More than half of independent travel agents fear they won’t last three months and a third of industry jobs are at risk, according to analysis from Abta.
The association said 57% of small and medium sized travel agents believe they will not have the cash to survive any longer based on current trading conditions and available government support.
It estimates that 195,000 people working in the UK travel industry have either lost their job or are at risk of losing their job due to the Covid-19 crisis.
Abta shared the analysis as it reiterated calls for the UK government to provide tailored financial support to struggling businesses, and to safely restart travel so that businesses can generate income this summer.
The sector employs more than 526,000 people across the UK in ordinary times, so the analysis suggests the livelihoods of 37% of people in the industry face being wiped out.
Abta says the findings show the “immense pressure” the travel industry is under after almost 18 months of severe restrictions which have curtailed the sector’s ability to trade.
It is urging the government to deliver a package of tailored financial support to see the industry through to recovery, which includes extending existing furlough and self-employed income support, extending full business rates relief and creating a new sector-specific ‘recovery grants’ regime for travel agents, tour operators and travel management companies.
The association says it is particularly critical that support is extended given that employer furlough contributions are due to rise at the end of the month and business rates relief will be tapered.
With international travel still largely restricted, and the government urging people not to holiday overseas, travel businesses will not have the money to cover these costs, Abta said.
The government is expected to review the requirements for international travel on June 28, and the industry is also awaiting the next review of the traffic light list.
Abta says the traffic light system, launched last month when the government said it would deliver a safe, meaningful, risk-based restart to international travel, has been a “false start”, which has “further dented consumer confidence at a critical time” as a second summer season could be lost to Covid.
Abta is calling on government to use the forthcoming review to deliver a comprehensive risk-based restart of international travel for the peak summer season, which includes:
- Allowing travel to reopen under the traffic light system as intended.
- Adding more countries to the green list where vaccination rates are high and infection rates are low.
- Using the watchlists to provide stability, and the islands policy to differentiate the treatment of island areas from that of mainland areas.
- Capitalising on the success of the vaccine rollout by relaxing testing and quarantine requirements for fully vaccinated individuals.
Mark Tanzer, Abta chief executive, said: “Travel businesses feel completely abandoned by the government, which has consistently failed to provide adequate support for an industry which has borne the brunt of the economic fallout from the pandemic.
“People have worked tirelessly through the pandemic trying to stay afloat, taking on extra jobs, having to make long-standing, valued staff redundant, worrying about mounting debts. While we can clearly see the financial toll with jobs and businesses lost, the emotional toll of this ongoing battle, which still has no discernible end in sight, cannot be underestimated.
“Unless the government’s strategic review of international travel on 28 June brings forth a sensible plan for travel to reopen for the summer and targeted support that recognises the catastrophic economic hit that the sector has taken, the industry will truly begin to buckle before the summer is over.”
The travel industry has taken the biggest economic hit of all sectors impacted by the pandemic, with Office of National Statistics figures showing revenues for travel agents and tour operators have been consistently down between 86-90% each month since February 2020].
Travel businesses have had no sector-specific support from the UK government and have had limited access to more general grant support measures.
Retail travel agents were only deemed eligible for the minimum restart grants, tour operators were excluded entirely and less than half of travel companies were able to use the furlough scheme as staff were needed for non-revenue raising activities, such as issuing refunds and managing holiday rebookings.
On Wednesday June 23, employees and businesses from across the aviation and travel industries – airlines, airports, tour operators, travel agents, suppliers and partners – are coming together for a Travel Day of Action (#traveldayofaction) to raise awareness of the challenges facing the travel industry.