutting down.

As of July 4, the weekly wage subsidy will gradually increase from a maximum of $ 847 to $ 226 per employee. The results of an ACTA survey in April showed that 75% of travel companies will not survive until the end of 2021 without financial assistance at the current maximum level.

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Katherine Cuplinskas, spokesperson for Finance Minister Chrystia Freeland, did not respond to ACTA’s specific concerns about the funding cut. She said the federal government has offered targeted support to hard-hit businesses and organizations experiencing declining revenues, which includes the wage subsidy, the rent subsidy and foreclosure support.

“We will continue to be there for Canadians and small businesses, including travel agents who have been particularly hard hit during this difficult and unprecedented time,” she said in a statement.

Ms. Paradis said a reduction in support programs would force employers to lay off more workers.

“We appreciate that the financial assistance programs have been extended. However, with travel bans still in place, we cannot survive with the monthly cut in aid programs planned by the government from July, ”she said.

Before the pandemic, Tripcentral.ca had more than 150 employees. Mr Vanderlubbe said he was forced to lay off 30% of his staff in 2020 and put most of the remaining agents on leave. He said if government support does not continue, it will have to take on more debt to cover fixed costs and payroll.

Women and small business owners, two groups disproportionately suffering from the economic effects of the pandemic, have been particularly affected by the shutdown of the travel industry. According to ACTA, half of all travel agents are sole proprietors and 75 percent are women.

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Gail McQuarrie, an independent travel agent in Lake Echo, Nova Scotia, said she was not paid for much work last year due to cancellations. She estimates her hourly rate for 2020 was on average around $ 2.

“It’s tough when you do 40 or 50 hours of work a week and then look at your pay stubs at the end of the year and say to yourself, ‘This doesn’t stick,’ Ms. McQuarrie said. “I think you’re going to start to see a non-refundable fee structure so that we get paid for at least some of the work we do.”

Lia Hershkovitz, founder of Guide Me Away, a two-person travel agency in Vancouver, said she has reimbursed all of her clients’ commissions from 2020. As she begins to see the tide turn on travel , she said this year is always a challenge.

“People are booking a lot more for November and December 2021 and for 2022, but there are a lot of requests to be able to cancel when needed, and to be a lot more flexible. “

Until most Canadians have had their second immunizations and it is safe to travel, Hershkovitz said, “I don’t see anything changing.”

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