‘We hope September sees some sort of restart, but there is no certainty’ Business Travel Association chief executive Clive Wratten tells Ian Taylor
The outbound leisure travel sector has experienced a torrid summer, with the government’s policy of quarantine and travel corridors producing a stop-start-stall in the resumption of travel post-lockdown.
But despite the uncertainty, at least there has been a restart of sorts. The corporate travel sector has made much less progress and everyone expects a sizeable lag in the resumption of business trips
Business Travel Association (BTA) chief executive Clive Wratten says: “We’re hoping to see some corporate travel start in September. [But] every day it gets tougher.
“The news on Spain [the government’s re-imposition of quarantine restrictions on returning travellers] knocked confidence among corporates.
“We hope September sees some sort of restart, but there is no certainty. Consistency is the thing. We need consistency to bring confidence. It’s very difficult if you bring everyone back [into work] and then have to stop.”
Wratten insists: “All areas of the industry are in dire straits.”
However, he believes the corporate travel sector requires some urgent special assistance if up to half the jobs at travel management companies (TMCs) are not to disappear before next year, when it’s hoped the short-term prospects for business travel might improve.
Wratten says: “Furlough is ending in October and the biggest cost for TMCs is wages.
“Low numbers have returned from furlough [in the sector]. If there is no travel, you can’t bring people back. You’re only going to take people back if you have money coming in the till. We see 50% of jobs at TMCs at risk.”
So last week the BTA wrote to Chancellor Rishi Sunak and business secretary Alok Sharma requesting ‘repayable business support’ to cover 60% of the salaries of employees at TMCs until at least the end of 2020.
Wratten explains: “The government is determined to end furlough at the end of October. We appreciate it can’t go on forever. But this would give us an extension at least to the end of the year.
“We would pay back the money to the government at 10% a quarter when in profit.”
The BTA also called for a 12-month holiday on business rates for the sector – relief already extended to the hospitality and leisure sectors.
Wratten says: “We fall outside leisure and hospitality so we don’t qualify for relief on business rates. Airports are calling for this as well.”
In addition, the association added its voice to industry calls for a temporary suspension of air passenger duty (APD).
Wratten argues: “The government has to look at ways to make an impact. If it wants to see our industry getting people travelling again, one way to do that is to knock out APD.
“Removing it would be good for the industry and the economy.”
When it is pointed out the government’s temporary cut in VAT on hospitality and leisure has frequently not been passed on to consumers, Wratten insists: “I would be extremely disappointed if airlines did not pass an APD cut on to customers.”
He says: “Business travel tends not to be recognised for the importance it has. It is not just about corporates, our members handle ships’ crews, medical supplies, humanitarian aid.
“Corporates need to see their customers. A huge amount of business travel needs to get going.”
But he concedes: “It’s difficult to see much activity in meetings and events for the rest of this year.”
The big network airlines which carry the lion’s share of business travellers are not expecting a rapid return of corporate traffic.
Lufthansa Group chief executive Carsten Spohr noted last week: “Corporates are very much driven by travel restrictions.”
Willie Walsh, outgoing chief executive of British Airways parent IAG, said a few days earlier: “The leisure market is recovering ahead of the business market. We expect a structural change in the business.”
Wratten acknowledges: “We’re talking about 2023 or 2024 before we get back to where we were. It’s hard to predict now. Video conferencing has proven to work, but equally you have to meet people.”
He wants to see government support for Covid-tests on air passengers as way to relax quarantine restrictions and sees major corporate travel routes as the ideal testing grounds.
Wratten says: “Testing could be implemented quickly for a trial period and business travel would be a good medium to test it in.
“We support the government investigating testing alongside quarantine.”
He adds “we’re talking to Heathrow and it’s ready to go” and suggests “a corporate with a duty of care” would not be put off by the cost of around £150.
But Wratten concedes: “It’s not for the next few weeks.”