The Specialist Travel Association (Aito) is asking for “urgent clarification” on three key issues proposed by chancellor Rishi Sunak to help businesses cope with the coronavirus crisis.
It welcomed the “first-aid package”, aimed at maintaining firms’ cashflow and the health of the UK economy but warned “there is usually a sting the tail”.
It is concerned about refunds for clients, the Coronavirus Business Interruption Scheme and whether travel agencies qualify for business rate holidays.
An Aito statement today said: “As SME businesses, we need urgent clarification on three of the chancellor’s key points:
“Firstly: We need clarification on the proposed system aimed at giving tour operators a breathing space before refunding clients when they are coping with (a) no new incoming business and, at the same time, (b) waiting for refunds yet to be received from their own airline and accommodation suppliers.
“It must be stressed that there is no intention whatsoever of reducing financial protection to the public – just a need to make this process manageable for tour operators without wiping out their liquidity and making it impossible for them to function.
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“Secondly: We await details regarding how the Coronavirus Business Interruption Scheme will work, to ascertain its potential usefulness (or not) to tour operators.
“It is not clear how interest payments will be handled after the first six months (which are interest-free), or whether such loans can be applied for later in the year.
“It would be pointless for tour operators to take out a loan today, for example, when they would find it extremely difficult to commence loan repayments due to lack of new holiday bookings whilst the vast majority of destinations worldwide are off-limits to travellers due to government edicts.
“The duration of the loan is another vital aspect – will businesses have, for example, options of 10-year, 15-year or 20-year loans? – as is, of course, the as-yet-unknown interest rate.
“Thirdly: The Government makes mention of retail/hospitality and leisure businesses being eligible for 100% rates holidays and a £25,000 grant for those working from premises with a rateable value of between £15,000 and £51,000.
“Aito members (operators and travel agents alike) certainly see themselves as part of the hospitality and leisure sector, under the remit of travel and tourism, but it is not clear whether outbound SME tour operators – who are very much in need of such help – are included in the government’s interpretation of what a retail, hospitality or leisure business looks like.
“Aito members anxiously await this important clarification.
“We would also like to see the maximum rateable value for businesses increased considerably.
“While regionally-based businesses may be covered by the £51,000 cap, few of those based in metropolitan areas will be eligible.”