AITO, The Specialist Travel Association, has told the Chancellor Rishi Sunak the government does not understand the outbound travel industry and is offering to meet him for a 30-minute face-to-face to explain how it all works.
In an open letter to the Chancellor, AITO sets out a list of requirements it wants the government to act upon, adding the industry has had ‘very little support’.
The correspondence says: “If this letter is too long/detailed to read, may we make a simple request to have a 30-minute meeting with you instead, to explain to you how the outbound travel industry works? A face-to-face meeting would help greatly; we report to five Government departments, none of which confers with the others. ”
It warns the government must act if it wants to avoid ‘hundreds of thousands of outbound travel industry employees being at risk of losing their jobs, their livelihoods and potentially their homes too – a prospect too awful to contemplate, and which will add enormously – and unnecessarily – to the Government’s social support bill for a long time post-pandemic’.
“Our industry has received very little relevant support to date, unfortunately – probably because Government simply does not understand our industry or deign to consult with us.”
The letter adds: “Now, with September CAA ATOL and ABTA bond renewal deadlines approaching, and having worked with pretty much zero cash flow since March 2020 (six very long months, on top of refunding huge sums in respect of bookings made long in advance for the summer season – effectively, three winters in succession; and our industry, unfortunately, loses money in the winter months), another serious challenge awaits the travel sector.
“How, with no cash inflow (but significant cash outflow), are we going to be able to gain the financial protection required by law to enable us to continue in business and to continue to provide protected package holidays for the enjoyment of our clients?
“The CAA has, via the compulsory introduction of the £2.50 Air Travel Trust Fund contribution, made it even more difficult for travel companies to obtain the necessary bonds, as the insurance bond market has dried up as a direct result of the CAA acting as a quasi insurer. Bond companies are few on the ground and becoming fewer every week in the wake of travel industry collapses that have already occurred during the pandemic. We need the Exchequer to step in promptly and to provide an incentive for bond obligors to return to the market and to offer financial protection bonds to enable the industry to continue to operate.
“While the loans that the Exchequer has launched have helped many businesses to stay afloat, we have to ask how, without cash inflow, travel companies can be expected to refund such loans if they take them out?
“This is a ghastly perfect storm of a total lack of understanding of the travel industry by the Government (our sector reports to five Government departments – the DfT, the FCO, BEIS, DCMS and the CAA) and a complete lack of Government consultation with the experts within our industry.”