Abta ramps up pressure for financial support amid ‘deepening crisis’

Abta has written an open letter to the chancellor and the transport secretary urging them to support the outbound travel sector by meeting the demands of last week’s Travel Day of Action.

The letter urges Rishi Sunak and Grant Shapps to provide tailored financial support to businesses and open up travel by adding more countries to the green list, and remove quarantine for those travelling to amber list countries who have been vaccinated before the end of July.

The letter was sent as travel businesses face increased furlough costs and business rates payments from July 1 and as government reviews the requirements for international travel.

On Thursday, some destinations were added to the green list, including the Balearic Islands in Spain, Malta, the Portuguese archipelago of Madeira and some Caribbean islands.

Shapps also confirmed the government will allow quarantine-free arrivals in the UK from amber list countries, but did not specify when this policy would come into place any more than ‘later in the summer’

Abta’s letter points out that this time of the year “would normally be the busiest trading period for most businesses in UK outbound travel,” adding: “Instead the industry is struggling with a deepening crisis.”

It explains that these “critical summer weeks” are “when most travel businesses make their money”, often around two thirds of annual income, which “carries those businesses through the rest of the year”.

“But not this year,” it says, noting “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.”

But Abta tells the ministers: “This devastation can still be avoided, if the government takes urgent action to support businesses through the crisis.”

The association pointed again to its demands made at last week’s Travel Day of action, when hundreds lobbied MPs at events in Westminster, Edinburgh and Belfast.

Abta’s demands

• To implement the traffic light system as it was intended
• Commit to providing a tailored package of financial support for travel companies, including the extension of furlough support and business rates relief at current levels

The letter adds: “The additions of some popular holiday destinations to the green or green watchlist 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.
It adds: “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.”

On financial support, the latter says: “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.”

Abta argues that “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”.

It says: “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 £7 billion 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.”