Associations and consortia representing agents and operators welcomed a number of measures outlined in today’s Budget but renewed calls for sector-specific support and acknowledgement of the length of time the industry would need to fully restart.
Measures confirmed in the Budget included an extension of furlough to the end of September, the extension of business rates relief to the end of June with a two-thirds rate for the remainder of the year, and an extension of lower VAT rates for hospitality and tourism businesses, with the 5% rate running to September 30 and an interim 12.5% rate in place until April 2022.
Mark Tanzer, chief executive, Abta, said: “We’re pleased to see the government has responded to many of our calls to extend furlough, business rates relief and VAT reductions. This will help to support jobs and businesses over the coming months.
“However, the chancellor must move beyond the government’s blind-spot concerning the impacts of international travel restrictions, and make support available to all travel companies whose business has been effectively closed by public health policy.
“The chancellor said there are extra grants for struggling businesses, yet many travel companies remain excluded from this critical support, despite not being able to generate income over the last 12 months.”
High street travel agents are set to be included in a list of non-essential retailers which are due to reopen from April 12 and will therefore have access to lower grant rates than businesses such as gyms and hairdressers which are forced to say closed longer.
But Tanzer said: “It is worth remembering that with overseas travel still closed, in the short to medium term, the income retail travel agents can generate will still be limited. As such, it’s important they qualify for higher levels of support.”
Gary Lewis, chief executive, The Travel Network Group, said: “The extension of furlough until September will create much-needed breathing space for many of those employed by the sector. The continued self-employment support extended and access to new restart grants will combine as a lifeline for many businesses striving every day to survive until travel can reopen.”
But he added: “Despite seeing green shoots of recovery, there is still a long road ahead for the industry and it now is essential the Global Travel Taskforce and then government agree the protocols to open up the borders safely to enable a full recovery not only for our travel industry but the whole economy.”
Julia Lo Bue-Said, chief executive of the Advantage Travel Partnership, also welcomed the extension of furlough and business rates relief but reiterated that significant revenue generation is still some way off for most travel firms.
She added: “While the plan to ease lockdown has initiated some positive signs of recovery in terms of enquiries and bookings, travel agents are in a state of financial limbo because the details of how and when we will travel is still fuelled with uncertainty and restrictions.
“We know testing is critical to the recovery of travel, and we need government to take a lead on bringing down the cost of testing so that a future holiday is still affordable for families. The media focus to date has been on leisure travel, however the government must not forget the lucrative business travel sector which will be intrinsic to the recovery of many other important sectors to the economy.”
Jacqueline Dobson, president of Barrhead Travel, said: “With the confirmation that furlough contributions for employers will increase from July, we must, in turn, see restrictions on travel ease in tandem to balance our recovery.
“As we wait in anticipation for further guidance from the Global Travel Taskforce, it is now imperative that this time is used for all four devolved nations to agree a collective response to reopening both inbound and outbound travel.”
Alistair Rowland, chief executive of Blue Bay Travel and Abta chairman, said: “Whilst the commitments to extend furlough, business rates holiday and VAT savings are helpful, there is little to support industries such as ours with specific issues, such as agents and operators who do not operate from retail premises.
“Equally, whilst the self-employed support scheme was extended, there is nothing to fill the gap for agents who operate as limited companies and pay themselves through dividend.
“Furlough cannot be maximised as the scale of amendments and cancellations continue, and are likely to until well into the summer, while the new loan scheme, underwritten by government, will help businesses but only increases debt to already damaged businesses who will struggle to achieve bonding in 2021.”
Clive Wratten, chief executive of the Business Travel Association, welcomed the furlough extension but said most TMCs would not be able to claim grants as they do not operate on the high street.
He added: “It is imperative that the new Global Travel Taskforce brings forward a framework in which business travel is fully integrated, and enables it to resume and contribute to the UK economy once more.”
Joss Croft, chief executive of UKinbound, said clarity was needed on eligibility for grants and said it was “disappointing and a huge missed opportunity” that sector-specific support was not being made available as it is in Scotland.
He said: “The extension of furlough is very welcome news for our industry, as is the business rates holiday and its further cut. We’re also pleased that leisure grants of up to £18k will be available for businesses that need to stay closed for longer, but we urgently need confirmation from government that tour operators, coach operators, language schools and event organisers will be eligible for these grants, having been unfairly excluded to date.
“The inbound tourism industry still has a long road to recovery and the government needs to recognise this.”
Danny Callaghan, chief executive of Lata and chair of the Travel Industry Alliance, said: “As a sector it will take months for us to wean off the furlough scheme, as business starts to come in, much of which will be deferred bookings and redemption of credits – it will be months before we see any significant new revenue coming into the sector, and we may well need furlough support until the end of 2021 to stave off significant job losses later in the year.
“The extension of business rate relief and the introduction of Restart Grants will be welcome for those parts of our industry that have a retail store front, but the majority of the sector continues to be excluded from this key piece of support.
“I was able to make this comment to the All Party Parliamentary Group for the Future of Aviation yesterday, and I hope that the parliamentarians that were present will bring this to the chancellor’s attention and lobby for a broader inclusion that will benefit the travel industry.”
To read industry reaction in full, click here.
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