The $2.2 trillion stimulus package signed into law Friday by President Donald Trump is aimed at getting the economy back on its feet as it deals with the coronavirus shutdowns. So what does it mean for travelers?
Reservations have dried up. Airlines schedules have been cut. Cruise ships have been idled. Even when the crisis ends, there are worries about how quickly the industry can bounce back.
And it comes at a terrible time: Before the coronavirus surfaced in the U.S., travel companies were on their way to having one of their best years ever, according to President Donald Trump.
Here's how the stimulus package could help.
What does the stimulus package mean for airlines, cruise lines and hotels?
Airlines are the big winners. They were given $50 billion, according to an analysis by the Associated Press. Hotels and other travel providers will have to compete from loans from a $500 billion fund. Though Trump cited the cruise ship industry as another that should receive aid, some of the big players, like Carnival Corp., Royal Caribbean Cruises and Norwegian Cruise Lines, appear to have been cut out of the deal because they are registered in foreign countries.
What does the bailout mean for travelers?
It means that airlines and other travel companies that are able to tap into the stimulus money are more likely to endure the downturn caused by the coronavirus.
What about travel industry employees?
The bailout was structured to deliver aid to many affected workers. Airlines are required to split the amount granted to them to pay employees' salaries. United Airlines sent a memo to employees Friday letting them know there would be no involuntary furloughs or pay cuts in the U.S. before Sept. 30, even though travel schedules have been dramatically cut.
While the American Hotel & Lodging Association supported the bill, it warned that it had a provision that limits a Small Business Administration loan to 250% of a hotel's average monthly payroll. "This limit will not allow a business owner to meet both payroll and debt service obligations beyond an estimated 4 to 8 weeks," the association said in a statement.
What does the government get in return for loans?
President Trump said that the federal government may take ownership stakes in airlines that receive a loan in order to stay in business. He said it is under discussion.
What were airlines, cruise lines and hotels asking for?
The airline industry got what it asked for: $50 billion. Trump had said they would be first in line for a bailout. Hotels wanted $150 billion directly and an additional $100 billion for their suppliers, but will have to compete from loans from a $500 billion fund. The cruise industry didn'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 were looking at the prospect of losing their jobs, 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.
How bad has it been for airlines?
So bad that they've had to make draconian cuts. American Airlines is cutting international flying by 75% and 30% domestically for April. It is parking 450 planes. CEO Robert Isom told employees, "We are in the fight of our lives, and we will win." Delta Air Lines is parking 600 planes as it cuts its flight schedule by 70%. United Airlines is slashing its flights by more than 60%. Southwest said Tuesday that it is canceling about 1,500 of its nearly 4,000 daily flights through April 14.
And how bad for cruise lines?
They're basically shut down. The Centers for Diseases Control and Prevention recommended this month that everyone stay off cruise ships, not just older travelers. The warning came after a series of cruise ships had infected passengers or crew, in some instances seeing the number of cases spread among those on board. Most prominent was the Diamond Princess, which saw more than 600 passengers and crew infected by the time all disembarked in Japan. Some cruise ships have had trouble finding ports that would allow those aboard to get off and fly home, whether or not they had anyone suspected of having the virus aboard.
What happens now?
It's yet to be seen whether the stimulus is enough to get travel businesses back to any semblance of where it stood before the crisis. The stimulus has a lot of money to lend – but if travelers are hesitant to hit the road again when the crisis ends, we'll have to see if it was enough.
It also hasn't helped all employees. Caesars Entertainment has notified the state of Nevada that 3,200 employees will lose their jobs as it temporarily closes nine hotel-casinos along the Las Vegas Strip, one of the measures being taken to try to halt the spread of the coronavirus.
"Given the unknown certainty surrounding COVID-19," wrote Servando Lara, Caesars' director of labor relations, "we are unable to make a determination as to whether the layoff will be temporary or permanent."
Contributing: Dawn Gilbertson; Ed Komenda, Reno Gazette-Journal
This article originally appeared on USA TODAY: Coronavirus aid package: $2 trillion stimulus package travel details