AFTA pitches govt for $125m support package

Funds necessary to ensure travel agent survival

The Australian Federation of Travel Agents is seeking Federal Government backing to the tune of $125 million for a proposed Travel Agent Support Package while urging for the establishment of ‘travel bubbles’ to kick-start international travel.

The pitch, which also calls for the government to encourage new travel reservations to be processed through Australian-owned travel businesses, comes as an estimated $4 billion worth of bookings are yet to be processed on consumers’ behalf and funds returned as a result of the coronavirus travel downturn.

AFTA is also seeking support initiatives to ensure the sector’s survival, which includes Scaled Back to Business grants of approximately $40,000 and Back to Business concessional loans of up to $100,000 per agency to sustain business and service to travellers.

In its Pre-Budget Submission to the government, AFTA emphasised that travel agents, tour operators and travel wholesalers are on the “pandemic frontline” supporting consumers. That’s occurring as the sector remains among the worst hit of Australian businesses with a 90%-plus slump in revenue and little sign of real recovery without the resumption of international travel.

AFTA CEO Darren Rudd meeting with frontline travel agents just weeks into his new role (photo credit: AFTA).

AFTA said travel agents “were the first hit and will be the last to recover” since COVID-19 travel bans were put in place on overseas holidaymakers.

In 2018-19, Australians forked out more than $46 million on international travel – 70% of which was booked through travel agents – and had experienced year-on-year growth of 11% over the past decade, and maintained 7.2% growth in the past five. At the end of March 2020, 53% of travel agent forward leisure bookings by value were for international air travel and together international air and cruise made up two-thirds of travel agent TTV (total transaction value).

With a workforce of over 40,000 Australians, AFTA said travel agents are “interwoven in the fabric of their local communities” that contribute more than $28 billion annually to the Australian economy.

Darren Rudd, CEO, Australian Federation of Travel Agents

AFTA CEO Darren Rudd said: “Travel agencies have zero revenue coming in, an enormous amount of refunds still to process which means they’re currently operating on a negative cash flow basis, and have no end in sight on the continued closure of domestic and international borders. Right now, the primary priority of our members is doing everything they can to obtain the maximum refund for their customers,”

“The continued professional management of this process is vital. The monies returned will, and are already, stimulating the Australian economy. The billions of dollars still outstanding will continue to deliver a very positive economic outcome for the nation as they are returned. But the process of managing that return is complex and lengthy.”

Rudd argues that travel agents are now, more than ever, proving their value to customers and an increasing number of non-customers who are turning to frontline sellers for support.

Darren Rudd with a group of travel agency members at a recent meeting with MP Trent Zimmerman (photo credit: AFTA)

“AFTA is firmly of the view that the survival of those employed in the thousands of small to medium-sized businesses, currently providing a valuable service to an estimated four million Australians warrants special consideration and the allocation of a specific industry grant,” Rudd added.

“This is a critical time for our sector and unless we all work together, there are many businesses which will not survive. We don’t want that to happen. This is a sector which has spent generations helping Australians get overseas for commerce and culture, family and friends reunions and now it’s time for our society to help them in return and by doing so help restart our economy,” he said.

Read more at afta.com.au/news-hub

Lead image: AFTA CEO Darren Rudd discussing the challenges facing travel agents in the Berowra electorate recently.

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