More travel firms will go bust in the ‘coming weeks’ due to impact of Covid pandemic, industry bosses warn
- Abta chief executive accused the Government of failing to provide ‘basic tools’
- He said at least 20 companies with UK operations have collapsed since March
- Travel firms which have fallen into administration since Covid include STA Travel
More travel firms may go bust in the coming weeks due to the coronavirus pandemic, the head of an industry body has warned.
Abta chief executive Mark Tanzer accused the Government of failing to provide ‘basic tools’ to help consumer confidence as he expressed fears that the list of firms unable to survive will grow.
He said at least 20 travel companies with UK operations have collapsed since March.
‘The summer was pretty much a washout and winter is not looking great,’ he said.
‘As the furlough scheme comes to an end – unless there is a replacement for that – the pressure on companies is going to increase.
‘I am concerned that we may see some more failures over the coming weeks, which is tragic.’
Travel firms which have fallen into administration since the coronavirus outbreak include STA Travel, Specialist Leisure Group, which ran brands such as coach operator Shearings, and Cruise & Maritime Voyages.
Heathrow’s passenger numbers were down 81 per cent year-on-year in September, figures published by the airport show
Heartbreaking: Travel agent Kate Harris who has run her own award-winning business, Inspired Travel, for 20 years says the Covid crisis has seen her applying for jobs to stack shelves as bookings have dried up
It comes as it was revealed on Monday that passenger numbers at Heathrow were down 82 per cent last month, compared to the previous September, as the airport’s chief executive issued fresh calls for a new ‘test and release’ programme.
And last month, Leceistershire travel agent Kate Harris went viral after she broke down in tears during an interview with Travel Weekly about applying for jobs to stack supermarket shelves – as the business she’s built up over 20 years teeters on the brink of closing.
Speaking to Travel Weekly Editor-in-chief Lucy Huxley for a webcast about the way the travel industry has been devastated by the pandemic, the single mother-of-one fought back tears as she revealed how, even with the help of the furlough scheme, she’s only taken £120 in the last month, and still has to pay her one employee £500.
Heathrow said long-haul business travel continues to be restricted by international border closures and ‘a lack of testing’ for Covid-19. Pictured is the airport’s Terminal 5
Getting emotional, she told Huxley in the ‘heartbreaking’ interview that she already owed £10,000 and is behind on the company’s corporation tax and VAT bills.
She said she’d been left wondering whether all the sacrifices she’s made along the way, including years when she says she was a ‘drive-by mother’, to run her own business have been worth it.
John Holland-Kaye has urged ministers to roll out a system allowing travellers to leave quarantine after just five days, rather than the current two-week period, insisting such a move would kick-start the economy and help save millions of jobs.
Figures show just 1.2 million people travelled through the west London airport last month, compared with 6.8 million in September 2019.
The data also revealed that more than half of those passengers were flying to or from the European Union.
Heathrow said long-haul business travel continues to be restricted by international border closures and ‘a lack of testing’ for Covid-19.
And the lack of long-haul flights led to cargo volumes, normally carried in the hold of passenger planes, falling by 28.2 per cent compared to September last year.
Last week, the Government unveiled a task force to develop a coronavirus testing system as a potential way of easing quarantine restrictions for arriving passengers, but Mr Holland-Kaye today called for measures to be taken further.
He said: ‘The Government’s Global Travel Taskforce is a great step forward, but needs to act quickly to save the millions of UK jobs that rely on aviation.
‘Implementing ‘test and release’ after five days of quarantine would kick-start the economy.
‘But the Government could show real leadership by working with the US to develop a common international standard for pre-departure testing that would mean that only Covid-free passengers are allowed to travel from high-risk countries.’
Speaking in a webcast with Travel Weekly, she told Editor-in-chief Lucy Huxley, pictured top left, that she doesn’t know what she’d do if she lost her shop – and wonders whether all the sacrifices she’s made along the way are now worth it
Last week, it was revealed that Manchester, Stansted and East Midlands airports plan to axe 900 jobs as the fall out from coronavirus continues to batter the travel industry.
Manchester Airports Group (MAG) – which owns the hubs – said it is having to take action because there simply isn’t the demand for travel.
It added the lack of progress on testing had discouraged people from travelling because the prospect of a two-week quarantine was not practical.
Earlier this summer, Gatwick bosses admitted they fear demand for flying won’t return to pre-pandemic levels until 2025.
Passenger numbers at the West Sussex airport fell by two-thirds in the first half of the year compared with 2019, plummeting from 22.2 million to 7.5 million, it was announced at the end of August.
The industry was crippled earlier this year as non-essential travel was banned during the peak of the Covid crisis.
Surge in passengers for July but numbers down a tenth on last year
The number of passengers flying into UK airports surged to 1.3million people in July – compared to just 200,000 arriving in each month during April, May and June.
But the surge in arrivals last month is just a tenth of the number who flew into Britain during July last year.
Figures released by the Home Office earlier this summer made dim reading for the struggling aviation industry.
After Gatwick announced it was cutting up to 600 jobs, the passenger numbers show the number of arrivals compared to July 2019 is down by 89 per cent.
Around 11.1million people flew into the UK’s airports last July, compared to 1.3million arrivals this month.
