The travel industry is “not out of the woods” despite many companies reporting a positive year of trading and sharing optimism for 2024, Abta’s chief executive has warned.
Speaking to Travel Weekly at the conclusion of the association’s Travel Convention in Bodrum, Turkey, last week, Mark Tanzer said there was still work to be done before the sector had fully recovered following Covid.
“Companies are not out of the woods yet,” said Tanzer. “They survived Covid by borrowing a lot of money, and of course they’ve got to pay that back. As interest rates have gone up, the cost of servicing that debt has gone up as well.”
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Tanzer said firms would need “sustained bookings going into next year” to get their balance sheets to the position they were pre-pandemic.
“Although trading is positive, there’s still work to do to repair the financial damage,” he added.
“But the fact demand is so strong in a cost-of-living crisis demonstrates that holidays are really important to people.”
Tanzer cited decarbonisation, particularly in the aviation sector, as one of the main hurdles facing the sector. He said it was vital that substantial investment was made to hasten the production of sustainable aviation fuel, fearing that without it the government could hike taxation to limit the number of flights.
The association said it was regularly communicating with the Labour Party as well as the Conservatives, and Tanzer believes “both parties understand the value of the sector”.
But he added: “It’s a constant job of ours to communicate to the government that it is not better if everyone has their holidays in the UK, because we don’t have the infrastructure to support that and we create so much economic activity through people going abroad.”
Looking ahead to 2024, Tanzer forecast growth in the cruise sector and a growing number of consumers altering their holidays to limit their impact on the environment. He also echoed a prediction in Abta’s Holiday Habits Report of more shoulder-season travel to secure cheaper prices.