The industry will see more failures if holidaymakers aren’t able to depart in the peak summer months, warn travel bosses.
They sounded the alert in the wake of the report from the government’s Global Travel Taskforce on Friday, which outlined steps towards the resumption of non-essential international travel.
Destinations on the ‘green’ list are set to be published by early May, while a ‘green watchlist’ will indicate which countries may change to ‘amber’.
Speaking on a Travel Weekly webcast, Alistair Rowland, chief executive of Blue Bay Travel and chairman of Abta, said consumers are being cautious because of confusing messages and the cost of tests so 85% of his company’s business was currently for October onwards.
When asked if there could be more failures if travel companies don’t manage to make money in the coming summer, he said: “Yes, for sure.
“It’s been remarkable really, that there have been just less than 30 failures in a year in an industry with very long food chain in terms of all the suppliers within the tourism industry.
“If there’s no summer, the weaker agencies and tour operators won’t have any cash.
“They’ll already be heavily leveraged, they will have all the government borrowings, they’ve got to start paying that back.
“They won’t be able to bond through insurance, so any cash they’ve got will be supporting a bond.
“It will have an immense effect if there is no summer for agents and smaller tour operators.”
He said agents and operators tell him they want to ensure departures in August, September and October – and many are not selling early summer holidays because of the uncertainty about testing and traffic light categories.
“We don’t sell anything before July 1, for example,” he said.
“You’ve got consumers who amended three times now, starting with Thomas Cook.
“You’ve got to take a point when you think that things are practical to operate.
“People will be looking at their cash flow to get the second half of the summer season, and they’re looking at the cash position for those three months being active months.”
Gemma Antrobus, Haslemere Travel owner and Aito Agents chair, highlighted how there is still no sector-specific support from the government for the travel industry.
“On behalf of all of the Aito agents, it’s a really tricky position,” she said.
“We are absolutely stretched to capacity, whether it’s, like myself, you’re still working on your own a year later, with staff on furlough, you still have overheads, you still have costs, tax and NI all these kind of things that need to be paid for, yet nothing’s coming in.
“I know many people who refinanced their homes and all kinds of stuff to support their businesses, not ever imagining that we would still be in it this long.
“The sheer disregard for an industry that creates so much money for our economy is just basically negligent…and we are treated with such disregard.
“As my grandfather used to say, it’s like giving a donkey one oat. We really haven’t heard anything that’s particularly useful…[or] really gives us any kind of hope for anything before…maybe July.”
John Bevan, dnata B2B chief executive for Europe, agreed, saying: “There’s just too many businesses that will need a decent summer, because a lot of people are carrying vast amounts of credit notes, lots of their staff on furlough, no cash coming in.
“There’s a lot of companies are going to be in a difficult situation unless they’ve got fresh bookings coming in.”
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