Job losses are inevitable as furlough arrangements end and travel companies prepare to repay loans, according to leading industry accountant Chris Photi.
Speaking on a Travel Weekly Webcast, Photi, who is head of travel and leisure at White Hart Associates, warned: “Some people in the travel industry are going to lose their jobs.”
He commended the government’s job retention and business loan schemes, saying: “I have criticisms of the government, but not in those areas. The schemes have been really effective.”
But he added: “I don’t know whether it’s going to work out in the long run. Most businesses value skilled employees and don’t want to lose the skill set. I’m sure that will be the case in a large proportion of cases. But everybody is going to be looking at the fact that, ultimately, they have to repay these loans.”
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Asked if he foresees redundancies as the furlough scheme ends, he said: “Yes, bluntly. They [businesses] will be asking ‘What am I going to do to repay these loans?’ Staff is a key overhead. I can see travel businesses wanting to stretch resources as opposed to having the bodies the business probably needs.”
Photi warned the sector could see redundancies as extensive as in aviation, where airlines are seeking job cuts of 15% to 30%, saying: “It will be that sort of level, yes.”
However, he insisted: “I expect the trade to get back. You’ve only got to look at the statistics. In 1970, 200 million people were travelling. Last year it was 1.4 billion.
“Higher employment isn’t going to help initially; people being careful with their finances isn’t going to help. But ultimately the flow will come back. Travel gives people their most enjoyable experiences.”
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