UK’s economic recovery will be dependent on a strong travel and tourism industry, ABTA says
ABTA says the travel industry has had no opportunity to recover since the start of the pandemic as new figures reveal that nine in ten holidays in July and August were changed or cancelled due to restrictions.
Research found that despite the opening of travel corridors, 91 per cent of holidays were affected in this period. The lack of an opportunity to recover means that in the current trading conditions businesses expect to end the year 93 per cent down on bookings compared to this time last year.
Even before the latest lockdown, redundancies are estimated to have almost doubled over a three-month period – with 164,000 people either losing their jobs or having their jobs at risk in the travel and wider industries, up from 90,000 in August 2020.
The new findings are from a survey of ABTA Members carried out at the end of October before the latest lockdown measures were announced. They also reveal that a third of businesses (36 per cent) have not yet resumed active operations since the UK-wide national lockdown – demonstrating the constraints on the sector.
ABTA has renewed its calls to government to deliver a plan which provides tailored support for the industry and put measures in place to ensure a swift return to travel and boost consumer confidence after the lockdown has lifted.
It acknowledges that while positive developments this week, in terms of securing a vaccine, will go some way to restoring consumer confidence in booking future travel plans, travel businesses need help now. It highlights that while other sectors – like hospitality, culture and the arts – have received specific support from the government, travel businesses have been left wanting.
ABTA argues government policy has stood in the way of a recovery. Under government measures sectors like school travel and cruise are closed altogether, while others are barely able to operate as the destinations which were open through travel corridors, have only been so for short periods of time due to last minute policy changes. Some sectors, such as winter sports and long-haul travel, have no open destinations.
Having a strong travel and tourism sector will be important for the UK’s economic recovery with travellers contributing more than £65bn annually in GVA while generating spending of more than £85bn in the domestic economy pre-Covid-19. ABTA also says the strength and speed of recovery will be intricately linked to the UK’s connectivity, domestically and internationally, and the ability of UK businesses to access the global trade links that the travel industry underpins.
It is also important for the UK’s imports and exports, as significant volumes of goods are imported and exported in passenger planes – with UK regions more dependent on passenger aircraft to transport goods. Covid-19 has not only drastically curtailed tourism and passenger movements, but also disrupted freight flows. The government needs to support the industry so that these goods routes are preserved and ready for the recovery.
While this year has been dire for the industry, ABTA’s findings show the demand for travel remains and green shoots are appearing in bookings for next year. Members report taking 45 per cent of the bookings for summer 2021 they would have expected to have taken at this point in the booking cycle, which, although far behind normal, is an improvement on the near-term bookings.
Mark Tanzer, chief executive of ABTA, said: “The travel industry has had no meaningful chance to recover – bookings have largely vanished, cancellations are common as destinations move on and off the travel corridor list and the government is yet to deliver a testing framework for industry and customers. The results are stark for businesses – job losses mounting at an alarming rate and viable, longstanding businesses closing their doors for good.
“But there is demand for travel and we are starting to see people booking for summer 2021 – demonstrating the importance of travel and resilience of the market. This will no doubt be boosted by the news of a vaccine, but we must remember that a robust vaccine programme is many months away and the industry is struggling now.
“It is short-sighted of the government to overlook the industry as travel is fundamental to the UK’s economic recovery. Our Members’ customers pay the airfares which fund the passenger planes and routes – underpinning the UK’s connectivity and imports and exports. We need the government to step in and support the industry now – as it has done for other sectors – so that the industry is ready to support the UK’s wider economic recovery. Without action the Government risks jeopardising the speed to which the UK’s economy can come back from the pandemic.”
ABTA is calling on the government to:
- Provide tailored financial support for travel businesses, including renewed grant support for SMEs and those who were excluded from previous support measures, as well as salary support which is flexible enough to allow staff to process refunds whilst in receipt of support.
- Introduce a testing regime without delay and lead international coordination of testing with the aim of removing quarantine. Opening more destinations to the UK traveller and reducing quarantine to as short as possible for arrivals and returns to the UK.
- Fully regionalise the UK’s quarantine policy and approach to FCDO Foreign Travel Advice. This would mirror the approach already adopted domestically and in other countries such as Germany and the Netherlands, allowing a more targeted assessment of risk and the reopening of important trading routes with partners such as the US.