Travel sector heavily reliant on furlough scheme with new measures failing to provide support, finds research from RSM and ABTA

A new report from RSM and ABTA shows that 89 per cent of travel businesses made use of the Coronavirus Job Retention Scheme and 84 per cent expect to use it until the end of October. RSM surveyed 255 senior decision makers (predominantly ABTA members) from across the UK’s travel and tourism sector on the state of their industry in the context of Covid-19.

Ian Bell, Head of Travel and Tourism at RSM said: In 2019, outbound travel’s contribution to the UK economy totalled £37.1 billion supporting over 220,000 jobs. For a large sector that was all-but shut down during lockdown, it’s no surprise the industry has been one of the most reliant on the Chancellor’s furlough scheme. Particularly when ongoing challenges with quarantine and consumer confidence are taken into consideration.’  

‘The travel sector was missed off the agenda again on Friday when extra support for the leisure and hospitality sector was announced and strong feedback shows that the new Job Support Scheme (JSS) launching in November will not do the job. The upfront cost of the JSS will be too much to bear for many cash-strapped travel businesses. With the double-whammy of obligatory customer-refunds and significantly reduced bookings over the summer trading period, the extra money just isn’t there.’   

Encouragingly, 90 per cent of businesses did return to active operations by mid-September 2020, but 60 per cent don’t expect to return to pre-lockdown booking volumes and values until 2022. 

The next 12 months are crucial for the travel industry to find ways to maintain and flex operations before they get back to near pre-pandemic trading levels. Almost a third of business (31 per cent) plan to restructure current operations and over a quarter (26 per cent) said they are looking to access further finance. Getting the online experience right is also a priority, with a 25 per cent of business planning to invest in new technology.

Ian Bell continued: ‘Our report shows the travel sector views the pandemic as a short, sharp, shock, with booking levels anticipated to revert to pre-pandemic levels during 2022. To meet these challenges, over half of businesses will look to either access finance or restructure operations in the next 12 months, whilst around 40 per cent are considering a change to their operational footprint or are planning to relocate existing sites. Maintaining cash-flow will be the biggest challenge. Without further Government support or a step-change in airport testing which might offer a lifeline to the sector it desperately needs; the next few months will be really tough.’

A catalyst for change: new ways of working for the travel and tourism industry

ABTA travel and tourism

As the Job Retention Scheme ends, the burning question on every senior leader’s mind will be workforce, and what next?

Download the full report