Chancellor urged to help ‘forgotten’ travel sector

Travel has become the “forgotten sector” with as many as one in six jobs lost or put at risk due to the Covid crisis.

The dire picture is painted in a renewed plea by a coalition of travel organisations urging the chancellor to deliver tailored financial support in next month’s budget.

They argue that the travel industry cannot wait for a full rollout of the vaccine before people start travelling again.

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Not only would another summer season lost to the pandemic be a “seismic blow” to the sector – it would also threaten the industry’s and UK’s recovery.

Twelve travel organisations that make up the Save Future Travel Coalition argue that the need for support is becoming even more critical as businesses head towards a year of lost income, and deadlines for government-backed loans and the end of furlough looming in April.

The coalition, including Abta, Aito, Advantage Travel Partnership, the Travel Network Group, the Scottish Passenger Agents Association and Clia, agrees that public health is the priority and understands the government needs to take the steps it feels necessary to stop the spread of the virus and new variants entering the country.

But comments from senior ministers about not booking summer holidays are “misjudged” as it is “too early to make such predictions which only serve to further erode consumer confidence”.

In a letter sent to Rishi Sunak today, the industry outlines how it has had little opportunity to operate or generate income over the last 12 months.

Coronavirus started to affect travel as early as the end of January 2020 and a mounting number of restrictions preventing trade since then.

There was just a three-week window between March 2020 and January 2021 when people could travel to the whole of Spain, the UK’s favourite foreign holiday destination.

The letter came as it emerged that an announcement due today (Thursday) on the introduction of quarantine hotels by health secretary Matt Hancock had been pushed back, possibly until next week.

Home secretary Priti Patel admitted there is still no plan to make it happen, reported Today.

She told the BBC Radio 4 programme: “These are big logistical and operational programmes that we are talking about.

“They are under way in terms of the work and programming and my colleagues in government will make the announcement about the date and when that will be rolled out in due course.”

The coalition argues that the travel industry is a significant contributor to the UK economy and vital for the UK’s post-pandemic recovery, and calls on the chancellor to:

  • Expand grant schemes available to support all travel businesses.

“Liquidity is the single biggest challenge facing travel businesses today, but existing grants schemes do not address the trading consequences of severe restrictions on international travel. With the vaccine rollout progressing well, companies need help to bridge the gap and survive through to recovery,” according to the coalition.

  • Extend other financial support mechanisms, such as furlough, VAT deferrals, business rates relief, loan re-payments, into the next financial year.

“It is particularly important that the furlough regime be extended in recognition that travel will likely restart gradually,” the coalition says. “To save jobs, salary support must be kept in place until recovery in the sector is gathering pace.”

  • Enable travel businesses to trade their way out of the crisis in the coming months.

“The government must work with the industry to put in a place a roadmap to recovery, which ensures stability for travellers and travel companies, and crucially, which uses existing mitigation measures to ensure travel can resume in a risk-controlled manner,” the industry adds.

The letter highlights as many as one in six travel jobs have been lost or put at risk and travel companies large and small have gone out of business since the start of the pandemic.

ONS data show travel has been the hardest hit sector – with revenue down 90% from February to October.

But the government has not provided any tailored financial support to help the industry get through the crisis, unlike other sectors such as hospitality, culture and the arts,

In normal times travel contributes £80 billion to the UK economy and generates more than £11.5 billion for the exchequer.

It is also travel agents, tour operators and business travel companies that sustain the UK’s regional and international connectivity, described as a crucial component to the UK’s recovery.

The group also points out that the UK is at risk of falling behind its international rivals, as countries such as France and Italy have already created specific grants support schemes for their travel industries.

There is also a growing level of disparity within the UK, as the devolved administrations make support available to travel companies that is not available to those based in England.

The Scottish government and Northern Ireland executive have announced plans for travel agent specific funding schemes. The Welsh government is alone in enabling tour operators to access existing support.

Abta chief executive Mark Tanzer said: “Government policies to curtail international travel have had a devastating impact on the industry.

“Despite its significance to the UK economy and its recovery, travel has become the forgotten sector, and businesses are running on empty due to a lack of tailored financial support from the UK government.

“The chancellor has an opportunity to address this in his budget. Supporting the sector through this time of crisis will payoff for the taxpayer and the wider economy.”

Advantage chief executive Julia Lo Bue Said added: “While the policy measures introduced, such as quarantine, travel corridors, testing, and localised restrictions on travel, are understandable from a public health perspective, they also diminish consumer confidence and damage trade.

“Yet, to date, these measures have not been combined with tailored financial support targeted at addressing the consequences of these policies for the businesses affected – as a result our members are under enormous pressure.

“We need government to address this as a matter of urgency and work with the industry to develop a roadmap to reopen travel.”

Business Travel Association chief executive Clive Wratten said:
“The business travel community has been almost entirely forgotten.

“Alongside our colleagues in the leisure industry, we are asking the chancellor to set out targeted support for our industry in his budget.

“If we are to be a global Britain, business travel must commence at the earliest safe date and there needs to be an industry to support this vital economic contributor. Without targeted support, many businesses will rapidly collapse and thousands of jobs will be lost.”

UKinbound chief executive Joss Croft said: “Many businesses are stuck between a rock and a hard place – they can’t trade to generate income but they’re also shut out of support.

“Businesses in the travel sector, including destination management companies, coach operators, and tour operators, as well as many others, are entirely excluded from existing grants support packages.

“The UK government needs to show they value the UK’s world-class travel and tourism industry.”

MoreMinisters ‘can’t close down travel and argue against support’

Agents’ calls for industry support intensify

Special Report: Why has access to financial support been so difficult?

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