//Support package needed as furlough costs rise
Future travel

Support package needed as furlough costs rise

As furlough costs increased from August 1 and with overseas travel subject to continuing restrictions, the travel sector is urging the Chancellor and Business Secretary to provide financial support for the industry

The Save Future Travel Coalition has warned that jobs, livelihoods and businesses are at risk, as UK businesses face the rise in double costs to furlough contributions. The Coalition would like to raise awareness of the unique circumstances that the travel industry is currently facing. 

With the return to international travel continuing to be unpredictable, the group says the pace we’re moving at is too slow for businesses to be able to capitalise on travel from the peak summer months. 

Fully vaccinated travellers returning from amber list countries no longer have to quarantine, however other restrictions remain in place and the lifting of such rules has come late in the summer season.

The Coalition, made up of 16 leading travel associations which represent inbound and outbound travel, is urging chancellor Rishi Sunak and business secretary Kwasi Kwarteng to provide ongoing financial support for the UK travel industry by: providing full furlough support, plus other income support schemes; introducing a grant scheme dedicated to help international travel businesses through the coming weeks and months; and providing 100% business rates relief for the financial year, following suit from other Devolved Administrations. 

Chief executive of ABTA, Mark Tanzer, said: “International travel hasn’t returned to the extent that all businesses feel confident they’ll make it through the pandemic and the government has done nothing in terms of providing tailored financial support for travel agents and tour operators.

“There are still a lot of very worried companies out there, particularly the smaller, independent agents and operators, who aren’t seeing anywhere near the level of bookings they need to cover their costs — let alone return any sort of profit. At the same time, general business support from government is being reduced, adding even more financial pressure. Government needs to wake up to the crisis in the industry — without action, jobs will be lost, businesses will fold and the UK’s wider recovery will be at risk.”

The latest figures from ABTA suggest that some 200,000 jobs in the sector have been lost or are at risk of redundancy. With the school summer holidays usually being the busiest trading period for international travel — accounting for two thirds of annual income for many agencies and tour operators — the loss of this period combined with rising furlough contribution costs continues to put these jobs at risk. 

Clive Wratten, chief executive of the Business Travel Association, said: “Business travel is not expected to return at scale until at least 2022. We urge the government to produce tailored financial support for our industry to save jobs and retain talent so that safe and secure international travel can return.

“Without further support, we face a future where there are not the people in the sector to facilitate British businesses’ return to the international trading stage.”

Danny Callaghan, CEO of Latin American Travel Association (LATA), added: “Despite some good news for travel to the EU and USA, tourism to Latin America still looks to be some way off, so LATA members still have many months of difficulty ahead. Tourism to Latin America has increased in recent years, and the businesses that sell the region are successful, growing businesses that contribute to employment and economic growth in the UK. Like the whole tourism sector, they are just about hanging on, but the coming months, with the end of furlough, repayments on CBILS loans, and the effective end of business support, will be very challenging.”