The disastrous impact of Covid-19 on the travel industry

No one industry is immune to the significant impact of the Covid-19 outbreak. Some are seeing a huge increase in demand for their products or services whilst others have seen sales drop off a cliff and even negative bookings (where more customers cancel their orders and bookings than make them).

Supermarkets have seen massive increases in sales – over 20% in some cases according to analysts Kantar, which has been great for the creation of jobs, helping to offset some of the losses in other areas. During the month of March, people spent more in supermarkets than they do at Christmas. But whilst great for the supermarket, we saw some awful behaviour of panic buying with shelves stripped bare. The emotional plea from nurse Dawn Bilbrough from York who couldn’t get any fresh fruit or veg after a hard shift treating patients really hit home and it feels like people have calmed down and reassessed their behaviour since then.

woman in face mask shopping in supermarket
Photo by Anna Shvets on Pexels.com

Whilst supermarkets are raking it in, we shouldn’t overlook their staff being in a dangerous position, dealing with the public on a daily basis, putting their own lives at risk to keep the wheels of our economy turning, keeping us all fed. Going to the supermarket is a bizarre experience but I thank them for being open.

I wish I could say the same for the travel industry, which has been shutdown across the globe, risking millions of jobs right the way through the supply chain. Flights are grounded, hotels are closed, tour operators are having to cancel holidays left right and centre. In nearly 20 years of working in the travel industry, I’ve never experienced anything like the past few months.

empty chairs at the airport
Photo by Shainee Fernando on Pexels.com

It’s great that we’ve seen a moderation of behaviour in the supermarkets, but that moderation hasn’t yet reached the travel industry, as customers rush to cancel their plans and ask for refunds.

The Package Travel Regulations stipulate that customers should get a cash refund for a holiday cancelled by their tour operator within 14 days of the cancellation. This is a great consumer protection, no doubt about that, but it really wasn’t designed or written to account for a complete shutdown of the travel industry all around the world. The PTR are killing our industry. 

What’s worse, whilst tour operators are mandated to refund in cash, the same rule is not applied to their suppliers – they’re allowed to refund in credit vouchers. Some suppliers are making the vouchers traveller specific, making them near impossible to redeem unless that traveller books with the tour operator again. Airlines in particular are only refunding in vouchers and flights are often one of the biggest costs of a trip. Airlines are only obliged to refund in cash if they cancel the flight, and even then they’re trying to issue vouchers to protect cash flow.

Tour operators are being vilified in the media by asking customers to transfer their holidays to later dates or take a refund credit note instead of a cash refund for their cancelled holiday. The latest ABTA guidance encourages customers to take a credit note refund wherever possible. It’s important to recognise that ABTA are financially protecting those credit notes until the 31 July so if you take one and the tour operator goes bust before then, you’ll get your cash back. And if they don’t go bust, you’ll get to go on the holiday that you were so looking forward to. The ironic thing is, by demanding cash now, business are being pushed every closer to administration.

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The World Travel and Tourism Council has warned that up to 50 million jobs could be lost around the world because of Covid-19, with countries much, much poorer than our own suffering the worst. Your one or two little holidays a year might seem insignificant but they contribute to a massive industry that generates up to 10% of global GDP. Never before has it been more important to think about how our individual actions impact our local and global communities.

There was a lot of bad press about excessive exec pay and mismanagement of Thomas Cook after it collapsed at the end of 2019. But this industry isn’t run by a few massive organisations paying their execs hundreds of thousands of pounds a a year in salary and bonuses. Instead, it’s made up of hundreds of small, independent businesses employing anything from a handful to a few hundred people. These are the businesses that need the most support. All businesses should have good cash reserves for a rainy day, but no one could have foresaw the deluge we’re seeing now.

I’m glad that ABTA has spoken out to encourage customers to take a refund credit note or move the date of their holidays and I’m glad that they’re lobbying government to relax the legislation around the Package Travel Regulations to give tour operators some time to process what has happened to our industry. These changes really can’t come quickly enough.

I appreciate that not everyone is able to postpone their holidays or take a refund credit note. This crisis has already cost jobs, people are on short-time hours or furlough. But if you can postpone or take a credit note, do it! My own travel plans are on hold, we’re all in the same boat, but if I have to push the dates of my trips back a few months or defer to next year, then that’s what I’ll do.

If there’s one thing I know about us Brits, it’s that we love our holidays and that as soon as the skies and borders reopen, we’ll be queuing to board flights like never before. So, please, if you’ve got a holiday booked that can’t go ahead, and especially if it’s booked through an independent tour operator or travel agent, please consider taking the credit note or simply amend the date on your booking. By not doing so now could have a catastrophic impact on the travel industry and there might not be any airlines, hotels or tour operators left to provide our much loved holidays. Or worse, just a handful will remain, restricting choice of where to go, when to go and prices will rocket from the lack of competition.

Just like we’re all staying at home to protect the NHS and save lives, postpone don’t cancel your holiday. Protect jobs in the travel industry, not just in your community but in communities around the world.

 

 

To finish, I did just want to say how incredibly grateful I am for our NHS and the fantastic work of all key workers. My younger bother is working on the front line in intensive care and I couldn’t be any more proud of him. Stay safe everyone, especially you, Luke.

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