Capital Beat

By Nate Herman

As we begin 2021, we say goodbye to a year that will likely go down in history as one of the worst for the industry – worse than 9/11 and worse than the 2008-2009 financial crisis.

Yet, we begin this year with a new hope. Two vaccines, and counting, are helping us see the light at the end of the tunnel. And, after eight long months of inaction, Congress finally approved a COVID relief package to help us get to the end of that tunnel, with an extension of the Paycheck Protection Program (PPP) and critical support for our customers, hardworking American families.

Obviously, we are not out of the woods yet. We begin this year facing some of the same challenges as last year, in the form of new lockdowns and new travel restrictions.

And we start the year facing new challenges. While Congress gives with one hand, they take with another, failing to renew the Generalized System of Preferences (GSP) program before they left for the holidays. Under GSP, U.S. travel goods imports from developing countries such as Thailand, Cambodia, Burma (Myanmar), Indonesia, Sri Lanka, the Philippines, and Pakistan enter the U.S. duty-free. U.S. travel goods imports from GSP countries now account for 15.3% of all U.S. travel goods imports. As a result of Congress’ inaction, GSP expires December 31, 2020, amounting to a huge tax increase on the industry at a time when we can least afford it. TGA is working hard to get the new Congress to retroactively renew GSP as soon as possible.

Meanwhile, the industry still faces 25% punitive tariffs on U.S. travel goods imports from China and the threat of 25% punitive tariffs on U.S. travel goods imports from Vietnam. But, while it may take time, the new Biden administration will likely take a different approach to trade, one that recognizes the importance of trade to the U.S. travel goods industry and our almost 100,000 American workers.

I know today appears bleak but, if we stay on target, we can have a new hope for a better tomorrow. And TGA will be here to help you every step of the way.

For more information, please contact TGA’s Nate Herman at nate@travel-goods.org or 202-853-9351.

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By Nate Herman

As I write this, Labor Day is signaling the unofficial end of summer. A summer like no other. Usually at this time, we are capping off huge sales of all types of luggage for the annual surge in travel by air, land, and sea with a spike in sales in backpacks, totes, and other travel accessories for the back-to-school season.

Instead, this summer we have taken the road less traveled…literally. And don’t even get me started on air and sea.

The patchwork re-opening of retail has been half-baked, hamstrung by lack of a national mask mandate, with small travel stores, the cornerstone of our industry, taking the brunt of constantly changing rules and no relief on rent like their larger neighbors.

Demand has been slow to recover, with air travel just getting off the ground but greatly restricted, car travel picking up but for much different trips, and the cruise industry grounded altogether.

And then back-to-school took on a whole new meaning with over half the country starting the school year partially or completely online.

However, our industry has embraced this summer’s unprecedented challenge the same way the industry overcame 9/11 and the Great Recession. Our industry has adapted, tailoring our product and how we deliver it to meet the consumer’s changing needs and evolving situation.

During this pandemic, Americans have embraced the great outdoors like never before – camping, hiking, biking, kayaking, boating, etc. And who supplied them the gear they needed – our industry. As families packed up and went to the beach or to the lake in droves, we provided the gear to make that happen.

How did we deliver? We followed our customers online so they could find the travel goods they needed, and have that gear delivered right to their front door.

Moreover, this Labor Day weekend, my family went camping at a national park. Not only was our campground, and every campground in the park, sold out, but the park was packed the entire weekend. Meanwhile, I don’t know of a single colleague whose family did not go somewhere this weekend – down to the ocean, to the lake, or up to the mountains. Frankly, it was one of the few times I was happy to see crowded roads and slow traffic.

This road less traveled is not without its potholes. Our industry still faces 25% punitive tariffs from the main supplier of our product, with no end in sight. And the Generalized System of Preferences (GSP) program, one of the few bright spots for our industry, whose duty-free access for travel goods imports from countries like Cambodia, Burma (Myanmar), Thailand, and Indonesia, is due to expire at the end of this year. We at the TGA are fighting hard for GSP renewal, but nothing is guaranteed in Washington, D.C.

And finally, of course, is what happens next with the pandemic, which regrettably, only time will tell. But I believe that by embracing the road less traveled, our industry just might find its way to the other side of this pandemic.

For more information, please contact TGA’s Nate Herman at nate@travel-goods.org or 202-853-9351.

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By Nate Herman

First, I must acknowledge the reality from which I am writing to you as we approach the end of May. The industry has suffered a quintuple indignity. Travel has stopped, retail has dropped off a cliff, the government’s bailout program has fallen short, and, as the small guys, we still have to pay our rent and all of our bills in full and on time, unlike many of our bigger competitors. Oh yeah, and we just passed the one-year anniversary of having to pay a 25% punitive tariff on the majority of products we sell.

But I am also writing to you the day before the unofficial launch of the summer travel season – Memorial Day weekend. And you know what? It isn’t all bad. Many people I know are traveling this weekend. People are also looking for any form of relief from “lockdown” cabin fever. I have seen a flood of pictures on social media of friends hiking, camping, and embracing the outdoors like never before.

If you look for it, really hard, there are positive signs elsewhere. Europe has begun to open up again to tourists, led by Italy. The cruise industry is talking about restarting this fall and bookings for 2021 are really strong.

And all of us have seen those pictures of crowded planes. While those pictures raise other serious questions, it does mean that people are ready to travel.

Travel might look different, and utilize different modes of transportation, but it’s there, and it’s growing slowly but surely.

In addition this week, the last of the states finally started to reopen retail, albeit slowly.

To butcher my metaphors, we are definitely not in Kansas anymore. But I do see some light at the end of this very long tunnel.

Through it all let’s not forget this is an industry that survived 9/11 and the Great Recession. With this glimmer of hope, I leave you with a quote from a not so famous movie that serves this industry well during this unprecedented time – “Never give up, never surrender.”

For more information, please contact TGA’s Nate Herman at nate@travel-goods.org or 202-853-9351.

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