Vacation companies can’t take a break as quarantines crush slight business recovery


TThroughout July, easyJet ran announcements stating that the mainland vacation destinations it relies on are “EurOpen”. Unfortunately for the airline and the travel industry in general, Her Majesty’s Government has other ideas.As of last week, the Foreign Ministry has advised against non-essential travel to Spain, amid emerging signs of a second wave of coronavirus infections. The measure was imposed so suddenly that even vacationing transportation secretary Grant Shapps managed to get caught.

Sunbathers on the Costa del Sol or culture seekers wandering the back streets of Barcelona have been told they should be quarantined for 14 days upon their return. Tour operators Tui and Jet2 canceled the holidays, the latter advising customers to shorten their trip or go home with someone else.

Spain isn’t the only vacation hotspot affected, either. The government has said that additional precautions could be extended to other countries at any time, meaning anyone who books a trip abroad should consider the possibility of it being canceled.

Last week, Tui also announced the closure of 166 of his stores, as he fights for his survival. Its once big competitor, Thomas Cook, succumbed to its debts even before the coronavirus struck, with its 555 travel agencies in the main streets bought out by the private company Hays Travel.

However, even in the uncertainty of the lockdown, husband-and-wife duo John and Irene Hays were cautiously optimistic in April that they could keep the majority of those stores alive and avoid cutting jobs. Accounts filed at Companies House on Friday show the company still made a profit of £ 3.4million, even after spending £ 7.4million on Thomas Cook.

Now, with Spain’s breaks suddenly taken off the table and the rest of Europe in jeopardy, the prognosis has deteriorated dramatically. “The events of the past weekend have changed the dynamics,” said John Hays. “We have 5,000 people working for us and all the options are back on the table. Layoffs would always be a last resort for us, but there is obviously a big cloud over things at the moment. ”

The main headache for tour operators is that the government has responded to regional increases in Spain by imposing general advice against travel throughout the country. This means that they cannot mitigate the effect by diverting travelers to destinations where infection rates remain low.

Activities in a Center Parcs seaside resort in the United Kingdom: the company claims to have seen “strong interest” from British holidaymakers. Photography: Jeff Gilbert / Rex Shutterstock

Tired sun worshipers are increasingly choosing to defer vacation decisions indefinitely rather than book for a later date. At the end of April, about 70% of Hays customers were postponing canceled vacations, and that rate has fallen to 40% since the government’s notice last week. New bookings were operating at around 50% of 2019 levels in April, but have now fallen to 24%. Unless something changes, it creates a bleak future.

“What the industry is asking for is a more sophisticated approach,” said John Hays. “Tenerife is further from Barcelona [the centre of a regional outbreak] than London. The industry says that where you have islands like this with lower infection rates than the UK, people should be allowed to fly there and spend their holidays.

Even before the travel restrictions were tightened, the situation was grim. Abta, the trade body for the travel industry, has a page on its website listing companies that have gone bankrupt recently, which is usually relatively rare. He lists seven since the end of May alone.

The pandemic cost the global travel industry nearly £ 250 billion between January and May, three times the industry’s total bill for the 2008 global financial crisis, figures from the World Organization have shown. United Nations tourism last week.

According to the analysis of Observer, nearly £ 25bn was wiped from the stock market value of travel-dependent companies whose shares are listed in London in 2020. The victims include airlines such as Ryanair and easyJet, hotel groups such as IHG and the Carnival tour operator.

British Airways owner IAG had previously said he would cut 12,000 jobs, and continued on Friday with plans to ask investors for £ 2.5bn in new funds, after suffering a record loss of £ 3.8bn sterling per semester.

Rival Virgin Atlantic required a £ 1.2bn injection organized by billionaire founder and owner Sir Richard Branson, who funded it from new investment and his own money after failing to secure the taxpayer money.

Aviation experts fear the worst is yet to come, especially after global air transport organization Iata responded to weaker-than-expected data last week by pushing back the scheduled date for the resumption of the air. industry from 2023 to 2024.

John Strickland, director of independent transport consultancy JLS Consulting, is quite disheartened about the short-term prospects for UK and Irish airlines as business passengers are unlikely to take over from tourism. “I don’t think the existential threat has arrived yet,” Strickland said. “Fall and winter are weaker times, and business travel expectations, which normally improve as the summer ends, are that they won’t come back much, if at all. .

“Companies have put in place travel bans for health security or cost reduction reasons, and we will likely see more use of video conferencing instead of travel. Of course, some businesses will have simply failed. ”

Governments across Europe have bailed out their major national airlines; Lufthansa even said the € 9 billion it got from Berlin was more than it really needed. British and Irish airlines have not been so lucky.

“We have some of the fittest airlines with good cash resources in the UK but all of them have to aggressively manage their cost bases, and in aviation the money is burning at a rate of millions. per day, ”Strickland said.

“So it creates a more difficult competitive environment if others are supported by governments. The government has not sufficiently recognized the value of the industry, not only as a direct employer, but also as an essential catalyst for tourism and as a catalyst for business and freight, as well as to support thousands of jobs in the supply chain.

A photo of the front of a large Saga cruise liner with a dark blue hull moored at a dock.

Saga continues to book reservations for its cruise line business. Photograph: Dan Kitwood / Getty Images

However, the pockets of the travel industry have a brave face. Cruise passengers are notoriously resilient people – their appetite for life on the open wave has been shown to be resistant to norovirus episodes, inclement weather and even large-scale disasters such as the Costa Concordia.

Saga Cruises still plans to take delivery of its newly built ship, the Spirit of Adventure, in the fall. The arrival of the ship was delayed by the effects of the pandemic on the German shipyard where it was built. But Saga is planning its first commercial trip in November and is already taking reservations – up to a capacity of 999 passengers – for the ship’s first season.

There may even be pandemic ‘winners’ – or at least those who lose the least – among companies offering UK vacations. Luxury lodge company Hoseasons broke its bookings record after the Prime Minister announced the lifting of lockdown restrictions.

Center Parcs, although it only operates with an occupancy rate of 65%, said it had generated “strong interest”, especially for this fall, while the caravan and camping group Haven saw a 70% increase in web traffic last week as more routes to Europe were closed from.


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