Heathrow Airport was one of the hardest hit, just 867,000 people travelled through the West London airport in July, compared with 7.7million at the same time last year.
It had been hoped the summer holidays would provide a boost for the struggling industry, but quarantine measures have curbed holidays.
Gatwick Airport is operating at around 20 per cent of its capacity and has around 75 per cent of its staff on furlough.
Just 200,000 people flew into UK airports each month during April, May and June as thousands had to cancel holidays and remain at home in lockdown.
The opening of ‘air bridges’ to dozens of countries around the world in recent weeks then saw air traffic increase six-fold in July, though the 1.3 million arrivals represents just a tenth of the number who flew into Britain 12 months previously.
Abta commissioned a survey of 2,000 consumers which indicated only 15 per cent of people took a foreign holiday between February and July.
More than nine out of 10 respondents (93 per cent) were concerned about potential last-minute changes to travel advice issued by the Foreign, Commonwealth and Development Office.
Speaking at Abta’s annual convention, which was held remotely due to the pandemic, Mr Tanzer acknowledged that the Government faces ‘a difficult balancing act’ of trying to limit the spread of the virus while ‘keeping the economy moving’.
But he expressed frustration that more has not been done to help the travel industry.
‘We’re more than six months into this crisis now, and the basic tools that would help build customer confidence to travel are still missing,’ he claimed.
‘We must now move away from the blanket Foreign Office advice and have a regionalised, targeted approach to both Foreign Office advice and quarantine.’
He added: ‘The virus does not travel on a passport so adopting a whole country approach to health measures makes no sense at all.’
People arriving in the UK from overseas are required to self-isolate for 14 days, unless they have travelled from a location with a so-called travel corridor.
But most recently, weekly updates have left the list of exempt locations smaller.
A policy of treating islands separately from their mainland countries was launched last month.
Mr Tanzer said travel corridors ‘may exist in theory, but if you actually look at where we can go, there are very few places’.
Transport Secretary Grant Shapps insisted that the importance of the travel and tourism sectors is ‘appreciated and understood by everyone in Government’.
He told the convention: ‘It’s precisely because the travel industry is so important that we’ve supported it with unprecedented measures across the British economy.
‘The furlough scheme… paid up to 80 per cent of employees’ wages, with more than 55,000 staff benefiting within aviation alone.’
He went on: ‘We’ve been working flat out all summer to try to revive tourism and travel.
‘We created those travel corridors, to give families the chance to enjoy a holiday after those months of lockdown.
‘But from the very start, we’ve had to be cautious because as we know, new Covid spikes risk wider restrictions down the line and ultimately, even more pain for travel firms.’
How Covid has crushed 2020 travel plans – leaving many holiday companies facing a bleak winter…
By Jo Tweedy
The travel industry has faced plenty of adversity before 2020, with terrorism, economic downturns and the previous threat of pandemics – including the 2003 SARS outbreak – all impacting travel agents and tour operators in the past.
However, most would agree that the 2020 coronavirus pandemic is the biggest single blow ever dealt to the industry… with quarantine, a fear of the virus spreading on planes and in airports, and the promise of a second wave this winter already proving the death knell for some smaller operators.
In the UK, while the summer saw a chance for the staycation market to bounce back from the wiped-out Easter and May holidays, Boris Johnson’s rule of six – and the likelihood of even tougher restrictions coming soon – has ensured that many British hotels and self-catering properties are preparing for huge losses over the winter.
The travel industry faces its toughest ever winter, with the threat of a second wave likely to further deter people from booking holidays
For companies who rely on overseas operations, including airlines, the picture looks even bleaker, with countries on the ‘travel corridor’ list changing frequently, meaning there’s little certainty for holidaymakers who might ordinarily break for the sun.
This week, the general secretary of the TSSA trade union, Manuel Cortes, made an impassioned plea for the Government to do more to save the beleaguered holiday industry, with an upturn in fortunes now looking increasingly unlikely until at least Spring 2021.
He told this year’s Institute of Travel and Tourism virtual conference: ‘I am saying that no stone should be left unturned to support our industry. At the moment we are seeing nothing really [from government].
‘Whenever this virus is conquered we will all need a well-deserved holiday and sadly if the government doesn’t take measures to preserve our industry we will not have an industry.
‘In the short term, the industry cannot compete. What we need is the government to step in and hold the industry’s hand so we can emerge stronger than before.
‘It has done so in the past for the banking sector, why can’t it do the same for the travel trade?’
UK TRAVEL CORRIDORS: WHERE CAN YOU CURRENTLY HOLIDAY WITHOUT QUARANTINE?
Antigua and Barbuda
Bonaire, St Eustatius and Saba
British Indian Ocean Territory
British Virgin Islands
The Channel Islands
Greece (except the islands of Crete, Lesvos, Mykonos, Santorini, Serifos, Tinos and Zakynthos – if you arrive in England from any of these islands you will need to self-isolate)
The Isle of Man
Singapore (if you arrived in England from Singapore before 4am 19 September 2020 you will need to self-isolate)
St Kitts and Nevis
St Vincent and the Grenadines
Thailand (if you arrived in England from Thailand before 4am 19 September 2020 you will need to self-isolate)
Information correct on 30/9/20
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