Photo/Illutration Visitors crowd the Asakusa district on the first weekend after Tokyo was included in the "Go To Travel" program. (Takuya Isayama)

The government’s “Go To Travel” program proved to be a boon to the tourism industry reeling from the effects of the novel coronavirus pandemic, but many small and midsize travel agencies are still awaiting payment of sums they temporarily footed to give travelers a discount.

The program provides a 35-percent discount on the cost of transportation and lodging to tourists who make reservations with registered travel agencies. Because the full amount of a trip is paid to airline and railway companies as well as hotels, the travel agency has to front the 35-percent amount to those businesses.

But many small travel agencies around Japan are griping that the government secretariat handling the paperwork is too slow in reimbursing them for the discounted amount.

The Chiba Prefecture association of travel agencies has about 250 member companies, and about half of them signed up for the “Go To Travel” program. So far, not a single one of those companies has been reimbursed.

Many travel agencies are increasingly concerned because autumn is traditionally the time of year when group tours are popular. But if those groups also use the Go To Travel discount, travel agencies will have to cough up even larger sums without knowing when they will be reimbursed.

In Hokkaido, the local branch of the All Nippon Travel Agents Association (ANTA) is frequently asked when the reimbursements will be made. Some companies are 10 million yen ($95,000) in the hole.

“Many of our members are run by sole entrepreneurs or are companies with only a handful of employees,” a Hokkaido branch official said. “If this situation continues, those businesses will face an even harsher situation.”

The Osaka branch faces a similar dilemma as about 90 percent of the 340 or so travel agencies signed up for the Go To Travel program.

“While the program has been of some help, for small businesses, nonpayment of 500,000 yen or 1 million yen, can have serious effects,” a branch official said.

One travel agency in Saga Prefecture on the main southern island of Kyushu signed up for the Go To Travel program in July when it started.

“I never expected payment to be this slow,” a company official said. “Our cash flow problems only grow more serious.”

The company is still awaiting reimbursement for about 6 million yen.

With schools planning trips in autumn, the official said the unpaid amount could reach the tens of millions of yen.

“Due to the novel coronavirus pandemic, many small and medium-sized agencies have almost no cash on hand so even a small unpaid amount can become a heavy burden,” noted an official with the Saga branch of ANTA.

The national secretariat in charge of reimbursing the discounted amount said the popularity of the program and the large number of companies that registered led to delays in approving applications and settling the amounts travel agencies have paid for.

The secretariat has increased the number of staff handling paperwork so payments can be made as quickly as possible.

(This article was written by Manabu Hiratsuka and Yuki Edamatsu.)