Package operators ‘could lose five billion pounds this year’
Package operators could lose £4.5-£5 billion this year, according to analysis by accountancy firm MHA MacIntyre Hudson.
The company says the travel industry will be ‘paralysed’ by new plans to enforce a 14-day quarantine on people coming into the UK, adding: " June usually most profitable time of year."
MHA Macintyre Hudson head of travel and tourism Rajeev Shaunak said confirmation of a 14-day quarantine plan for all arriving passengers into the UK strikes down any prospect of an early recovery for the travel or aviation industries.
Shaunak said: "Full details are expected this week, but it’s believed the quarantine for passengers in the UK will become effective at the end of May, usually the start of the busiest period for the UK travel industry.
"The Prime Minister also said nothing to suggest current FCO advice against all but essential travel throughout the world was likely to change any time soon. The message ‘Stay home’ has now become ‘Don’t leave the country’.
"For business and leisure travel, self-isolation for a period at least as long as a holiday itself, and in many cases twice as long, is a disaster. June is the period of the year when nearly all travel businesses aim to make sufficient profits to see them through the rest of the year.
"Forty-seven million foreign holidays are booked each year, roughly 50% protected by the statutory ATOL scheme, and the toll of this policy will be a long-term blow.
"The changes are likely to see a number of failures by operators unable to cope.
"The Air Travel Trust, the fund behind the ATOL scheme, has already been depleted badly by the collapse of Thomas Cook in 2019. Agents and operators need to prepare for a period of very little overseas travel and shore up their finances to find the best way to survive. The policy may be justified from a political and health perspective, but the consequences can’t be underestimated.
"The problems run into 2021. There are two years’ worth of demand building up. Many budding travellers, even before the notion of quarantine, didn’t expect holidays to depart before the start of the new school year in September, and delayed their plans as a result. We have already seen TUI increase the cost of holidays by around 20% next year; they say due to demand rather than price gouging.
"The summer holidays from June to September represent 70% of all overseas packages. The total value is around £7 billion a year, so package operators could lose somewhere between £4.5 and £5 billion worth of business for this year.
"At present 70-75% are rebooking rather than looking for a refund, but businesses that followed ABTA’s initial advice to issue Refund Credit Notes, dated 31 July for when they could be converted to cash, could be in major difficulties.
"The industry is of course not just dependent on the UK Government – many overseas governments have made it clear that UK residents are likely to be some of the last to be invited to return."
Lisa
Lisa joined Travel Weekly nearly 25 years ago as technology reporter and then sailed around the world for a couple of years as cruise correspondent, before becoming deputy editor. Now freelance, Lisa writes for various print and web publications, edits Corporate Traveller’s client magazine, Gateway, and works on the acclaimed Remembering Wildlife series of photography books, which raise awareness of nature’s most at-risk species and helps to fund their protection.
Vegas’s Billion-Dollar Secrets – What They Don’t Want Tourists to Know
Visit Florida’s New CEO Bryan Griffin Shares His Vision for State Tourism with Graham
Chicago’s Tourism Renaissance: Graham Interviews Kristin Reynolds of Choose Chicago
Graham Talks with Cassandra McCauley of MMGY NextFactor About the Latest Industry Research
Destination International’s Andreas Weissenborn: Research, Advocacy, and Destination Impact
Graham and Don Welsh Discuss the Success of Destinations International’s Annual Conference
Graham and CEO Andre Kiwitz on Ventura Travel’s UK Move and Recruitment for the Role
Brett Laiken and Graham Discuss Florida’s Tourism Momentum and Global Appeal
Graham and Elliot Ferguson on Positioning DC as a Cultural and Inclusive Global Destination
Graham Talks to Fraser Last About His England-to-Ireland Trek for Mental Health Awareness
Kathy Nelson Tells Graham About the Honour of Hosting the World Cup and Kansas City’s Future
Graham McKenzie on Sir Richie Richardson’s Dual Passion for Golf and His Homeland, Antigua
ADS PRO 
TAP Air Portugal to operate 29 flights due to strike on December 11
Qatar Airways offers flexible payment options for European travellers
Airlines suspend Madagascar services following unrest and army revolt
Strike action set to cause travel chaos at Brussels airports
Digital Travel Reporter of the Mirror totally seduced by HotelPlanner AI Travel Agent