The travel industry was the first to take a major financial hit due to the spread of the coronavirus, and now they are asking for billions of dollars in aid. Individuals representing this sector met with President Trump in the White House on Tuesday.
Lobbyists for the travel industry estimate that over $300 billion will be lost due to suspended operations and other problems caused by the virus. Their main demands include access to low interest loans from the Small Business Administration, a stabilization fund for the workforce, and emergency liquidity. They expect that the total cost of all of these measures would be about $150 billion.
Trump responded that the administration and White House staff would be available and sympathetic to their concerns, but concrete details related to something like a stimulus or bailout was not formally released. The U.S. Travel Association and other groups were present at the meeting. They represented interests from companies such as Disney, Carnival, Expedia, Hilton, and MGM International.
The CEO of the American Hotel and Lodging Association has already said that the economic impact of the coronavirus on the industry is worse than the combined effects of the September 11th attacks and the Great Recession combined. He projected that total losses related to retail, transportation, lodging, dining, and other industries would also come with the lost travel revenue, and it would be several times worse than what all of those sectors experienced in the aftermath of the 2001 terrorist attacks.
The airline industry was another hard hit sector, that had already met with officials in the White House the previous day. They are asking for loan guarantees along with direct aid that would amount to approximately $50 billion. Boeing sent people to the industry meetings as well, due to the possibility of severe disruptions in airplane manufacturing and related processes.
While all of this was going on, the federal government was already working on various economic responses to the coronavirus outbreak that are projected to cost somewhere between $800 billion and $1 trillion. The total economic impact of the virus is still unknown, and even precautionary measures in place around much of the world that should end by the beginning or middle of April may be extended by various governments around the world if necessary.
Bailouts and other forms of government assistance have been controversial in recent years. Money given to the automobile industry and banks during the Great Recession was extremely unpopular with the American public. President Trump would also be criticized for a possible conflict of interest if he signs a bailout that gives money to hotels, as he owns hotels and similar commercial properties.
Stabilizing the economy in the midst of coronavirus panic
The national response to the virus is expected to include various forms of aid and stimulus for individuals and businesses. Many politicians have already suggested sending $1000 to every American. There are also pieces of legislation in the works that contain up to $1 trillion in assistance. Because millions of workers around the country are being forced to not go to their jobs, some kind of stimulus may be necessary to prevent large scale foreclosures, evictions, and other forms of financial hardship.