The trade has welcomed news of an extension to the government’s furlough scheme as a “huge benefit” to travel retailers.

Chancellor Rishi Sunak has announced the Coronavirus Job Retention Scheme will now be extended until the end of March 2021.

The scheme was recently extended until the end of November after a second England-wide lockdown was announced from November 5 until December 2.

World Travel Lounge managing director David McDonald said: “It’s brilliant news for us. It gives us the flexibility to ensure that we can survive as our biggest cost is payroll.

“If we can gain support from our local authorities then this would help keep all shops open for the long term but [the furlough extension] gives us the breathing space to allow travel to bounce back.  I think it’s a huge benefit to the retail travel sector.”

Derek Jones, chief execuive of Kuoni parent Der Touristik, said the extension was “certainly welcome news” which the firm “make use of in the best way we can.”

Miles Morgan Travel chairman Miles Morgan agreed: “It is of course welcome.”

But he cautioned that the government’s scheme still does not go far enough as it does not help travel businesses with the issue of having to keep staff employed and pay wages in order to process cancellations, refunds and rebookings while not making any money.

He added: “It does not address the issue that the travel industry has pretty much been closed down by the government. Unlike pubs we cannot furlough all our staff to save cost because of booking changes and refunds.”

Paul Waters, director, of Premier Travel, also warned that more help was needed for the travel industry to get back on its feet.

He said: “The announcement from the chancellor is positive providing the flexibility in the furlough scheme remains.

“While it was necessary for government to extend the furlough scheme giving additional support through the winter we still have other important needs, for travel to be ready to restart as soon as this lockdown ends: the lifting of the current non-essential travel ban, better flexibility with the travel corridor policy and having testing in place.

“With the forced closure of our branches this has meant more staff will be furloughed, however, we remain fully operational offering the same service as before as if our doors were open.”

Advantage Travel Partnership chief executive Julia Lo Bue-Said said the extension “will enable businesses to plan for the months ahead” but noted travel agents need staff working to manage cancellations and re-bookings due to ongoing travel restriction changes, quarantine measures and “yo-yo travel corridors” while receiving no income.

She added: “The travel industry desperately needs an exit strategy so it can start to rebuild confidence to encourage consumers and business travellers to start travelling again and provide travel agents and the broader industry the opportunity to generate revenue, at the moment the product that they sell – travel – has been taken away from them through a blanket travel ban.”

Lo Bue-Said reiterated calls for a “robust testing regime to be implemented at UK points of entry and a reduction in the quarantine period so that we can get people travelling safely once again”.

In a tweet, commercial manager Kieran Shew flagged the worrying impact of long term furlough on employees’ mental health.