UK travel operators are warning of further job losses and bankruptcies, after a surge in cancellations of half-term holidays has left them scrambling for cash.
Travel companies across the industry said they were struggling to finance refunds as customers have increasingly lost confidence in their ability to travel overseas without the government imposing quarantine restrictions on their chosen holiday destinations.
“As far as travel is concerned we are basically back in full lockdown,” said Simon Cooper, chief executive of the online package holiday operator On The Beach, which typically sends around 1m people on holiday each year. “Consumers have decided that just because [a destination] is open today it might not be open tomorrow, so what’s the point?”
Simon Williams, chief executive of Humboldt Travel, which specialises in trips to Latin America and Antarctica, said he had been forced to take out loans to cover customer refunds as airlines had delayed paying compensation to tour operators.
Under UK law, flights should be refunded in seven days, while tour operators must pay customers back within 14 days.
“We are refunding everyone in full even though sometimes we are not being refunded in full and that obviously causes big cash flow issues, which is why so many travel companies have collapsed and will collapse,” Mr Williams said.
Since March, 19 UK travel companies have ceased trading, according to the Association of British Travel Agents, including the backpacker specialist STA Travel and Specialist Leisure Group, which ran Shearings Hotels and Caledonian Travel, prompting 3,000 job losses. Hays Travel, the firm that took on all of Thomas Cook’s former travel shops after its collapse last year with the loss of 21,000 jobs, has said it will axe almost 900 staff.
The latest restrictions across the UK, combined with frequent changes to the so-called travel corridor, those countries not on the quarantine list, have only increased the industry’s woes as more consumers scrap rather than defer trips.
“The reality is that the longer this goes on the more people will want to cancel their trips,” said Sonia Davies, chief executive of Scott Dunn, a high-end travel agent, who added that she was “mentally bruised” after having to make two-fifths of 300 staff redundant.
Confirmed trips departing from the UK this Friday are less than 30 per cent of last year’s number, according to travel analytics company ForwardKeys. Departures on other days varied between 10 and 25 per cent of 2019’s levels.
Thomas Cook, now an online-only group, said searches for holidays had dropped 12 per cent following the introduction of tiered lockdowns in the UK. Richard Slater, the owner of Henbury Travel, an agent in Macclesfield, said 90 per cent of the trips he had booked for October half-term had been either been postponed or cancelled.
Even staycations have taken a hit. According to a survey this month for VisitBritain, just 10 per cent of consumers