Clock ticking for UK tourism as businesses prepare to shed staff

Time is running out for tourism businesses as the looming end of the Job Retention Scheme and new rules on social gatherings heap further pressure on the industry.

Despite last week’s parliamentary debate on the tourism sector, industry leaders stressed it is financial support they need, not just words of encouragement.

The sentiments echo comments from Heathrow Airport Chief Executive John Holland-Kaye who warned that every day of prevarication is costing jobs and risking the viability of travel businesses.

UKInbound Chief Executive Joss Croft told TravelMole that companies which rely on international tourists are in particular danger.

A recent survey of UKInbound members found 88% of tour operators expect to axe between 25% and 100% of staff when the Job Retention Scheme ends next month. In addition, more than half fear they will be forced to close altogether within six months if no financial support is forthcoming.

While welcoming the Parliamentary debate on tourism, Croft said there was too much focus on domestic tourism.

"My real worry is that inbound is almost being forgotten as politicians see busy beaches and a functioning, albeit very hard hit outbound business," he said. "We have 140 tour operators and Destination Management Companies who have not been able to get any domestic business at all because they rely exclusively on inbound.

"We are likely to see wholesale redundancies as we move towards the end of October and the end of the Job Retention Scheme."

Even those able to attract domestic traffic are still operating at only 30% capacity, he said.

Despite the paralysis of the sector, Croft said some tourism business even missed out on a leisure and hospitality grant because their customers are based overseas.

"You could only access that grant if you had customers coming into your business premises," he explained. "And of course tour operators sell packages to other businesses overseas so they were exempt.

"It seems iniquitous to me that you have large portions of the UK economy which are able to trade and avail themselves of the Job Retention Scheme and yet you have tourism businesses that have had barriers in front of them, be that quarantine or the six-person gathering rule, and they are not receiving the support they should.

"Some operators are 98% down. We have to look for government support in the short term to keep these businesses going and then look for a wider support package in the longer term."

If support does not emerge, business will ‘fall over’, he said.

"We are working through what a resilience fund might look like for operators," Croft said. "If there was one call out [from the Parliamentary debate] it was that maybe a specific support package in whatever format for tourism needs to be looked at more closely."

Asked if an extension to the furlough scheme was realistic, Croft said: "I don’t think anyone in tourism cares what it is called, we just need financial support to save jobs."

The reduction in the size of social gatherings is also set to hit the industry, with bookings of larger groups thrown into confusion.

Hoseasons said it was contacting all affected customers, starting with those due to travel in the next three to four weeks, and offering a full cash refund, a voucher for future travel or the option to reduce their party size.

Meanwhile, Holiday Home Association Chief Executive Martin Sach said the ‘rule of six’ was ‘another big blow’ to the UK tourism industry and the holiday home sector in particular.

Plans are being ‘torn to sheds’, he said.

"Many holiday homes accommodate more than six and after the loss of all early-season business owners of larger properties now face more cancellation chaos and loss of business, to say nothing of the devastating disappointment that many families and groups will be feeling," Sach told TravelMole.

"We hope the government will exempt young children as well as the great outdoors from the rule of six, which would make a huge difference with minimal health implications."

But there was a degree of relief from Croft who said large groups arriving from overseas will still be able to travel even if they have to break into smaller groups when visiting attractions.

"It’s not good news by any means but there is an element of it could have been worse," he said. "It’s another barrier to travel which has already been massively impacted."

The Coach Tourism Association (CTA) said it was ‘heartening’ to see several MPs voice their support for a sector previously forgotten.

Chairman John Wales said: "Coaches are a critical part of the tourism industry. However coach tour operators, who are predominantly family-run businesses, have been left high and dry for the past six months and most of them missed out on government support because of the failure to recognise them as part of the leisure and travel sector.

"We would urge the government to consider extending a furlough scheme to tourism businesses which would be perfectly viable if they were able to operate without the current restrictions.

"Coach tour operators deliver huge amounts of tourists and leisure spending to regions across the UK and need continuing support to get through a challenging winter."