Urgent clarification needed on Government support for businesses, says AITO

AITO is calling for urgent clarification on the Government’s post-Budget coronavirus first-aid package for businesses.

Whilst welcoming the Chancellor Rishi Sunak’s initiatives to help small and medium-sized businesses maintain their cashflow during the crisis, AITO said it needed more details regarding how these work work in practice.

In particular, it called for clarification on the proposed system to give tour operators a breathing space to operators who must refund clients for cancelled holidays without any new incoming business and before they have received refunds from airlines and hotels.

It said the process needs to be made more manageable for tour operators without wiping out their liquidity and making it impossible to function.

Secondly, it is waiting for more details on the Coronavirus Business Interruption Scheme to be able to ascertain its potential usefulness to tour operators.  Under the scheme, Sunak is proposing businesses are given government-backed loans with six months’ free interest, but AITO said: "It is not clear how interest payments will be handled after the first six months, or whether such loans can be applied for later in the year.  

"It would be pointless for tour operators to take out a loan today, for example, when they would find it extremely difficult to commence loan repayments due to lack of new holiday bookings whilst the vast majority of destinations worldwide are off-limits to travellers due to Government edicts.  

"The duration of the loan is another vital aspect – will businesses have, for example, options of 10 year, 15 year or 20 year loans? – as is, of course, the as-yet-unknown interest rate."

Finally, AITO wants the Government to clarify whether outbound tour operators qualify for new initiatives announced specifically for retail/hospitality and leisure businesses, including  the 100% rate holidays and £25,000 grant for those working from premises with a rateable value of £15,000 to £51,000.

"AITO members (operators and travel agents alike) certainly see themselves as part of the hospitality and leisure sector, under the remit of travel and tourism, but it is not clear whether outbound SME tour operators – who are very much in need of such help – are included in the Government’s interpretation of what a retail, hospitality or leisure business looks like," it said.

"AITO members anxiously await this important clarification.  We would also like to see the maximum rateable value for businesses increased considerably.   While regionally-based businesses may be covered by the £51,000 cap, few of those based in metropolitan areas will be eligible."