The Job Support Scheme will not push back the “cliff edge” for travel companies having to make “tough decisions” on the future of their staff, according to chief executives.
Rishi Sunak’s new scheme, which will replace furlough from November 1, requires employers to keep staff in work for at least a third of their hours and contribute at least 55% of pay, with the government subsidising wages.
Leaders of tour operators and agency groups said the only way to save jobs was to get the travel industry up and running through airport Covid testing.
Asked if the chancellor’s Job Support Scheme, announced last week, would prevent mass redundancies, Giles Hawke, chief executive of Cosmos, said: “The cliff edge is still there at the end of October. This scheme doesn’t help travel businesses one iota.
Speaking on a Travel Weekly webcast, he said “more businesses” would survive if governments cooperated to provide global guidelines to get travel moving – because they could “see an end in sight”. “In the absence of that, and I can’t see that happening at the moment, this is an ever-extending window on when people might be able to holiday again,” he said, stressing that only “some certainty” would allow businesses to invest more in their survival and driving new business.
“If you knew that in January everything would be ‘normal’ you could start driving business,” he said. “But this could go on for another six or eight months. At what point are business owners or investors going to say ‘enough is enough?’”
He suggested the government come up with alternative support for businesses in travel, and other sectors stuck “between the devil and the deep blue sea”. “We are getting no support financially to keep us our businesses, which are viable in normal circumstances, going – but nor are we getting any certainty around what’s going to happen to enable travel in any medium to long-term window.”
Julia Lo Bue-Said, chief executive of the Advantage Travel Partnership explained the different part of the sector that she believes government doesn’t understand are separate.
“I’m not there is anyone in government who really listens to the travel industry,” she said. “We are not just travel, not just tourism, not just aviation, hospitality, events, we are everything. But we get put into this pot of tourism, and nobody wants that portfolio, so who represents us? What’s the best chance of being heard? What I’ve learned is that nobody has that ear of government so it’s all of our responsibility to make a lot of noise. It may not make a difference but frankly nothing is making a difference right now so we have to keep at it and cannot give up.”
Hawke agreed: “We are lots of disparate parts of the industry coming together as one but we have to keep making that noise. But unfortunately, at some point, we’re going to have to recognise that government has chosen not to listen and may continue not to listen. If that’s the case then we are going to have to think about what we’re going to do with our individual businesses, or collectively.
Hawke said the options for travel companies were either “give up, or say we’re going to have to find a way through this”.
He suggested thinking of creative ways to survive, such as agencies joining forces or tour operators creating new product for destinations people can go to, such as Cosmos’ new UK tours for UK customers.
“Unless Rishi Sunak changes this scheme in the next week or so, we are all going to have to make the tough decisions that we don’t want to make around people,” Hawke added. “We all have to, this week, lobby our MPs again and explain why this new scheme doesn’t work for our businesses. If everyone in travel, whether they be an employee, business owner, director or investor, wrote to their MPs to explain in detail the noise that would make would be significant – and reiterate the messages to say this is what will save travel and the sooner you do these things the less you will have to support this industry through financial means.
“The reality is, if travel companies have to lay people off, those people will end up being a cost to the state anyway.”
He said the government had to open up testing at airports, be “less broad brush” with quarantine restrictions and recognise that “we now have to manage and live with this” and “work globally” with other governments so people can “continue to travel and live their lives”.
He said a “return to normality” could “be accelerated” if governments cooperated rather than “something world-beating for the British”. “One in ten people globally are employed in the travel industry, that’s massive and everybody’s livelihoods are at risk which puts a massive burden on the state in every country.
Lo Bue-Said said: “As an industry we want to do our bit to aid the economic recovery. We don’t want hand outs, we want a sustainable future. But we don’t have the means to flick a switch and start operating, like other sectors – like hospitality – which have had to scale down, but can trade. We have nothing like that whatsoever, so testing is so important and has to be top of the agenda. We know that is the single biggest inhibitor of travel. If we can just put the protocols in place that will enable us all to start restarting and help economic recovery. At the minute we can’t play our part. We haven’t got the means to do it because the government won’t put the right protocols in place to help support our industry.”
Hawke noted “airports are saying they’re ready”, “what it needs is government to get on with it”. He added: “This inaction is really damaging UK GDP.
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