Cookies policy

In order to provide you with the best online experience this website uses cookies.
By using our website, you agree to our use of cookies. Learn more.

Monday,  March 4, 2024 10:05 PM 

Only 239 travel agents participated in ACTA’s survey on debt levels & gov't loans


Only 239 travel agents participated in ACTA’s survey on debt levels & gov't loans
(Shutterstock/Rawpixel.com)
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and DailyXtra.ca. Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

New data released by the Association of Canadian Travel Agencies (ACTA) suggests that many travel agencies, and travel advisors, who accessed pandemic-era loans from the Government of Canada are still carrying debt.

But the survey ACTA conducted in July to assess the trade’s debt levels – and its confidence in its ability to repay Ottawa by Dec. 31, 2023 – only scratches the surface.

Why? Because only 239 people participated. 

PAX learned about poor turnout after following up on a press release ACTA shared Tuesday (Aug. 29) outlining the results of the poll, which was open to travel agencies and independent travel advisors between July 11-28.

The study found that 27 per cent of travel businesses owe the government at least $100,000, while 56 per cent owe at least $50,000 and 80 per cent owe at least $10,000.

But given that only 239 people shared feedback, the percentages on debt loads are likely much higher, said ACTA’s President Wendy Paradis, speaking with PAX over the phone Wednesday morning (Aug. 30).

“We believe there is a tremendous debt load in the travel industry,” said Paradis, admitting that she was “surprised” by the low participation numbers given the high volume of phone calls and inquires ACTA has had regarding debt.

ACTA President Wendy Paradis. (File photo)

ACTA’s surveys serve as a key tool in its advocacy strategy in calling on the federal government to provide forgiveness and more time to repay outstanding loans.

The number 239 jumps off the screen when considering the Canadian travel industry at large – by ACTA’s account, there are more than 24,000 travel advisors working across the country.

Imagine the information ACTA, advocating on behalf of travel agents and agencies at various levels of government, could utilize if everyone participated.  

But despite the disappointing survey numbers, it’s an outcome Paradis understands.

“The industry is very busy right now,” she said. “I think there’s a reality of just trying to make it through the day and serve clients. I was a travel advisor myself for 15 years. I completely get that in normal times, never mind these times.”

The survey is also unique in nature – it asked travel advisors for information that “people typically don’t like to share,” Paradis said.

Indeed, debt is a taboo topic – even embarrassing, at times – so it makes sense that some would prefer to not share their financial situation. 

But there still appears to be some willingness within the trade to discuss the issue. 

“People who chose not to respond to the survey have requested one-one-one meetings [with ACTA] so they could talk about it further,” Paradis said, noting that most agents who do come forward request that the conversation remain confidential.

Activating the survey at the height of summer may have also caused a low turnout.  

“We knew July wasn’t the best time,” Paradis said.

But the timing was important as ACTA wanted data that reflected Q2, ending June 30, so it had up-to-date information it could show the government as fall and winter begins.

Many travel agencies, also, can forecast the rest of their year by the end the second quarter, Paradis said.

“Agencies are trying to move forward"

Travel and tourism businesses accessed federal loan programs en masse during the pandemic. However, tight repayment terms are proving to impede travel business recovery across Canada, ACTA says.

The association’s summer survey focused on three benefits – The Canada Emergency Business Account (CEBA), the Regional Relief and Recovery Fund (RRRF), and the Highly Affected Sectors Credit Availability Program (HASCAP) – and promised that no individual travel businesses would be referenced.

It’s an important topic to explore. Paradis says she’s heard from travel agency owners who are coping with rising credit card debt levels, and others who have tapped into their RRSPs, and other loans, to repay their COVID-era debts.

“Agencies are trying to move forward, but they have all of this debt from two years ago,” Paradis said, noting how many agencies, and agents, are also struggling with the rising cost of business.

ACTA, for more than a year now, has been seeking information on preferred solutions for loan repayment and forgiveness, extending repayment deadlines, and modifying loan terms.

Its latest survey revealed that 50 per cent of participants are still recovering from the pandemic with a slow return to profitability.

Meanwhile, 15 per cent said that loan repayment terms are difficult to meet and that today’s high interest rates add to the difficulty.

A majority of travel agencies and independent travel advisors are not confident they can repay principle and interest on CEBA, RRRF and HASCAP loans by Dec. 31, with 67 per cent saying they are not confident and 16 per cent are unsure, the survey shows.

Another 36 per cent said they think it is likely or somewhat likely that they will close within three years.

When asked what measures would be most helpful in being able to repay government loans and debt, 72 per cent would like to see more loan and debt forgiveness and 16 per cent said a longer period to pay.

ACTA needs important data like this so it can paint an accurate picture of the situation for the government.

“There’s a perception that the travel industry is flying right now because it’s so busy,” Paradis said. “But we need to let [the government] know the real story – that this industry was shut down for two years, and even though the government came forward with relief, it was not covering the expenses. Month by month, all of these businesses continue to go into debt.”

As well, because travel agencies are small businesses, many did not have access to the capital that larger organizations did.

“Everyone had a tough time,” Paradis said.

More to the puzzle

ACTA says it is working with other stakeholders, including the Travel Industry Association of Canada and the Canadian Chamber of Commerce, to ensure a clear, strong, and collective voice and call for action is heard and acted upon by Minister of Finance Chrystia Freeland.

Paradis said the survey’s 239 responses came from industry members in every province – 61 per cent of respondents were from travel agencies, six per cent were from host agencies.

But the results are just one piece of the puzzle.

Paradis says ACTA’s analysis of debt levels also includes one-on-one consultations it held with independent travel agencies and advisors, travel consortiums, host agencies, franchises and its national board of directors.

“Based on all of that – even though the [survey] numbers are lower than we anticipated – it is all aligning,” Paradis said. “We have enough information we can work with.”

Letter writing campaign

ACTA, meanwhile, has launched an industry-wide letter writing campaign calling on Minister Freeland to provide more time for federal loans to be repaid.

The campaign runs from August 29 through September 29.

ACTA is asking industry members to send a letter to their Member of Parliament and Minister Freeland. A sample letter is provided by ACTA and your MP’s information will auto fill when you insert your address.

The process is simple and takes less than two minutes (click here to get started).

The strategy will include several tactics throughout the Fall, including formal submissions to government, main-stream news media, social media, and meetings with MPs across Canada.

ACTA’s recommendations are to extend the CEBA interest-free repayment deadline by two years to the end of 2025, while maintaining access to the forgivable portion, modify the terms of the RRRF and HASCAP loan programs to allow more time for repayment, and work with industry to explore forgiveness measures that would help the loans be repaid sooner.

Paradis says ACTA will also encourage agents to write personal letters to their MPs.

"It's an important tactic," she said. 


Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook. 


Indicator...