UK travel industry has reached a ‘critical point’

ABTA has revealed that 39,000 jobs in the outbound travel sector have been placed at risk or lost since the beginning of the COVID-19 crisis, which, including supply chain employees, means more than 90,000 people have been affected by the pandemic.

ABTA finds the Government’s Coronavirus Job Retention Scheme has been a significant help for businesses in the travel industry, with nine in ten businesses taking part in the scheme to support staff. Yet, with up to 65% of having to make staff cuts, the travel industry is at a tipping point, which is why ABTA has written to the Chancellor of the Exchequer to ask for tailored support in the form of a package of measures to support businesses and employees.

ABTA’s plan is to save the travel industry is:

1. Regionalise quarantine: moving to a regionalised quarantine and Foreign Office travel advice policy will provide additional certainty for businesses and consumers
2. Introduce testing: a testing regime will enable travel to resume to major global trading partners and mitigate the risk of infection from high-risk countries
3. Grant an APD holiday: to boost demand for travel, including Summer holidays in 2021
4. Provide recovery grants and other business support measures: travel agents, the vast majority of whom are SMEs, receive the majority of their income through commission that is paid on the departure, so these businesses will need support to get them through to the next major travel period next Easter. The Government can support these businesses by issuing another round of grants, based on those offered to Retail, Hospitality, and Leisure businesses earlier in the crisis, and extending other business support measures into 2021/22
5. Give ongoing salary support: with the furlough scheme drawing to a close at the end of October, the government should consider extending support for businesses that have not seen a significant recovery in revenues, as has happened elsewhere such as Australia. Targeting salary support where it is needed until March 2021 would reduce the cost to HM Treasury and could preserve tens of thousands of jobs in travel

To do reach pre COVID levels, ABTA believes the Government should take up a local approach to quarantine rules. In the absence of a regional approach to Foreign Office travel advice and quarantine rules the Association highlights it is difficult to see how the UK can reopen travel to critical trade partners, including the US, in the foreseeable future.

At the same time, if the travel industry is to retain the maximum number of jobs, it is vital that consumers are incentivised to book holidays. With the peak booking season starting from December, ABTA is urging the Government to use the Autumn Budget to announce an Air Passenger Duty (APD) holiday covering Summer 2021. If the Government does not act with tailored support for travel, as it has for other sectors, 83% of firms estimate that it will have a critical or serious impact on their business.

“We have hit a critical point”

Mark Tanzer, ABTA’s Chief Executive, says: “With the Government’s stop-start measures, the restart of travel has not gone as hoped for the industry, and sadly businesses continue to be adversely affected and jobs are being lost at an alarming rate. Coming towards the end of the traditional period for peak booking, we have hit a critical point as existing Government measures to support businesses begin to taper off, the consequence of which, according to this survey of ABTA Members will be ruinous for more people’s livelihoods.

“Travel desperately needs the Government in its next review to provide tailored support or tens of thousands more jobs will be lost. We have already seen well-known and respected businesses that would normally be successful falling into administration, and more are sadly set to follow unless the Government can Save Future Travel.”