April 24, 2024

Last-ditch cry for help

With furlough and business rate contributions set to rise from July - and international travel still severely restricted - ABTA has sent an open letter to the Chancellor and Secretary of State asking for support to save the sector. Here's what the letter says...

Dear Chancellor, Dear Secretary of State,

We are writing during what would normally be the busiest trading period for most businesses in UK outbound travel. Instead the industry is struggling with a deepening crisis.

It is this time of year when most travel businesses make their money. The critical summer weeks account for around two thirds of annual income for many travel agencies and tour operators – vital revenue that carries those businesses through the rest of the year. But not this year. We’ve already lost a sizeable part of the season and ongoing restrictions on travel, combined with the pending rise in furlough and business rates payments, mean that many travel businesses, particularly small to medium-sized companies, are teetering on the edge of a financial cliff.

This devastation can still be avoided, if the Government takes urgent action to support businesses through the crisis, and there are two things we are asking your respective departments to address immediately:

Firstly, more than anything, travel companies want to be able to trade their way out of this crisis. It is the Government’s own restrictions and measures that are preventing businesses sending customers overseas. While we accept that that public health is the Government’s overriding priority, we believe the traffic light system and the UK’s high level of vaccination set the right framework to allow for increased foreign travel now, in a safe and risk-managed way.

The additions of some popular holiday destinations to the Green or Green watch lists this week, while welcome, does not come anywhere near the restart of travel needed to save jobs and businesses and kickstart our recovery. More countries need to be added to the Green list, and the Government also needs to look urgently at relaxing the rules around quarantine for Amber list countries for fully vaccinated travellers.

Ministers have been rightly proud of the success of the UK’s vaccine rollout. Yet, as other countries, many with still lower rates of vaccination than us, begin to reopen their borders and enable their citizens to travel again, it is time to capitalise fully on the success of our own vaccination programme.

We are encouraged that the Government has confirmed an intention to relax rules for fully vaccinated people visiting Amber destinations, and to remove advice against travelling to these places. However, these changes must be implemented quickly – before the end of July – if they are to make a meaningful difference. A vague promise to do so “later in the summer” will not be enough to save jobs and businesses in the travel industry.

Secondly, we urge the Chancellor to commit to providing a tailored package of financial support for travel companies, including extension of furlough support and business rates relief at current levels, which are currently due to rise this week (July 1), along with a dedicated grant scheme to help them get through the very difficult weeks and months ahead.

While paying 10% of furlough contributions and a third of business rates may well be affordable for those businesses who have been able to trade during the pandemic and re-open since lockdown lifted, it is a terrifying prospect for many of our members. Without the opportunity to earn income since the beginning of the crisis, and with travel still severely restricted, these costs will be crippling for businesses in the outbound travel industry.

The gradual removal of support across the wider economy is based on parallel giving back of freedoms, and lifting of restrictions, which will enable businesses to trade again successfully. The Prime Minister, and many other Cabinet Ministers, have publicly acknowledged that this process will not be followed for international travel for many months to come. Yet we hear nothing from the Government in terms of a plan for ongoing support, only the repeated message that the aviation industry has received £7billion in support. This support, as you say yourselves, was given to the aviation industry, not to travel agents or tour operators.

We are regularly hearing from travel agents and tour operators who have spent decades building up a profitable and viable business, only to see their life’s work wiped out, leaving them with heart-breaking, but unavoidable, decisions to cut staff. Our latest analysis shows that the industry has seen 195,000 jobs already lost or put at risk. This figure will increase notably in the coming weeks in the absence of Government action.

This summer season is the most important ever for the outbound travel industry. We are asking you to act now to save jobs and businesses and to set the industry on the road to recovery.

Yours sincerely

Alistair Rowland, Chair of ABTA and Group CEO, Blue Bay Travel and Mark Tanzer, Chief Executive, ABTA