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‘If we’d known in March there’d still be uncertainty at the end of the year, more companies would have failed’
More travel companies would have failed if they’d known at the start of the pandemic there would still be so much uncertainty at the end of 2020, the latest Barclays State of the Nation webcast has heard.
Speakers Martin Alcock and Alistair Pritchard agreed that, although the number of failures is higher than usual, there have been fewer than expected. However, more are likely to go under once furlough and other government schemes have ended.
Alcock, Director of the Travel Trade Consultancy, said that,"The reason we haven’t seen more is partly grit and and resilience of the sector. Hats off to people for showing up every day on the front line. It has been brutal."
He said an early positive January ‘helped to get cash in the door’, RCNs ‘legitimised not paying it back again’ and Government support ‘definitely helped’.
But he said: "I often think if we had been having this conversation in March and said ‘Look, in November or December you are not really going to know that much more about when this ends,’ we might have seen more go."
He said the government’s drip-feeding effect of reviewing processes and introducing schemes has been ‘a carrot that has kept us all going’.
But he said: "I think we are in that territory now where everyone is so fatigued. All it would take is the straw that breaks the camel’s back and I do still feel we will see more failures because potentially bleak prospects from insurance, regulatory and bonding are all ramping up the pressure."
He also warned it would be difficult to value a travel business after the effects of Covid and, as a result, private investors may conclude they’d be better off investing in other sectors.
Earlier in the session, Pritchard, Travel and Aviation Lead Partner at Deloitte, said consumers would need travel agents more because of the uncertainties and complexities brought about by Covid.
"I think the consumer needs far more certainty and better understanding of the complexities that now add to the travel environment.
"It was already fairly complex in certain scenarios before Covid and Brexit. There will be more consumers who look for that advice and support along the journey, whether that’s just before travelling, or whilst they are abroad."
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.
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