04 Feb

Coalition of travel organisations urge Chancellor to deliver tailored financial support in the Budget

Travel industry is a significant contributor to the UK economy and vital for the UK’s post-pandemic recovery

In a letter sent to the Chancellor today, organisations from every part of the UK outbound and inbound travel industry stressed the urgent need for Government to provide tailored financial support for the UK travel industry in next month’s Budget.

The Save Future Travel Coalition – which is made of up 12 travel organisations - argue that the need for support is becoming even more critical as businesses head towards 12 months of lost income, and deadlines for Government-backed loans and the end of furlough looming in April.

The travel industry has had little opportunity to operate or generate income over the last year, with coronavirus starting to affect travel as early as the end of January 2020 and a mounting number of restrictions preventing trade since then. Between March 2020 and January 2021, there was just a three-week period when people could travel to the whole of Spain, the UK’s favourite holiday destination.

Writing in the letter, the Coalitions says ‘As you prepare for the Budget, we urge the Government to consider the following priorities to Save Future Travel:

  • Expand the grant schemes available to support all travel businesses. Liquidity is the single biggest challenge facing travel businesses today, but existing grants schemes do not address the trading consequences of severe restrictions on international travel. With the vaccine rollout progressing well, companies need help to bridge the gap and survive through to recovery.
  • Extend other financial support mechanisms, such as furlough, VAT deferrals, business rates relief, loan re-payments, into the next financial year. It is particularly important that the furlough regime be extended in recognition that travel will likely restart gradually. To save jobs, salary support must be kept in place until recovery in the sector is gathering pace.
  • Enable travel businesses to trade their way out of the crisis in the coming months. The Government must work with the industry to put in a place a roadmap to recovery, which ensures stability for travellers and travel companies, and crucially, which uses existing mitigation measures to ensure travel can resume in a risk-controlled manner.

The Coalition says public health is the priority and understands the Government needs to take the steps it feels necessary to stop the spread of the virus and new variants entering the country, but that comments from senior Ministers about not booking summer holidays are misjudged - it is too early to make such predictions which only serve to further erode consumer confidence.

Since the start of the pandemic, as many as 1 in 6 travel jobs1 have been lost or put at risk and travel companies large and small have gone out of business. ONS data show travel has been the hardest hit sector – with revenue down 90% from February to October2. Yet, unlike other sectors such as hospitality, culture and the arts, the Government has not provided any tailored financial support to help the industry get through the crisis.

The group says that it is wrong to overlook the sector when a strong travel industry will be instrumental in the UK’s economic recovery – in normal times travel contributes £80 billion3 to the UK economy and generates in excess of £11.5 billion4 for the exchequer. It is also the travel agents, tour operators and business travel companies who put the passengers on the planes, ships, and trains, that sustain the UK’s regional and international connectivity – a crucial component to the UK’s recovery.

The group also point out that the UK is at risk of falling behind its international competitors, as countries such as France and Italy have already created specific grants support schemes for their travel industries. Meanwhile, there is also a growing level of disparity within the UK, as the Devolved Administrations make support available to travel companies that is not available to those based in England, for example, the Scottish Government and Northern Ireland Executive have announced plans for travel agent specific funding schemes. The Welsh Government is alone in enabling tour operators to access existing support.

The Save Future Travel Coalition - formed of ABTA – The Travel Association, Advantage Travel Partnership, AITO – The Specialist Travel Association, ANITA, ATAS, the BTA, CLIA, Keep Travel Alive, the SPAA, SBiT, the Travel Network Group and UKinbound – also says that the travel industry cannot wait for a full rollout of the vaccine before people start travelling again. Not only would another summer season lost to the pandemic be a seismic blow to the industry – it would also threaten the industry’s and UK’s recovery.

Mark Tanzer Chief Executive of ABTA – The Travel Association said:
“Government policies to curtail international travel have had a devasting impact on the industry. Despite its significance to the UK economy and its recovery, travel has become the forgotten sector, and businesses are running on empty due to a lack of tailored financial support from the UK Government. The Chancellor has an opportunity to address this in his Budget. Supporting the sector through this time of crisis will payoff for the taxpayer and the wider economy.”

Julia Lo Bue Said, CEO, Advantage Travel Partnership said:
“While the policy measures introduced, such as quarantine, travel corridors, testing, and localised restrictions on travel, are understandable from a public health perspective, they also diminish consumer confidence and damage trade. Yet, to date, these measures have not been combined with tailored financial support targeted at addressing the consequences of these policies for the businesses affected – as a result our members are under enormous pressure. We need Government to address this as a matter of urgency and work with the industry to develop a roadmap to reopen travel.”

Joss Croft, CEO, UKinbound said:
“Many businesses are stuck between a rock and a hard place – they can’t trade to generate income but they’re also shut out of support. Businesses in the travel sector, including destination management companies, coach operators, and tour operators, as well as many others, are entirely excluded from existing grants support packages. The UK Government needs to show they value the UK’s world-class travel and tourism industry.”

Clive Wratten, Chief Executive, The Business Travel Association said:
“The business travel community has been almost entirely forgotten. Alongside our colleagues in the leisure industry, we are asking the Chancellor to set out targeted support for our industry in his Budget. If we are to be a global Britain, business travel must commence at the earliest safe date and there needs to be an industry to support this vital economic contributor. Without targeted support, many businesses will rapidly collapse and thousands of jobs will be lost.”

The impact of the pandemic and government policies on travel:

  • Closed altogether. Since March 2020, the majority of destinations remained on the Government’s advice against non-essential travel list - closing down the operations of many travel providers. School trips have been banned and schools are being told not to book future trips, and ocean cruises are also not allowed to operate. In addition, the ski industry has been closed since early March 2020, and is facing the loss of another season.
  • Short window to travel in 2020. In July, the Foreign Office lifted its advice against travel to 63 destinations, but the ability to travel to many destinations was short lived, with destinations being placed back on the no-go list. For example, between March 2020 and January 2021, people could holiday to the whole of Spain for just a three-week period, rising to six weeks for France and Malta. ABTA Members reported that 9 in 10 summer holidays were cancelled.

Notes to editors
1 ABTA Member survey October 2020
2 Office for National Statistics
3 Office for National Statistics
4 Outbound to the exchequer £6.3bn, inbound contribution from VAT £5.5bn

The Save Future Travel Coalition was formed in the Summer of 2020 to focus on COVID recovery, and to provide a united voice on behalf of the UK’s vibrant travel industry.

Spokespeople from across the Coalition are available for interview including:

  • ABTA – the UK’s largest travel association
  • Advantage Travel Partnership – the UK’s largest independent travel agent group
  • AITO – specialist UK travel companies
  • CLIA - the world's largest cruise industry trade association
  • SBiT – representing seasonal British travel and service companies
  • SPAA – representing travel agents in Scotland
  • Keep Travel Alive campaign group
  • UK Inbound – the only trade association for the UK’s inbound tourism sector.