Abta today issued a fresh appeal to government to act to save the UK travel sector from the brink of collapse due to Covid with a warning that job losses have doubled in the last three months.
Even before the latest lockdown, redundancies are estimated to have risen with 164,000 people either put out of work or having their jobs put at risk in the travel and wider industries, up from 90,000 in August.
Firms expect bookings from October to the end of 2020 to be 93% down compared to the same time last year.
As many as 91% of holidays in July and August were changed or cancelled due to restrictions despite the opening of travel corridors.
While securing a vaccine will go some way to restoring consumer confidence in booking future travel plans, travel businesses need help now, the travel association urged.
Abta believes travel businesses “have been left wanting” while other sectors like hospitality, culture and the arts have received specific government support.
The travel industry has had no opportunity to recover since the start of the pandemic. A third (36%) of businesses have not yet resumed active operations since the national lockdown.
Government policy has stood in the way of a recovery, the association argues, with sectors like school travel and cruise closed altogether.
Others are barely able to operate as the destinations which were open through travel corridors, have only been so for short periods of time due to last minute policy changes.
Some sectors, such as winter sports and long-haul travel, have no open destinations.
However, demand for travel remains and green shoots are appearing in bookings for next year.
Abta companies report taking 45% of the bookings for summer 2021 they would have expected to have taken at this point in the booking cycle. Although far behind normal, this is seen as an improvement on near-term bookings.
The findings are revealed in a new survey of members conducted out at the end of October before the latest lockdown measures were announced.
The plight of the UK travel industry is highlighted as the government’s Global Travel Taskforce led by transport secretary Grant Shapps and health secretary Matt Hancock is due to report to the prime minister.
Abta renewed its call for tailored support for the industry to ensure a swift return to travel and boost consumer confidence after the lockdown has lifted.
Chief executive Mark Tanzer said: “The travel industry has had no meaningful chance to recover – bookings have largely vanished, cancellations are common as destinations move on and off the travel corridor list and the government is yet to deliver a testing framework for industry and customers.
“The results are stark for businesses – job losses mounting at an alarming rate and viable, longstanding businesses closing their doors for good.
“But there is demand for travel and we are starting to see people booking for summer 2021 – demonstrating the importance of travel and resilience of the market.
“This will no doubt be boosted by the news of a vaccine, but we must remember that a robust vaccine programme is many months away and the industry is struggling now.”
He added: “It is short-sighted of the government to overlook the industry as travel is fundamental to the UK’s economic recovery.
“Our members’ customers pay the air fares which fund the passenger planes and routes – underpinning the UK’s connectivity and imports and exports.
“We need the government to step in and support the industry now – as it has done for other sectors – so that the industry is ready to support the UK’s wider economic recovery.
“Without action the government risks jeopardising the speed to which the UK’s economy can come back from the pandemic.”
Abta is calling on government to:
- Provide tailored financial support for travel businesses, including renewed grant support for SMEs and those who were excluded from previous support measures, as well as salary support which is flexible enough to allow staff to process refunds whilst in receipt of support.
- Introduce a testing regime without delay and lead international coordination of testing with the aim of removing quarantine. Opening more destinations to the UK traveller and reducing quarantine to as short as possible for arrivals and returns to the UK.
- Fully regionalise the UK’s quarantine policy and approach to FCDO foreign travel advice. This would mirror the approach already adopted domestically and in other countries such as Germany and the Netherlands, allowing a more targeted assessment of risk and the reopening of important trading routes with partners such as the US.
Responding to the Abta research findings, Which? Travel editor Rory Boland said the consumer group had been calling for tailored support for the travel industry since the start of the pandemic.
“Many firms that would ordinarily be in good financial health have been left on the brink of bankruptcy,” he added, claiming that others have instead “broken the law” in order to try and stay afloat – forcing customers to bail them out by illegally withholding refunds.
“With England’s second lockdown likely to affect many more winter holidays, there is a real risk that thousands more people will be left out of pocket and struggling to get their money back,” Boland said.
“To prevent this, the government must step in with support for holiday operators in the form of a Travel Guarantee Fund, to ensure they can process refunds swiftly without risking going under.
“Airlines must also play their part in returning money to tour operators quickly – so the aviation regulator must be given the powers to take a tougher line with those that fail to do so.”