LOTUS CORONAVIRUS UPDATE (28.04)
RE-OPENING THE UK?
Boris Johnson returned to Downing Street on Sunday night to resume control of the Government after recovering from his own personal battle with the Covid-19 virus.
Media reports over the weekend and on Monday morning agreed that the prime minister faces some of the toughest decisions of his career – those of when and how to ease the lockdown. In Wales and Scotland exit strategies have already been laid out and the Government is facing pressure from its own back-benchers; the newly formed opposition front bench; industry bodies and the former chancellor Philip Hammond, who called on the Government to set out plans to end the lockdown and re-start the economy, saying the nation could not afford to wait until a vaccine was available.
The Times on Monday reports that business forecaster EY Item Club said that Britain’s economy will fall into deep recession and take three years to return to last year’s level of output.
Similarly a Channel 4 Documentary ‘When Will Lockdown End?’ outlined the difficult balancing act the Government has to perform in order to come out of the lockdown. If the lockdown lasts too long, it will destroy the economy, resulting in cuts in funding to the NHS and other vital public services, all of which will in turn cause premature deaths. But if lockdown ends too early, the health service is in danger of becoming overwhelmed. The programme looked at the various treatments being trialled as well as antibody tests and plans for herd immunity.
Industry body the Institute of Directors has asked for guidance on lifting the restrictions on businesses amid fear over the damage being done to the economy. They say they need an exit path because of the bleak outlook shown by a survey of more than 1,000 directors conducted last week, which showed that while 24% said they were optimistic of their own prospects; 46% were pessimistic; however pessimism jumped to 80% when asked about the prospects for the UK economy.
No sudden nirvana
In the Prime Minister’s first statement to the public, he held the current Government line, and he made clear, that when the infection rate is deemed low enough, there will be no sudden nirvana, reported the BBC. Life in the 'next phase' will be a slow return of a more familiar rhythm and he will not be swayed by demands to open up the economy more swiftly.
Review on 7 May
But there are signs that plans are in the making. A formal review of lockdown is due on 7 May and The Times reports that advisers have been appointed to help ministers draw up guidance to enable companies to get back to work and prevent the economy from collapsing.
Construction companies, who ceased operations, but have been allowed to trade under present rules are now starting to resume operations under enhanced safety conditions; some fast food retailers have opened up and other retailers began to open at the weekend with restrictions.
A government spokeswoman also said that it was engaging with key stakeholder and industry groups as well as unions on safe working once lockdown measures have been relaxed.
Wizz Air is first airline to restore flights from London to Europe
Most media outlets reported on Saturday that budget airline Wizz Air would be the first airline to start flying from its base at Luton airport to European destinations such as Tenerife, Tel Aviv and Lisbon from 1 May.
Many of the countries they are flying to are refusing to admit foreign nationals and the UK Foreign Office is still advising against non-essential travel.
iNews reported that Wizz Air said that the new flight schedule would commence “to provide an essential service to passengers who need to travel”, with the caveat that no further government restrictions are announced.
Speaking on an Aviation Week webcast, Wizz Air chief executive Josef Varadi forecast a phased return to flying beginning next month. He said: “We have four aircraft flying now. We are flying only 3% of capacity. On 1 May we’ll have about 10% of the fleet flying.
The Daily Mail said that Wizz Air has announced a raft of protective measures for passengers and staff.
Cabin crew will be required to wear masks and gloves throughout trips and sanitising wipes will be distributed to passengers, the airline said.
Aircraft will also be disinfected overnight if they have been used for flights.
The airline has not said there will be a requirement for passengers to wear face masks on flights, although many already do.
Airlines asking Government for bail out
It has been widely reported that airlines are calling for an extension of the Government’s Job Retention Scheme to help recovery at a time when demand is expected to be weak. Travel Weekly reports that trade body Airlines UK has written to chancellor Rishi Sunak warning that if the scheme is “withdrawn prematurely, carriers experiencing only a tentative revenue recovery will face a renewed cash crisis”.
The letter from chief executive Tim Alderslade said: “We believe that the scheme will need to be extended beyond June, and that consideration should be given to measures – including a ‘tapering’ of the scheme or a review on a sectoral basis – to avoid aviation facing a cliff-edge post-June, whilst services are scaled-up.”
This comes as Lufthansa has asked the German Government for further help.
The Financial Times reports that Ryanair’s CEO Michael O’Leary believes that the airline can resume 40% of its flights in July and 80% of its flights by September but not if they had to implement social distancing and not sell the middle seats.
Travel Weekly reports that Virgin Atlantic continues to look at options for further funding. Founded by Richard Branson but now part-owned by Delta, the billionaire is coming under direct pressure to use his own personal wealth to bailout Virgin Atlantic, although he has insisted any government help would be on commercial terms. He has denied that he is looking to sell the airline outright.
