Travel and tourism industries in desperate plea for government support
Tourism businesses are set to make large scale redundancies unless the Government provides more financial support for the sector.
The warning comes at the same time as a call from airport operators for urgent business rates relief following the collapse in passenger numbers due to pandemic lockdowns.
Tourism trade association UKinbound conducted a survey of members and found that 88% of tour operators and destination management companies (DMCs), who are responsible for bringing in and looking after more than 50% of all international visitors to the UK, and in excess of 70% of visitors from the USA and China, are set to make large scale redundancies as a result of the COVID-19 crisis.
It warned that without further Government support:
- 60% of DMCs will be forced to make further redundancies in August when the Coronavirus Job Retention Scheme tapers off
- 88% expect to make between 25% and 100% of their staff redundant
- More than half (53%) expect their business to last no more than six months
- The number of businesses expected to turn over more than £500,000 from international visitors will fall to just 34% in 2020, compared with 71% in 2019
- The number of businesses expected to turn over more than £5m from international visitors in 2020 will fall to just two per cent, from 27%, in 2019
The survey results highlight the broader impacts of COVID-19 on the UK’s tourism sector which contributed £145.9bn to GDP in 2019 – international visitors contributed £28.4bn – and is responsible for 3.3 million jobs.
Joss Croft, UKinbound chief executive, said: “The Chancellor’s latest economic recovery plans clearly recognise the value of hospitality and tourism to the UK economy which is very positive, however, the measures that have been announced will, unfortunately, not help the many businesses that are involved in inbound tourism.
“Our survey results, unsurprisingly, reinforce that those tourism businesses that rely wholly on international visitors for their livelihoods are on their knees and that the risk of widespread redundancies and the collapse of previously successful businesses is a very real threat without further government support.
“Before the pandemic the UK was the seventh most visited country in the world, but generally there is a low awareness in this country of how much international visitors contribute to our national and regional economies.
“Similarly, there is generally a low awareness among international travellers of what to do in the UK outside London, and it is the tour operators who generate a large proportion of visitation to the UK’s nations and regions.
“Sadly, we look set to see significant redundancies from tour operators and the tourism supply chain next month, which means that many communities and businesses throughout the UK who depend on significant revenue from international visitors will also suffer.
“We face considerable and exceptional challenges as our sector looks to survive the impacts of COVID-19 and we are calling on the Government to do much more to protect the jobs and businesses who will be vital to our long term economic recovery and the Government’s ambitions for a truly global Britain.”
Stephen Broughton, owner and managing director of Windermere-based Mountain Goat Tours, said: “My business has been operating for over 40 years and normally turns over £2m revenue annually.
“We specialise in running small, personalised tours in the North of England and Wales for both domestic and international tourists and last year over 50% of our revenue came from overseas visitors.
“Whilst the lifting of quarantine measures is very welcome – the reality remains that we are already over half way through the tourism season and many people will be reluctant to travel overseas for some time.
“We are hopeful that we will be able to increase our share of domestic visitors this year, but social distancing requirements on transport is also making this side of the business unviable.
“An extension of the job retention scheme until the tourism season starts again next March would be fantastic and would make all the difference to the survival of our business.
“Our most valuable asset is our staff and we are in an area where tourism is the main source of employment. We need to do everything we can to maintain a livelihood for them.”
Meanwhile, The Airports Operators Association (AOA) has called for urgent business rates relief in line with that afforded to the hospitality, leisure and retail sectors.
The call comes following the unprecedented collapse in passenger numbers induced by COVID-19, which has brought aviation to a near-standstill, with airports still having to pay more than £500,000 a day in businesses rates.
The AOA is calling for a year-long relief from business rates for all airports in England and Wales to come into effect as soon as practical.
It says HM Treasury should extend the same kind of relief which has been afforded to other sectors of the economy. It added that it is clear that local authorities, faced with their own financial issues, are not able to support UK airports on their own. This measure would bring airports in England and Wales in line with their Scottish and Northern Irish counterparts.
The AOA says airports in England have paid more than £70m in business rates since the start of lockdown in March, despite passenger numbers being down by around 97%. The annual cost of business rates for airports in England is more than £210m.
In Scotland and Northern Ireland, airports have been given substantial domestic rates relief for a year from the respective devolved authorities.
AOA chief executive, Karen Dee, said: “Commercial aviation in the UK has weathered the worst four months in its history and faces a lengthy recovery with passenger numbers not expected to reach pre-COVID levels for a considerable period.
“Our industry is on its knees and the Government needs to do much more to support airports in recovering from COVID-19.
“That our airports have been paying £500,000 in business rates every day during the lockdown reflects that the Government simply has not grasped the severity of the challenge and threat that the pandemic has posed and continues to pose to our sector.”