The industry is at “a watershed” moment with businesses ‘between a rock and hard place’, according to industry financial adviser Chris Photi.

Speaking at the Travel Weekly Future of Travel summit, Photi said: “September-October was described to me by a colleague as a watershed for the industry. I agree.

“Travel businesses face the unenviable task of having to renew their Atol licences and to renew their Abta bonding, and both of those are going to have problems.”

Photi described bonding as “a critical issue” and asked: “How many bond insurers will be standing after this September renewal?

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“Go back to the late 2000s and there were 20 or so insurers and a thriving bond insurance industry. Now there is a handful and one or two are almost certainly saying ‘We’re not taking any more business’.”

He told the summit: “Many travel businesses also now have to face the end of furlough and the government support schemes for loans will come to an end.

“When you dovetail these things with the destination uncertainty and the kneejerk Foreign Office (FCDO) policy with regards to travel, you can see these are watershed months.

“Travel businesses find themselves between a rock and a hard place.

“The summer 2020 market has come and gone. The big question is will there be a winter 2021 market? Hopefully, we will see summer 2021 bounce back.”

Abta head of membership and financial services John de Vial agreed: “The situation is very serious.”

He told the summit: “Everybody has a degree of fear as to how long this will go on and how well the government will handle this from an economic point of view, because that has a huge impact on consumer confidence.

“We’re also in the thick of issues about the way travel advice is handled and whether it has itself become part of the problem for the industry.”

Industry lawyer Jo Kolatis, director of Themis Advisory, said: “We’ve never encountered a period like this. I see massive changes to the way businesses operate.

“Even businesses that had a strong balance sheet before the pandemic are facing tough times, because 2020 as a trading year has been decimated.”