Tougher restrictions at airports and quarantine?
The Times reports that George Eustice, the Environment Secretary, indicated at the press briefing on Sunday that a second phase of Covid-19 management could include tighter restrictions at borders. The UK has not closed its borders in the way that other countries have and it is possible that tougher screening and quarantine measures could be implemented in a next phase.
THE REFUND ISSUE
Whilst the Government has made no formal announcement on the issue, refunds are still high profile in the travel and consumer pages of the national media and a lead item in the travel trade press.
For example, the consumer editor of The Observer Anna Tims reports that scores of people had written to her about cottages.com – which refuses to refund – and instead is giving vouchers to people and insisting they rebook by August. Not protected under the PTRs, they are legally entitled to do this, she says, but morally, it is a different matter. What makes this different, is that the company is insisting that the vouchers are used within four months. The firm is owned by a private equity firm and has a turnover of £90 million – and money is not given to owners until holidays take place, so they are sitting on millions of pounds at the expense of owners and consumers, she adds.
Airlines and tour operators
Nigel Thompson in The Sunday Mirror provides an essential guide on how to get a refund and Ben Clatworthy ran an opinion piece in The Sunday Times about refunds as hundreds of readers had contacted the title. He says “The Sunday Times understands that Kelly Tolhurst, the aviation minister, plans to write to MPs imminently to update them on the sector’s handling of the coronavirus crisis.” Tour operators and travel agents are also under pressure for not refunding customers as they are obliged to do under the Package Travel Regulations. But many blame carriers for this. Miles Morgan, who owns an agency in southwest England, says: “Airlines are at the top of the tree — they have not operated the flight, and not incurred the cost, but are sitting on the money. If holiday companies were refunded by airlines, it would put them in a much stronger position to refund their customers in a timely fashion.”
On Monday ABTA told TTG that it could revoke membership of operators refusing to refund customers, whilst pressure group ‘Right to Refund’ told Travel Weekly that it was urging ABTA to rethink its position and claimed that the Government was ‘aghast’ at ABTA’s position. Meanwhile, Liberal Democrat MP Ed Davey believes ABTA’s refund credit note scheme is a "smart way" to prevent a "domino collapse" across the whole travel sector, and has urged the Government to issue new guidance to alleviate the refund crisis in travel.
The Times reports on Tuesday that EU tourism ministers held a video conference call on Monday to thrash out a deal that will revive tourism whilst keeping populations safe.
The emerging approach is to try to agree common guidelines for reopening resorts or beaches on a restricted basis. Ministers discussed opening “tourist corridors” between EU member states that would be subject to “common rules and protocols” for social distancing and tracking and tracing systems if there is an outbreak of infections at a resort.
The Czech Republic, Slovakia and Croatia, all countries with low incidence of the virus, have proposed creating such a corridor to the Adriatic Coast based around common standards that would be negotiated with Brussels.
Lifting travel restrictions between EU countries has not yet been discussed at European level and presents the biggest obstacle to a resumption of tourism.
Planned guidelines will involve social distancing to thin out the crowds at airport departure lounges, swimming pools, hotels or traditionally packed city destinations or beaches and present major challenges for the tourism industry.
TUI, Travel Union International, the Anglo-German multinational travel and tourism giant headquartered in Hannover, Germany, expects tourism to “open up again step by step”
“First with people holidaying in their own country and neighbouring nations that have either been less affected by the pandemic or have seen the pandemic’s effects go into marked decline,” said a spokesman. “The holiday season will probably start later and then carry on beyond the autumn, into November or even December.”
Some beaches in Spain reopened at the weekend for the first time in six weeks. Marbella and Mijas on the Costa del Sol are among the areas where children under 15 can enjoy a walk on the sand with a parent, says The Star on Sunday. The Financial Times says for six weeks, the children in Spain had to stay indoors, to endure one of the toughest lockdowns in one of the world’s most sociable countries. This country spends more money on bars and restaurants than almost any other country in Europe and two-thirds of the population live in flats.
Spain’s Lost Summer
A feature in The Financial Times focusing on the world’s best female chef, Elena Arzak, outlines the issues facing the restaurant sector in Spain. Arzak speculates tourism figures will take five years to recover. The piece also quoted Yolanda Diaz, Spain’s employment minister who suggests tourism, leisure and cultural activities will not resume until the end of the year.
The Times reports on Tuesday that in Spain, which gets 12 per cent of its GDP from tourism, the government has so far resisted calls from regional authorities to partially reopen beaches and insisted that it will dictate when and where restrictions will be lifted. Authorities on the Balearic Islands, meanwhile, have rebuffed calls from wealthy Germans with second homes there to allow access.
