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ARG funding ‘will not go far enough’ to support travel firms

The travel industry has hit out at government for its exclusion of the sector in its £1 billion support package for businesses announced today.

Chancellor Rishi Sunak confirmed the cash grants of up to £6,000 for hospitality and leisure companies impacted by the measures introduced to slow the spread of the Omicron variant.

Travel firms are ineligible for that support but can apply for support from the Additional Restrictions Grant (ARG) fund, dished out by local councils, which has received a boost of £100 million as part of the announcement.

But industry leaders were left frustrated at the outcome and called for the government to “correct this oversight” by adding travel companies to the list of eligible firms for the £1 billion.

Luke Petherbridge, Abta’s director of public affairs, said: “The chancellor’s statement today once again ignores the direct impact of government policy decisions on businesses reliant on international travel.

“Travel agents, tour operators and travel management companies will rightly be asking why they haven’t been given the same treatment as other businesses that are suffering at this time.

“Average annual revenue across the travel industry is down by nearly 80% on pre-crisis levels even before Omicron emerged, and the re-introduction of enhanced testing – both pre and post arrival – have added significant costs and notably dampened consumer demand.

“As the sector approaches what should be the peak sales period for booking holidays for summer 2022, businesses are instead facing another round of heart-breaking and demoralising cancellations, with no indication that the government is listening to the challenges they are facing.

“While extra funding has been allocated to the Additional Restrictions Grants scheme, this will not go far enough to support a sector that has endured 21 months of restrictions. What’s more, travel businesses will have to compete with companies in other industry sectors to get some of this cash. It simply isn’t good enough for the government to continue to ignore an industry that, prior to Covid-19, supported over 500,000 jobs and generated more than £37 billion for the UK economy.

“We urgently need ministers to engage with us to find solutions to keep businesses afloat and save jobs”.

Petherbridge called for:

  • The immediate lifting of unnecessary travel restrictions
  • Tailored winter resilience grants for the travel sector, similar to those announced today for hospitality
  • Help for businesses facing loan repayments at a time when they have no income
  • The extension of rates relief for all travel businesses in financial year 2022-23

He added: “The government must also urgently consider the case for furlough and other income support, especially if travel restrictions are going to be maintained for any significant period.”

Julia Lo Bue-Said, chief executive of the Advantage Travel Partnership said the consortium had requested “detailed guidance” from the Department for Digital, Culture, Media and Sport, “to understand the definition of ‘leisure’ businesses, as retail travel agents were included in previous grants”.

However, she pointed out that, even if retail agents are entitled to the grants, 50% of Advantage’s non-retail members are unlikely to qualify for grants despite seeing an 80% drop in revenue.

“In addition, travel companies will have to fight tooth and nail against other businesses to qualify for the Additional Restrictions Grants that the chancellor has announced, but come at the discretion of local authorities,” said Lo Bue-Said, who last week wrote to the chancellor urging him to provide financial support to the travel trade, and to recognise that they have been locked down, unable to fully trade.

“Yet again it looks as though our members are at the back of the queue,” she said.

Gary Lewis, chief executive of The Travel Network Group, asked: “What about the travel industry?”

“We are a sector that’s been hit harder and for longer and with no industry-specific support,” said Lewis. “We’ve given back our profits refunding consumers whilst demand for travel has fallen off a cliff.

“Consumers have little or no confidence in what’s around the corner restrictions-wise and the fear and cost around return-home Covid testing has shattered public confidence in travelling abroad – we’re sending a plea to the Chancellor: help save travel.”

Sutton Travel expressed its frustration at travel’s exclusion from the cash grants relief on Twitter, saying the sector is “the forgotten industry”.

Richard Slater, owner of Henbury Travel and north west chair of Abta, said the travel industry “once again feel let down” and in a letter to his local MP, David Rutley, said the government’s support package “ignores the direct impact of government policy decisions on businesses reliant on international travel”.

Clive Wratten, chief executive of the Business Travel Association, said travel’s omittance from the support measures was “devastating”

“It’s imperative that the arts, hospitality and leisure are given help through the latest wave of the pandemic,” he accepted, but stressed: “A vital part of the UK economy [travel] and the driver behind global Britain is being left in the cold.

“We urgently need the Treasury to correct this oversight and support our industry into 2022. This is the only way for there to be a safe return to international travel when conditions allow.”

Manuel Cortes, general secretary of the TSSA union, said: “Our travel trade, and now our hospitality sector, are being badly hit by restrictions and government advice that people should reduce their social contacts.

“What we needed to hear from Sunak was that the government would be reintroducing the furlough scheme for workers within all areas of our economy which Omicron is badly hurting.

“Instead of giving millions a Christmas cheer Sunak has re-emerged from the California sunshine as Scrooge.”

UKinbound chief executive Joss Croft said the £1 billion package will “undoubtedly help domestic tourism businesses” which is “obviously good news”.

But he said: “It is astounding that hospitality businesses, which can trade, will receive sector specific support, but the UK’s tourism supply chain, such as inbound UK tour and coach operators, are being left to wither and die.”

Pointing out VisitBritain’s report of a combined £47 billion inbound tourism spending loss for 2020 and 2021, Croft said today’s announcement “rubs further salt into the wounds”.

He added: “The government’s own arrival testing and quarantine restrictions has seen inbound business virtually wiped out for 22 months. The sector has had no targeted support, which will leave many businesses involved in the UK’s fifth largest export sector, inbound tourism, left wondering just how little the government cares or understands.”


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