Bipartisan support is building in both chambers of Congress for an overdue policy step that will be vital for a post-pandemic economic resurgence: extending federal relief to non-profit economic development entities—in particular, destination marketing organizations (DMOs) that market their cities and regions for leisure and business travel.
DMOs—most of which carry a non-profit or quasi-governmental designation—were left outside the scope of Paycheck Protection Program (PPP) eligibility when Congress first passed the CARES Act. Bills to correct this have now been introduced in both the House and Senate, with sponsors Sen. Ted Cruz (R-TX), Sen. Marco Rubio (R-FL) and Sen. Tim Scott (R-SC) dropping a bill in the upper chamber last week.
DMOs are critical engines for local and regional economic development, without which an economic recovery will fall well short of its full potential. Most DMO budgets are dependent upon revenue from travel and tourism that has dried up completely in the last three months, forcing them into layoffs and severe budget cuts just like private-sector companies.
Small businesses—which comprise 83% of travel-related companies—will suffer if their local DMOs do not survive long enough to assist with a recovery. DMOs are charged with driving visitors to hotels, restaurants, shops and attractions—priceless support for mom-and-pop establishments that do not have robust marketing budgets of their own. DMOs are also the primary attractors and facilitators for conventions and large events, which are huge generators of jobs and economic activity. Perhaps most vitally, DMOs are essential for driving demand to lesser-known parts of the country, leveling the playing field with large municipalities that are already well-branded as leisure and business travel destinations.
The loan forgiveness aspect of the PPP is especially critical for DMOs. If these non-profits must expend future budget to repay a bridge loan until tourism revenue returns, each one of those dollars is a dollar less spent to promote small businesses.
That’s why adding DMOs to the ranks of PPP-eligible entities is an astute addition to the aid measures Congress has targeted at employers and employees, and is gaining well-deserved traction in Washington.
The American travel community extends its deepest thanks to the sponsors of the Senate measure, as well as to primary House sponsors Rep. Chris Pappas (D-NH) and Rep. Brian Fitzpatrick (R-PA). We will be working hard alongside our congressional champions to seek the urgent consideration and passage of these measures.