A five-point plea to ‘save future travel’ is being put forward by Abta to government on Monday as estimates reveal that almost 40,000 jobs have already been lost or placed at risk across the outbound travel sector since the Covid-19 crisis started.
The number of people affected rises to more than 90,000 when supply chains are also considered.
The majority (83%) of firms fear a critical or serious impact on their businesses if ministers do not act with tailored support for travel, as they have for other sectors.
As many as 18% of jobs in outbound travel have already been lost or placed at risk, according to a new Abta member survey.
The situation is set to deteriorate further with 78% of businesses yet to enter redundancy discussions expecting to do so in coming months based on current trading conditions.
The travel association has today written to chancellor Rishi Sunak seeking tailored support outlined in a plan designed to rebuild consumer confidence and save industry jobs. The plan builds on demands made of government in the association’s first Save Future Travel campaign, which resulted in more than 24,000 letters being sent to MPs in April.
The call comes in the wake of the failure of STA Travel on Friday, with the potential loss of almost 500 jobs with the closure of 49 retail branches.
Abta’s plan to ‘save future travel’ is to:
- Regionalise quarantine: moving to a regionalised quarantine and Foreign Office travel advice policy will provide additional certainty for businesses and consumers
- Introduce testing: a testing regime will enable travel to resume to major global trading partners and mitigate the risk of infection from high risk countries
- Grant an APD holiday: to boost demand for travel, including summer holidays in 2021
- Provide recovery grants and other business support measures: travel agents, the vast majority of whom are SMEs, receive the majority of their income through commission that is paid on the departure, so these businesses will need support to get them through to the next major travel period next Easter. The government can support these businesses by issuing another round of grants, based on those offered to retail, hospitality, and leisure businesses earlier in the crisis, and extending other business support measures into 2021/22
- Give ongoing salary support: with the furlough scheme drawing to a close at the end of October, the government should consider extending support for businesses that have not seen a significant recovery in revenues, as has happened elsewhere such as Australia. Targeting salary support where it is needed until March 2021 would reduce the cost to HM Treasury and could preserve tens of thousands of jobs in travel.
The government’s Coronavirus Job Retention Scheme has helped the travel industry, with nine in ten businesses taking part in the scheme to support staff.
But 65% of firms have either had to make redundancies or have started a consultation process, according to Abta.
Despite this, there is optimism that the travel industry can recover, if offered the right support by government, with four in ten businesses confident travel can return to 2019 levels by 2022, according to the Abta research.
But to do this, the government should adopt a regionalised approach to quarantine rules. In the absence of a regional approach to Foreign Office travel advice and quarantine rules the association warns it is difficult to see how the UK can reopen travel to critical trade partners, including the US, in the foreseeable future.
At the same time it is vital that consumers are incentivised to book holidays if the travel industry is to retain the maximum number of jobs.
With the peak booking season starting from December, Abta is therefore urging the government to use the autumn Budget to announce an APD holiday covering summer 2021.
While public health is rightly the government’s priority right now, few sectors in the UK economy have been hit as hard as travel by the measures used to control the pandemic, Abta argues.
With only 65% of businesses operating again, many parts of the travel industry remain shuttered, such as cruise and school travel operators.
And if a second wave forced a further shutdown, 96% of travel businesses report it would have a critical or serious impact on their ability to survive.
Abta chief executive Mark Tanzer said: “With the government’s stop start measures, the restart of travel has not gone as hoped for the industry, and sadly businesses continue to be adversely affected and jobs are being lost at an alarming rate.
“Coming towards the end of the traditional period for peak booking, we have hit a critical point as existing government measures to support businesses begin to taper off, the consequence of which, according to this survey of Abta members will be ruinous for more people’s livelihoods.
“Travel desperately needs the government in its next review to provide tailored support or tens of thousands more jobs will be lost.
“We have already seen well-known and respected businesses that would normally be successful falling into administration, and more are sadly set to follow unless the government can save future travel.”