Trade hopes for August boost fade ahead of traffic light system review

Outbound sales for August are not expected to pick up substantially whatever the government decides in a review of the traffic light system due this week.

Industry sources fear consumer confidence in being able to travel without restrictions changing has been damaged beyond immediate recovery. However, there is greater confidence bookings will recover beyond the next few weeks.

A senior leisure industry source told Travel Weekly: “The situation is not as clear as it would have been because of France and the uncertainty around the amber list. It will continue to be an incredibly late market.”

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However, the source insisted: “It’s not the volume, it’s the margin that matters now, and it’s not just the state of play at the moment, it’s about confidence in the medium to long term. We’re moving in the right direction [and] the data seems to support the argument that strong vaccination supports an opening up.

“But summer will be more damaged than we hoped. It’s a market in which you don’t have to make a decision. You’re not going to lose out by delaying.

“It’s a case of how strongly prices hold up. It’s just so painfully slow – it’s going to leave some people in trouble although the pattern of low-level failure hasn’t changed. From an investor point of view we don’t have a problem. The low level of failures shows that.”

A second source described August demand as “dampened” and warned: “An announcement this week is not going to save August. A lot of people have made their plans. We hope this week paves the way for some growth and doesn’t add complexity. But we’re playing catch up.”

Another senior industry source denounced communication of the France ‘amber-plus’ decision as “appalling, farcical” arguing: “They must have been discussing it for a while. Why not say ‘We’re concerned about France’ rather than just announce it on a Friday evening? Why wasn’t it part of the country review [two days before]? It totally dented confidence.”

The source told Travel Weekly: “Operators were waiting for operational guidance on the new arrangements from Monday [of that week]. On Friday they were still waiting. On Friday afternoon there was a call with Border Force but no mention of France. It’s totally dysfunctional.”

A second source agreed: “It was a total communications failure – a fiasco. It did a lot of damage to industry and consumer confidence.”

Alan Bowen, legal advisor to the Association of Atol Companies, described the decision as “a stab in the back to the industry” saying: “It undermines people’s confidence when confidence is everything at the moment.”

There are hopes this week that the restrictions on France could be lifted, but also media speculation that the Balearics, Spain and even Italy might join the amber-plus category.

Bowen suggested a change for France may come “too late” for August arguing: “The schools are closed. People have made their decisions.

“Most people think August won’t get better. There is some hope things will be better by September when more young people will be double vaccinated and there are bookings in October and November. But August is dire. There are too many uncertainties.”

He warned: “There has to be concern about the finances of some businesses. Furlough ends in September. The plate is almost empty. I fear we’ll see redundancies in the next eight to 10 weeks.”

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