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Travel sector battles to stave off end-of-furlough redundancies

Improved trading and negotiations with staff and landlords are easing the plight of travel firms as furlough ends but further job losses are still likely, according to the trade.

The government’s Coronavirus Job Retention Scheme was due to end this week despite repeated calls by the travel sector for it to be extended.

A survey by Advantage Travel Partnership from September 13 to September 26, covering the period when the changes to international travel restrictions were announced, found most members saw the end of furlough as their “biggest challenge” – but that the majority had found ways to stave off redundancies.

In the survey, 12% said they would be forced to make redundancies, 57% had agreed temporary reduced hours or reduced pay with staff, and 31% said they were returning staff to normal hours from October 1.

Leisure director Kelly Cookes called the results “reassuring” as they demonstrated members had “thought about this in advance and had the right conversations”.

She said: “The level of members saying they will need to make redundancies is less than we anticipated a few weeks ago and this is being helped by the improvement in trading, particularly late business, which is helping cashflow.”

The trade has relied more heavily on furlough than other sectors. A recent Office for National Statistics survey showed 28,900 operator and agency staff were still on furlough for the three months ending June 30, 2021, according to HMRC data. An Abta survey in August showed 43% of members’ staff remained on furlough and another in September suggested 69% of travel companies with staff on furlough expected at the time to make further redundancies once the scheme ends.

Abta chief executive Mark Tanzer told Travel Weekly the industry had to “keep up the pressure” on government for grants. “We’re keen there should be no further job losses,” he said.

The Specialist Travel Association (Aito) executive director Martyn Sumners said warned specialists would struggle. He said: “With the end of the furlough scheme… there will be more redundancies.”

Aito agency Oasis Travel managing director Sandra Corkin said the next few months would be “tough” with salary costs of its almost 50 staff back to 90% of pre-pandemic levels. Corkin said: “We have negotiated rent reductions for the next few months for most shops. Late sales have helped to provide commission to pay salaries.”

But agencies including Polka Dot Travel, Spear Travels and Premier Travel said they were already planning to recruit staff.

Mark Johnson, director of Polka Dot Travel, which made redundancies early in the pandemic, said: “Business is now stronger and enough to warrant us making recruitment a priority. Our problem is we are not in a position to open all our shops as we do not have enough staff.”

Spear Travels chairman Peter Cookson warned of a “brain drain” if the industry did not stop more employees leaving the sector. All its branches will be open and staff back as normal from October 1. He said: “It’s surprisingly hard to find staff in some areas.”

Premier Travel director Paul Waters said increased demand had allowed it to bring back staff on full pay and hours from October 1. It planned to advertise for staff this week.

Sister operator Premier Holidays was also recruiting but sales and marketing director Debbie Goffin acknowledged the end of furlough had created “a complex picture” different for individual travel businesses.

Elegant Resorts managing director Lisa Fitzell urged the sector to inspire young people to join the travel industry after losiing “very good people” to other sectors.

Travel recruitment firm C&M Recruitment said it was “exploding with vacancies” and warned firms to look at news ways of working to avoid losing staff. Director Barbara Kolosinska said: “If companies don’t offer good employment conditions, such as hybrid working or development plans, staff will leave.”

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