The Times reports that Sicily aims to lure back foreign tourists after the lockdown by paying half the price of their plane tickets, one in every three of their hotel nights and all their tickets for museums and archaeological sites. The regional government will use a €50 million war chest to pay for the scheme after coronavirus robbed it of about €1 billion in March and April. The vouchers will be made available on the island’s tourism website. With 13 per cent of GDP coming from tourism, Italy is keen to get the sector going after the lockdown ends on 4 May and is mulling ways to create social distancing on beaches.
This weekend Italy published a detailed exit strategy.
- 4 May, Italians will be allowed to move in their respective regions. Visiting family members will be allowed, but not wider social gatherings. Parks will reopen and funerals held with a maximum of 15 mourners. Bars and restaurants will open for takeaways. Construction workers and wholesalers will be allowed back to work as long as they maintain social distancing.
- 18 May, libraries, museums and exhibition venues will reopen, on the condition that people stay two metres apart.
- 1 June. Bars, restaurants, beauty salons will all be allowed to reopen fully, with social distancing.
At any point the health ministry will be able to order a tightening of the lockdown.
- 11 May. Restrictions to move outside the home will be lifted
- Mid-June. Bars, cafés, restaurants, cinemas and theatres as well as sporting events and festivals will open
- Schools are not obliged to open until September.
The country is now released from confinement, people are returning to work, but public gatherings will not be allowed and social distancing is being adhered to.
- 11 May. The country is expected to be easing its lockdown restrictions and many have downloaded the contact tracing app.
- 11 May. Schools will open. No dates for cafes and restaurants, with a ban on gatherings for ‘many months.’
TTG has reported that Portugal has created a tourism hygiene accreditation scheme to help reinforce confidence and boost business recovery. Portuguese tourism officials have created a "clean and safe” accreditation for its industry as the country looks ahead to its post-coronavirus tourism recovery.
The stamp of approval shows Portugal’s tourism enterprises, entertainment companies and travel agencies are all compliant with hygiene requirements for the prevention and control of Covid-19, as well as other possible diseases.
Application for the accreditation is free and valid for one year.
It requires companies to follow health and safety protocols to the standards of Portugal’s Directorate-General for Health (similar to the Department of Health and Social Care in the UK), ensuring the necessary hygiene measures are in place to avoid risks of Covid-19 contagion during tourist-related operations.
The Daily Express has reported that Greece hopes to open its borders to tourists by July.
The Times reports that Wuhan, the city where the crisis began, said that on Sunday that there were no coronavirus patients left in its hospitals.
However, Travel Daily Asia reports that Chinese tourists may not return soon, as a second wave of the outbreak is hitting many key areas, while tour agents in Europe are bypassing summer vacations and starting to offer winter packages to Thailand.
Tourism Authority of Thailand (TAT) in China reported that fears over a resurgence of the coronavirus are rising in the mainland, leading to more caution and postponement of travel.
A notable portion of new infections have been spread by people travelling abroad, prompting China to warn its citizens against such behaviour. “We acknowledge that Chinese tourists would like to travel to Thailand, but under these circumstances Beijing has put preventive measures back in place. Chinese tourists may not return before their national holiday (first week of October), or in the worst case, Chinese New Year next year,” he said.
Searches for flights in December surge by 30%
The Times reports that Skyscanner, the flight search engine has experienced a spike in searches for flights – especially long-haul routes – in December, with New York, Tenerife, Florida and Sydney the most popular destinations
Will holidays be cheaper?
Nick Trend at The Daily Telegraph has examined the issue of the price of holidays after lockdown and where we are likely to travel to.
- He believes that we may see a quasi-medical atmosphere on planes to start off with at least, to provide reassurance, with staff wearing masks and gloves and social distancing trialled.
- When confidence has collapsed in the past – after a terrorist incident – for example, promotions and deals have been put in place to tempt back customers, but, he believes this won’t last for long after restrictions ease. Expect deals in autumn, but not after.
- The cost of flying will rise, as debts have been incurred, there will be fewer, debt-ladened airlines and there will be fewer business and leisure customers
- Hotel rates may remain lower for longer as competition for a smaller pool of travellers will be fierce
- Travel companies will go bust
- Package holidays will provide more reassurance and protection
- Driving holidays will be more popular
- Younger people will be more adventurous
- Autumn might be a good time to travel to previously ‘over-touristy’ areas
- Domestic tourism will boom – and may suffer over-tourism
- It is difficult to predict when and which borders will be open to UK travellers
A webinar by Roxhill with Senior City Correspondent Simon English at the Evening Standard provided insight into:
Advertising revenue for newspapers
Last week the papers ran main campaigns from one bank and one supermarket – and that was about it. However, the Government public health message campaigns which is likely to run up to £30 million will help keep papers in business until other advertising revenue returns.
He said, post pandemic issues that will still be of interest will include:
- Gender pay gap with corporate communications faring worse than a lot of other sectors. It is also incomparable to journalist and newspaper pay – which he says is fair.
