Stimulus may allow some to keep jobs

Economic bailout might prevent bankruptcies

The $2 trillion stimulus package is aimed at getting the economy back on its feet as it deals with the coronavirus shutdowns. So what does it mean for travelers?

The economic damage is widespread across the economy, but the travel industry has taken some of the biggest hits.

Here’s how the stimulus package could help.

What does the stimulus package mean for airlines, cruise lines and hotels?

Based on the way the bill is written now, it appears travel providers are going to have to compete for loans from a $500 billion fund. Trump has repeatedly mentioned airlines as a group that needs to be bailed out. He has also mentioned the cruise and hotel industries. They would have to jostle for a share of the pot, which would likely be structured so that it would eventually have to be paid back once the economy improves. What’s less clear is how the damage to other sectors of travel, from casinos to tour operators will be handled. It’s yet to be seen which businesses can secure loans and whether some are left behind.

What does the bailout mean for travelers?

If you have a reservation for a flight, hotel or cruise, it adds reassurance that your travel provider may not see its financial situation become so dire that it will have to file for a Chapter 11 reorganization. Such a filing can add an element of uncertainty even though there’s still a good chance that the provider will continue to do business as usual.

What about travel industry employees?

It may allow some companies to be able to pay employees who are otherwise subject to layoffs. You depend on many people for travel. On airlines, everyone from the baggage handler and reservation clerk to the pilot. On cruises, from room stewards to the captain. With companies receiving money from the stimulus, those people are more likely to keep their jobs and be able to make ends meet.

What are airlines, cruise lines and hotels asking for?

The airline industry was reportedly hoping for $50 billion, and the president said they would be first in line for a bailout. Hotels wanted $150 billion directly and an additional $100 billion for their suppliers. The cruise industry hasn’t disclosed how much its members were seeking.

What made this bailout necessary?

A cascade of cancellations and travel restrictions.

Some 4.6 million workers in the U.S. travel industry stand to lose their jobs in coming weeks, according to research prepared for industry group U.S. Travel.

The organization says the layoff predictions underscore the need for government action.

Even before the State Department issued a Level 4 warning for travel abroad – basically telling everyone to stay in the U.S. – travelers were bowing out of their reservations. Hotels, for instance, saw their occupancy rates to fall to 20% in major cities during what had been a banner year, according to the American Hotel & Lodging Association.

About 25,000 of the nation’s 56,000 hotels could close because of the pandemic, warned Chip Rogers, CEO of the American Hotel & Lodging Association. Major chains say they are going to have to furlough employees.