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SMEs key to travel recovery

Alexandra Vanags
16 September 2021 2 minute readShare
SMEs key to travel recovery

Travel agencies are looking to SMEs as they eye a “travel recovery” after the profound effects of the pandemic on their businesses. However, travel businesses are still having trouble accessing funding until such a recovery occurs.

SMEs will be a key driver in the country’s travel recovery and will play an important role in giving the economy a much-needed boost, said Tom Walley, general manager at SME travel specialist Corporate Traveller.

“Small businesses account for around 98% of all Australian businesses, and across our own corporate travel businesses, SMEs make up 65% of business travel,” Mr Walley said.

Although recent lockdowns have postponed many of his own customers’ business travel, Mr Walley said if SMEs are confident to return to travel, he predicts the country’s domestic travel will bounce back healthily within the next 12 months.

“Vaccinations, rapid COVID testing, traveller tracking and contact tracing, hotel hygiene, insurance offerings and government policy will be key to restoring business confidence to return to travel and ultimately drive the recovery of the sector,” he said.

Potential bounce-back not helping credit

The potential for travel to bounce back is both a source of hope and frustration for travel agents, some of whom are still finding themselves unable to access credit to tide them over until then, even under the government’s SME Recovery Loan Scheme.

Sean Simmons, who runs a Melbourne travel agency with four employees and office space, told MyBusiness he’s been unable to access the loans and most other travel agents he’s spoken to have not either. This is despite the government guaranteeing 80% of the loan, and a two-year repayment holiday, by which time they anticipate the borders can reopen and travel businesses get back on their feet.

“There’s no conversation, it’s just a no. They will not lend to the travel industry because they say it’s too high risk because the borders might remain shut and we may go bust — even though it’s only 20% of the loan amount they have exposure to.”

Mr Simmons — whose business has been running for 13 years and was thriving pre-pandemic — has written to the Treasurer/Treasury asking that they go back to the lenders to discuss the issue with them.

“We want the government to provide a validated list of organisations that will lend to travel agents, and remove the unwilling from the approved lenders list,” he added.

While Mr Simmons has received some stimulus from the Victorian government and the travel agent funds, he doesn’t want to rely on that forever.

“I want to stand on my own two feet,” he said. Another issue is that because they’ve received funds from the Victorian government, he now doesn’t personally qualify for the disaster relief payment.

A spokesperson for Westpac told MyBusiness they “encourage any current or new customers looking for finance to contact their Westpac banker who will sit down with them one on one to understand their needs”.

“Like any loan, lending criteria do apply to loans provided through the SME Recovery Loan Scheme. We are committed to supporting small business customers impacted by COVID-19 recover and grow,” the spokesperson said.

As previously reported by MyBusiness, Treasurer Josh Frydenberg said in a media interview that “more than 70,000 loans have gone out worth more than $6 billion” under the scheme.

SMEs key to travel recovery
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Alexandra Vanags

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