The anticipated extension of the furlough scheme and business rates relief will be a ‘life saver’ in the short term, say travel agents.
Chancellor Rishi Sunak (pictured) is expected to announce in the Budget on March 3 that business rates relief will continue beyond the end of April, its current end date.
The Coronavirus Jobs Retention Scheme (furlough) is touted to be kept on until the summer to prevent a rise in unemployment as lockdown eases.
Wording in the government’s roadmap report said it will “carefully tailor” support for businesses as to “reflect the changing circumstances”.
Boris Johnson acknowledged in his speech on Monday that retail, hospitality, tourism and aviation were among the “hardest-hit” sectors – but said Sunak would give an update on support measures next week.
Bailey’s Travel managing director Chris Bailey, who owns shops in Wellingborough and Leighton Buzzard, said rates relief and an extension of furlough “will be a life-saver in the short-term, as we are fast running out of cash”.
“I suspect every other high street agent is in a broadly similar position,” he said, adding: “The support needs to go well beyond the summer or there will be an avalanche of failures.”
Spear Travels chairman Peter Cookson, who is about to embark on further rent negotiations with landlords, agreed.
“The extension of furlough will be hugely welcomed as will the business rates relief. Every penny counts.”
Fred Olsen Travel head of commercial Paul Hardwick said furlough extension was vital as sales volumes would not justify all staff returning to work by May.
He said: “Although business is increasing as more of our customers receive their first jabs, most business is for departures towards the end of this year or for 2022 so we are still not seeing any actual cash come through to our business.
“At the moment our operating hours are a third less than they should be and it is very hard to see that it would be justifiable to increase from 30 hours a week to 45 in all 14 of our shops as early as May if travel is still prevented by restrictions.”
Miles Morgan Travel owner Miles Morgan called the extensions ‘crucial’. He said: “With Scotland having made their decision, it would be surprising if Rishi Sunak did anything different, particularly with regards to the state of the high street. It would make the difference of keeping going for lots of businesses.”
Paul Waters, director of Premier Travel, said an extension of furlough and rates relief would give “an additional boost to our current budget and will be a huge support”.
He said: “It will give us some additional money and support needed well into 2022 as we know that, even with initial pent-up demand coming through, the recovery of travel is still likely to be gradual, as not all destinations will open up at once and not everyone will feel comfortable to travel straight away.
“We would welcome the extension of both schemes along with tailored financial support from the government to help all travel business through.”
Travel agency consortium, the Advantage Travel Partnership, said it was “good news” that the prime minister indicated financial support measures would be announced by the chancellor.
“However, for the travel industry who need their staff to be working to manage re-bookings they are unable to take full advantage of furlough,” said chief executive Julia Lo Bue-Said. “With no trade for 12 months and restrictions still in place for at least another three months, it’s evident that the chancellor really needs to consider how the sector can be supported further.”
Abta said it was “pleased” with the government’s acknowledgement that some sectors are harder hit than others, and its response to calls to engage with the travel industry.
A spokeswoman said: “Now, the government needs to use March’s Budget to provide tailored financial support to the travel industry recognising businesses have generated little income over the last 12 months.”
Abta wants the chancellor to expand the grant schemes available to support all travel businesses and extend furlough, VAT deferrals, business rates relief into the next financial year.
The government confirmed this week that Sunak will issue his final report on a review of business rates, which will consider a potential online sales tax to help boost high-street retailers, in the autumn.