Travel industry set for long-haul recovery
by Ian Curran
After more than a year of lockdown measures, you might expect to see a wave of sandal-wearing, lilo-carrying holiday makers dashing for the nearest airport. However, despite the initial traffic of travellers revving their engines at the first sign of a governmental green light, it is likely to take some time for the industry to fully recover in a post-pandemic world.
The government restrictions imposed due to COVID-19 have had a devastating impact on the travel industry. According to the Office for National Statistics, air passenger arrivals in the UK fell by 98.3% between February and April 2020. The Eurotunnel also reported a decrease of 91.3% during the first national lockdown compared with its April 2019 figures. Thousands of pilots, cabin crew, airport workers and travel agents have been made redundant. Travel companies are having to rely on Business Interruption Claims to survive.
Devon, a member of cabin crew at one of the UK’s largest international airlines, has managed to find alternative work in a private hospital; “In October I was put on furlough and have not flown since due to the American borders being closed and the flying schedule being so low.” She states “unfortunately, thousands of my colleagues have left the industry due to the pandemic, some out of choice and some through redundancy. This has been a heart-breaking time.” With many workers being forced to leave the industry all together, it will take some time to re-build a pre-COVID workforce.
Widespread redundancy is not just a problem within the industry, it is a major problem for the industry. With so many people out of work, holidays and trips abroad become financially unviable. Whilst Boris and Rishi boast the success of their furlough scheme, there remains a huge proportion of the population with uncertain finances and less disposable income. With the furlough scheme coming to an end in the Autumn, many people will be cautious about booking flights and holidays. With the added expense of PCR testing, the increasing cost of travel insurance and the significant amount needed to effectively quarantine, international travel has become unaffordable for many Brits.
Conservatives crash confidence
In addition to affordability issues, public confidence in the travel industry has been shaken. The government’s knee jerk reactions throughout the pandemic caused widespread disruption. Head of Operations at Designer Travel, Nicola Mead, said the biggest challenge during the pandemic has been “keeping up with the government changes regarding travel restrictions.” According to Mead, customer confidence was notably “dinted” by the lack of foresight from the Johnson administration. “Countries being taken off the travel corridor with just a few days’ notice not only impacted existing bookings, but also those customers who were already in resort and would suddenly have to quarantine on their return.”
The fear of last-minute changes is now deeply rooted within the consumer psyche. Even with the new traffic light system, there is set to be a review every three weeks which will inevitably see countries changing categories. 50% of Designer Travel clients have cancelled their holidays for fear of the unknown. Understandably, people are holding off holidaying until there is less uncertainty and more options available to them. Nicola Mead reveals customers are now looking further ahead. “Tour operators have launched their 2023 products much earlier, with lower deposits and more flexible terms than normal to try and get a piece of the advanced season market.” With a focus on future bookings, the travel industry is set for a slow return to its former glory.
Vaccines vs. Variants
The vaccination programme has been heralded as the answer to all our problems. Those immunised have the power to kick start the travel industry by jetting off to greenlit destinations. However, there has been considerable backlash against vaccine passports and certificates of testing. With human rights activists and anti-vaxxers refusing to have the jab or be tested, added to those unable to have the vaccine for medical reasons, the number of people able to venture abroad could be greatly reduced.
Cruise ships have been widely criticised as hotbeds for disease. At the start of the pandemic, ships were refused access to ports and left stranded in the ocean. Passengers were confined to their cabins. Travel has become associated with transmission. The idea of waiting in crowded airports, flying in air-recycled planes or setting sail on a multi-cultural world cruise may no longer float everyone’s boat.
Even those vaccinated will have concerns about international travel. With COVID-19 being a relatively new virus, it is unclear how long the vaccines last and how effective they will be against new variants. The ‘Indian Variant’ is the latest in a string of mutations threatening to extend restrictions in the UK. With the threat still prominent, some potential holiday makers will dismiss international travel to avoid any more lockdowns.
Over the past year, the press have been quick to report on any form of positivity. A recurring theme has been the environmental benefits of lockdown measures. A captive and captivated television audience has watched pristine Venetian waterways welcoming back dolphins, severe smog in New Delhi dissipating to reveal the distant Himalayas, wild deer roaming Japanese cities and gregarious goats reclaiming the streets of Llandudno. The world seems better without us. More natural. Clean.
Trapped indoors, we have been forced to acknowledge our impact on the outside world. Many people will emerge from lockdown with a greater awareness and a heightened sense of environmental consciousness. This is sure to have an impact on the industry. Travelling less reduces our carbon footprint. There are even apps calculating our personal impact on the world and discouraging us from air travel. People striving to make a difference will seek to limit their journeys where possible. Great news for the planet, bad news for the travel industry.
Runway to recovery
Those embarking on Research and Development initiatives to develop environmentally friendly transport, accommodation or technology can apply for R&D tax relief. Areande is helping travel companies claim back money for their innovations. Areande also helps UK businesses interrupted by COVID-19, taking on new cases and challenging insurers that have previously denied pay-outs.
With customer confidence at an all-time low, nation-wide redundancies, affordability issues, a profound fear of travel-related transmission and an increased environmental consciousness, a full recovery for the travel industry will not be plane sailing. Travel companies need continued support.
To find out what help is available for you and your business, contact Areande for a free consultation.