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Redundancy costs could force agencies out of business

Travel agency owners face the prospect of having to make staff redundant in the autumn when the furlough scheme ends – but many don’t have enough cash for redundancy pay-outs.

That was the dilemma outlined by Gary Lewis, chief executive of The Travel Network Group, during the Leaving Lockdown event, held by Travolution and sister brand Travel Weekly in London on Tuesday (July 27).

The industry has been lobbying for furlough to be extended beyond September as holiday bookings are still well below pre-pandemic levels because of Covid-19 travel restrictions.

Lewis said many retail staff have served 16-20 years but if an agency doesn’t have enough cash coming in, it won’t be able to pay their salaries from the end of September.

If two or three staff need to be made redundant, it might cost £15,000-£20,000 but agencies may not have the cash reserves to pay that amount so the business could fail.

He said another “heart-breaking” factor for agents to consider is the amount of debt that many have had to take on during the pandemic, anticipating it would be a problem lasting three to six months.

“Now staff are coming back but there is no demand, what are they going to do?” he told the session moderator Lee Hayhurst, executive editor of Travolution.

“The human impact side of those conversations we are having with those members is brutal on them, brutal on us, but the reality of where we are.”

Photograph by Steve Dunlop.

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