- Big tech and media – papers and big tech firms like Google do broker deal on revenue sharing, but big tech lose interest once regulatory pressure disappears. Amazon has given small bookshops £250k, but this is small money to them.
- Property. Simon English believes that big property developers for office space have been rumbled. The crisis has highlighted that companies don’t need fancy offices in premium locations and companies will override any objections with opportunities to save millions of pounds on office space. Banks leveraged to the property sector.
- Green debate. Many commentators have highlighted the improvements that have been bought about by reduced traffic and believes many will not want to go back to clogged streets and clogged lungs. However, there is a competing pressure to get the economy moving again and the concerns about environment may be put on the back burner.
Support for business has been given quicker in the States
Despite the UK’s chancellor’s early promises of state aid for the economy, the taps have been turned on far quicker in the USA. English believes that the US is more nimble, with big business taken far more seriously in the US – even under Obama – than the UK.
Trust and reputation for the travel industry
Travel Weekly broadcast a webinar with Rachel O’Reilly, Director of Communications from Kuoni and Danny Rogers, Editor in Chief PR Week.
The top takeaways include:
- The publication of the Which? report has made him less sympathetic of the travel industry.
- The report provided case studies of tour operators and airlines breaking the law; stonewalling and ignoring customers whilst refusing to provide refunds for legitimate reasons. This has resulted in consumers becoming less sympathetic to the travel industry even though Which? itself has become more sympathetic and asked the Government for clarity. He said there are clearly two sides of the story, but with many consumers furloughed and nervous about their jobs and no visibility for the future, they need their money. This is despite the fact that tour operators and travel agents have difficulty in refunding the money as suppliers are still holding onto the cash.
- Large companies are under enormous scrutiny for taking government money, especially those who have a history of not behaving ethically, not paying tax or those who have very deep pockets.
- Crisis will enhance brands who have a history of doing the right thing. Companies with a good culture, and who, for example, are well set up for customer service and have an ethical compass, are likely to emerge well out of the crisis. If companies cut costs on customer service, or hoard cash and are undertaking unethical practices, they will suffer. No blanket solution to emerging out of the crisis. Companies will find their own way through. It’s about doing the right thing. Ethical behaviour or corporate purpose has never been more important and will remain so.
- Before Covid-19 there was a looming crisis in travel: sustainability. Will the pandemic reset the balance? He doesn’t claim to know. Consumers keen to travel again and holidays again. There will be a lot of pressure to up capacity as companies and planes start to operate. There is a danger that green issues fall down the agenda. [This reflects Simon English’s sentiments – and those of others in the media over the past week who have highlighted the mantra ‘Build back better’].
- Kuoni has had a clear policy of refunding passengers, but in fact 80% of those bookings that had to be cancelled have converted into bookings for 2021.
- There are bright spots in the situation. Over-tourism is not an issue right now and sustainability will gain momentum. Kuoni wants to give back and ensure that customers can travel better. The challenge is to convince consumers that their trips are going to be safe. Business models may have to change, and the way we travel may have to change – and there are already negotiations happening on middle seats in aircraft and it looks like there will be a smaller industry in the short to medium future.
The Eco Worrier column in this weekend’s Star on Sunday outlined how the environment is benefitting through less travel
- The waters of Venice are running clear from no boats
- Reduction of air pollution in China will save more lives than were lost to Covid-19
- The Himalayas have become visible from towns in Northern India for the first time in decades
The Observer ran an interview with Norbert Röttgen – Chairman of Foreign Affairs in Germany, who said that Boris Johnson must extend the UK’s transition out of the EU for up to two more years to avoid compounding the economic damage of the Covid-19 crisis with a hugely disruptive and disorderly Brexit. He said it was now impossible to see how the UK and the EU could agree even a minimal outline free trade agreement this year, because the talks were so far behind schedule.
The Times today reports that Boris Johnson will take personal charge of Brexit negotiations as he attempts to put pressure on European Union leaders to shift red lines and to speed up rigid formal negotiations.
Michael Gove, the Cabinet Office minister gave evidence to MPs Brexit negotiations on Monday and said there was no need for an extension to the transition period as Britain was asking for an ‘off the peg’ trade deal with the European Union and it was in both sides’ interests to reach agreement by the end of the year.
Saviours of 555 Thomas Cook retail outlets, John and Irene Hays, were interviewed in The Guardian this weekend and spoke about how they were looking after customers and staff and how they were beginning to win over sceptics when the pandemic shut down global tourism.
John said: “We’ll do what we can to protect our staff, protect the business and protect our customers. We’ve just got a positive attitude on life.”
According to Irene, they have “no regrets” about buying Thomas Cook, even with the benefit of hindsight. And there are good reasons to believe them when they say they’ll survive.
“We’ll do what we can to protect our staff, protect the business and protect our customers. We’ve just got a positive attitude on life.”