Travel sector job losses ramp up as holiday row continues
The Travel Association, ABTA, estimates that 195,000 people working in the UK travel industry have either lost their job or are at risk of losing their job due to the Covid-19 crisis.
ABTA is reiterating its calls for the UK government to provide tailored financial support to struggling businesses, and to safely restart travel so that businesses can generate income this summer.
The travel sector employs more than 526,000 people across the UK in ordinary times, meaning that the livelihoods of more than a third (37%) of people in the industry face being wiped out.
It’s not just jobs that are bearing the brunt, businesses are on the brink of financial failure. More than half (57%) of SME travel agents said they would not have the cash to survive more than three months based on current trading conditions and available government support.
ABTA says the findings show the immense pressure the travel industry is under after almost 18 months of severe restrictions which have curtailed the sector’s ability to trade. It is urging the government to deliver a package of tailored financial support to see the industry through to recovery. It says support should include extending existing furlough and self-employed income support, extending full business rates relief and creating a new sector-specific ‘recovery grants’ regime for travel agents, tour operators and travel management companies.
The association says it is particularly critical that support is extended given that employer furlough contributions are due to rise at the end of the month and business rates relief will be tapered. With international travel still largely restricted, travel businesses will not have the money to cover these costs.
ABTA says the traffic light system, launched last month has been a false start, which has further dented consumer confidence at a critical time. The next green-amber-red list review is due on 28 June.
Ryanair and the Manchester Airport Group launched legal action against the government this week over the system, and have called for transparency about how decisions regarding green, amber, and red countries are made.
ABTA said the system is not operating as intended, with overseas travel barely open. As a result, the travel industry is on the precipice of losing a second peak summer season – crucial months which represents two-thirds of travel companies’ income.
Mark Tanzer, ABTA chief executive, said: “Travel businesses feel completely abandoned by the government, which has consistently failed to provide adequate support for an industry which has borne the brunt of the economic fallout from the pandemic.
“People have worked tirelessly through the pandemic trying to stay afloat, taking on extra jobs, having to make long-standing, valued staff redundant, worrying about mounting debts. While we can clearly see the financial toll with jobs and businesses lost, the emotional toll of this ongoing battle, which still has no discernible end in sight, cannot be underestimated.
“Unless the government’s strategic review of international travel on 28 June brings forth a sensible plan for travel to reopen for the summer and targeted support that recognises the catastrophic economic hit that the sector has taken, the industry will truly begin to buckle before the summer is over.”