Fresh travel curbs ‘could tip companies over the edge’

Stark warning from Abta as trade turnover falls to just 22% of pre-pandemic levels

Fresh travel curbs ‘could tip companies over the edge’

Travel businesses face a renewed struggle for survival as fresh travel restrictions are imposed are imposed from today (Tuesday).

The stark warning came from Abta, which revealed that many firms report turnover at just 22% of pre-pandemic levels and feel “abandoned” by the government.

The latest measures “could tip some companies over the edge”, forcing them to close their doors for good.

The re-introduction of Covid testing ahead of arrival back in the UK prompted the travel association to reiterate its plea to government to provide financial support for the trade.

New data from Abta highlights the “devastating impact” the Covid crisis has had on travel prior to the latest changes:

Employment across the travel industry has halved since the beginning of the pandemic in March 2020.The volume of new bookings taken across summer and autumn 2021 is reported to be at 28% on average compared to the same period in pre-pandmic 2019.Companies report their turnover for the financial year at just 22% of pre-pandemic turnover levels on average.

The latest changes come at a time when the industry is still reeling from the impact of travel curbs, which have seen two summer and winter seasons lost to the pandemic.

Smaller businesses may find it the most difficult to get through this latest setback.

The industry had started seeing the beginnings of a recovery in recent weeks following the relaxation of travel rules in October.

But the return of pre-departure tests and PCR tests on or before day two of arrival, means the industry is back to where it was in the summer.

Now a third winter season is under threat and once again there is weak consumer confidence in the run up to the peak booking period for next summer.

ABTA said it recognises that the government will take the measures it feels are necessary to protect public health.

But says that, in choosing to implement these measures, ministers have an obligation to bring forward measures of financial support for those worst affected.

Specific support for the travel industry has been “entirely absent” throughout the entire pandemic.

Abta argues that unlike other struggling sectors, such as hospitality and the arts, there has not been any dedicated funding for travel agents and tour operators – and many of these businesses have been rejected for general grant funding.

Half of travel businesses who applied for money from the Additional Restrictions Grants programme were denied and one in five travel companies have not received any grant funding at all since March 2020.

The government also needs to look at the cost of testing which has proved “prohibitively expensive” for many throughout the pandemic.

A price cap on PCR tests and the removal of VAT must be considered as market competition has failed to reduce prices.

Abta chief executive Mark Tanzer said: “Public health must come first but the government should be looking to soften the blow to travel companies by providing financial support in the shape of grants and the return of furlough for travel staff.

“Ministers have previously explained to us that the government’s approach is to enable the travel industry to trade their way out of this crisis, instead of providing support.

“However, it is clear they have now abandoned this approach. The transport secretary said himself last week that the re-introduction of pre-departure testing would kill off the travel industry, so the government should be coming forward urgently with a package of financial support for travel agents and tour operators.

“We can’t go on like this with requirements changing but nothing to support those businesses worst affected.

“It is the smallest companies that are suffering the most – with travel bosses having already taken every step possible to keep their businesses going – including drastically cutting staff levels.

“Not only has there been an absence of any specific support for the sector, but many companies have either been excluded or refused access to the general grant funding – so it’s no wonder that many of our members feel totally abandoned by the government.”

Theresa Villiers, MP for Chipping Barnet, asked in Parliament on Monday about support for the travel industry that has been “devastated” by Covid emergency.

Health secreatary Sajid Javid, who confirmed the Omicron variant is spreading in the community in multiple areas of England, said: “My right honourable friend is right to ask about the acute challenge the travel industry faces. I think the answer really lies in making a quick decision about Omicron.

“We’ll update the house when we have much more data next week. If the data is helpful we will ease restrictions on the sector and if it’s less helpful the government will review the measures.”