COVID-19 Updates

Coronavirus update 9th April 2020

There is no escaping the news that travel, work and social restrictions have been placed on citizens across the world due to the global coronavirus pandemic. As well as the great loss of human life, every aspect of the economy, including the travel industry, has been affected by these unprecedented events. To keep you, our valued partner, updated, we have compiled an overview of the situation in the UK right now, including the effect on international travel, and our opinion on what will happen across the industry in the coming months.

 

The UK’s current status

Since 23rd March 2020, restrictions on personal movement have been placed on the UK’s public. These restrictions can be summarised as follows:

  • People must work from home where possible and should only leave the house for essentials such as food shopping, health reasons or daily exercise.
  • When out in public, people must always stay two metres away from each other.
  • People must wash their hands regularly with soap and water for at least 20 seconds and avoid touching their face.
  • Anyone with symptoms of coronavirus, or living with a person with symptoms, must self-isolate.
  • Those deemed as high risk (e.g. they have an underlying health condition) have been asked to self-isolate for at least 12 weeks.

As of 8th April 2020, there have been 60,773 confirmed cases of coronavirus in the UK and, sadly, 7,097 people have died as a result. Although these figures are high, and the UK government has warned that they will increase, there is also evidence to show that the above social distancing measures are beginning to work, and transmission rates of the disease are starting to slow.

 

The UK economy

With the UK population being asked to stay at home as much as possible, millions have been left unable to work and many companies have seen a sharp fall in profits. To prevent the coronavirus outbreak from devastating the UK economy, the government has introduced a number of measures.

  • Many small businesses are eligible for grants and loans to help them keep trading.
  • The government has introduced the Coronavirus Job Retention Scheme, allowing companies to furlough staff (stopping them from working temporarily) while the government pays 80% of their salary, up to £2,500 a month.
  • Financial support is also in place for the self-employed and those who are unable to work.
  • Individuals have found financial relief as banks have relaxed rules around loan repayments and mortgage lenders have offered a ‘mortgage holiday’ for those unable to make payments.

 

Impact on the travel industry

The UK Foreign and Commonwealth Office (FCO) has advised against all but essential international travel, meaning that no Briton will be able to go on holiday for the foreseeable future. This advice matches the guidance of many countries across the world.

With international travel inaccessible, this is proving an unprecedented and difficult time for the whole of the travel industry.

 

Legal obligations

Tour operators, travel agents and airlines are legally required to refund any customer who has had to cancel their trip due to FCO advice within 14 days of cancellation. This has put the UK travel industry at risk, and therefore the industry is taking steps to combat this.

  • Travel trade association ABTA has called on the government to temporarily change the law to allow up to four months to pay refunds. This would protect many travel companies who do not have the funds to make such large cancellation pay-outs at short notice.
  • Customers are legally entitled to a refund for any cancelled flights, but the industry is calling on the government to allow them to issue vouchers rather than refunds. The airline industry has asked for government backing and protection during these difficult times.

 

Finances and staffing

With a lot of money being paid out but very little money coming in, companies across the industry are having to make difficult decisions to protect themselves for the future.

  • Tour operators are mostly made up of sales staff, but few consumers are looking to book trips at the moment. As a result, many tour operators and travel agents are furloughing a large percentage of their work force, including many sales staff. The aim is that by temporarily reducing salary payments, the companies will be in a stronger position to continue operating in the future.
  • Airlines are also furloughing staff; most notably, British Airways recently announced that 36,000 members of staff would be furloughed.
  • As well as furloughing staff, many companies are cutting staff hours or cutting salaries.

 

Postpone, don’t cancel

Naturally, consumers who have spent large amounts of money on their travels are seeking refunds to protect their own finances. However, there is hope that many people will be keen to travel when able and will therefore postpone. For many, travel will be more appealing than ever after an enforced period of social distancing.

  • There have been major initiatives throughout the media encouraging people to continue to make travel plans for the future. The hashtag #PostponeDontCancel has been used widely across social media and this sentiment is being heavily promoted in both trade and consumer publications.
  • The UK travel industry has been using the hashtag #OneTravelIndustry to support each other; companies that usually act as competitors are working together to ensure the industry has a future.
  • Consumer travel publications and supplements are still regularly posting about travel plans with a view to looking forward to when we can travel again.
  • Travel companies and tourist boards are heavily promoting the idea of planning now to travel later – examples of successful campaigns include Peru’s #DreamThenTravel and Audley Travel’s daily #WindowWanderlust social media posts.
  • The government is allowing workers to carry over their annual leave days to 2021 and 2022, meaning that UK workers will have more time to travel, whether domestically or internationally, once the coronavirus outbreak has been controlled.

 

Our opinion

The last few weeks have provided an unprecedented and unimaginable challenge to the UK and worldwide travel industry. There is no denying that there will be plenty more challenges to face in revitalising the industry, and it is likely to be an unpredictable process. However, amongst the heartache that coronavirus has caused many, on both a personal and professional level, there is hope to be found.

It’s clearer than ever that companies want to support one another to ensure that the travel industry is not only surviving but thriving in the years to come. This isn’t just about hotels, tour operators or airlines; every part of the industry is working together and recognising the importance of protecting one another. Although companies may take a financial hit now, by dealing with the ongoing situation sensitively and responsibly, they will prove themselves to be reliable and will keep loyal customers.

In the UK, there are many furloughed workers. However, many of these will be able to return to work in time, and their companies will have maintained a steady financial position due to the reduction in salary costs. The government wants to keep as many people in work as possible and it is doing what it can to protect the travel and tourism industry.

UK residents spent £45.4 billion on overseas visits in 2018; international travel is a major business and one that will pick up again in time. With restriction on movement in place for a long period of time, it seems likely that holidaymakers will be keener than ever to travel internationally when they are able to. Of course, many will not be in the financial position to do so and some will be worried about the health consequences of travelling until a coronavirus vaccine is available. However, there’s every reason to believe that a large proportion of the population will already be looking ahead to their next holiday.

Airlines will want to operate as soon as restrictions are lifted: it is unfeasible to keep a fleet of planes grounded for months at a time, and governments across the world will be unable to offer financial security to all airlines. Of course, the obstacle here is that different countries will lift restrictions at different times. However, we believe that the coming months will see new innovations for slowing and controlling the virus; self-isolation measures may be working well in Europe, but it cannot be ignored that these measures will not be so effective in countries with high population density and large average household sizes. Therefore, it’s plausible that these countries may have to adapt and offer tourism to ‘controlled’ regions, albeit with strict screening measures and limits on where tourists can visit. The livelihood of millions of people relies on the tourism industry; we firmly believe that the return of international travel will become high priority for governments in the coming weeks and months.

It feels unlikely that daily life or the travel industry will be ‘back to normal’; a major global pandemic is likely to change people’s attitudes and, therefore, the way they travel. There has been much media focus on the drop in pollution around the world and how this is beneficial for preventing a global climate crisis. However, we are also fully aware that without tourism, many conservation and environmental protection measures will suffer. Therefore, it is important that we see tourism return this year in a move to actually protect the planet. Crisis has the ability to bring out the best in people, and we believe that people will continue to do their bit to help the planet on their future travels.

We are an industry that has survived a lot, from natural and man-made disasters to civil and international wars. With patience, resilience and the determination to adapt, we can get through the coronavirus crisis together and come out stronger on the other side.

Byron Shirto

Managing Director

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