LOTUS CORONAVIRUS UPDATE (06.11)
UK: LOCKDOWN 2.0
The UK travel trade barely had time (two weeks) to register the Maldives and Canary Islands coming back into the travel corridors before the UK government announced that England would follow most of its national and international neighbours into a national lockdown and leisure travel ban. Lockdown 2.0 is accompanied with an extension of the furlough scheme until March, which has at least given some travel companies some respite from a dangerous abyss.
The Daily Telegraph and The Times both reported that London Heathrow was busy ahead of the deadline with Britons fleeing the country, keen to spend at least part of the lockdown elsewhere as unlike Lockdown 1, the Prime Minister said that Britons who are already abroad now or who depart up until midnight on Wednesday 4 November do not have to cut short their trip and return early.
Similarly, Pitchup.com, the campsite comparison company, reported a last-minute surge in staycations that departed before Thursday's lockdown.
The World Travel and Tourism Council (WTTC) said that as many as 2.4 million UK travel and tourism industry jobs are under threat in 2020 if barriers to global travel remain in place. WTTC estimates that the impact of prolonged travel restrictions could wipe out £124 billion in the sector’s contribution to UK GDP, equating to a 62% drop compared with 2019.
A total of 1.9 million jobs in the UK across the trade have already been impacted, reported Travel Weekly.
With the surge in COVID-19 cases hitting Europe particularly hard, the past couple of weeks have seen a number of European countries making new announcements to toughen restrictions in a bid to reduce COVID-19 infection rates. These include:
From Midnight Thursday 5 November until 2 December, the UK government has imposed a new national lockdown.
After 2 December, different parts of the country will adopt an exit strategy, which will continue to follow the restrictions from the previous tier system, depending on the severity of infection in the local area.
Unlike the first lockdown, nurseries, schools, colleges and universities will remain open.
- Pubs, bars and restaurants must close, although food takeaways and deliveries will be permitted
- All non-essential retail must close
- A ban on the mixing of households, except for support or childcare reasons. Exercising outdoors with one person from outside of your household is also permitted. Children under school age who are with their parents will not count towards the limit on two people meeting outside.
- A restriction on travel, including outbound international travel (except for work). Travel within the UK is also discouraged by private or public transport. It has been confirmed that "hotels, hostels and other accommodation should only open for those who have to travel for work purposes and for a limited number of other exemptions which will be set out in law."
- Staying at home to be encouraged except for education, work (if impossible from home), medical reasons, shopping for goods or essentials, caring for others or exercise.
Financial support has been extended in the UK.
- The furlough scheme will be extended until the end of March 2021 covering 80% of employees’ wages – the scheme will be the same for employees as in March, but employers will have to pay National Insurance and minimum pension contributions.
- Deadlines for applications to government-backed loan schemes have been extended until 31 January 2020.
Self-employed workers will be able to claim government support worth 80% of trading profits in November. Although sole traders set up as limited companies and other freelancers will still be ineligible for help, including the newly self-employed.
The chancellor has raised guaranteed funding for the UK’s devolved administrations.
The general secretary of the Transport Salaried Staffs’ Association (TSSA), wrote to the Prime Minister to call for him to provide targeted sector support and repeat his call for a dedicated travel trade minister to be appointed to champion the industry.
A “stark picture” is faced by the travel industry, with tens of thousands of jobs and many businesses already lost as a result of the pandemic.
In his letter, Cortes writes: “Doubtless you will be aware that this normally vibrant sector of the economy has taken a massive hit in recent months, with close to 100,000 jobs lost."
Since Friday 16 October, Northern Ireland has been under tighter restrictions and on Saturday the devolved government said current restrictions will end "as planned" after four weeks - on 13 November.
In a tweet, Deputy First Minister Michelle O'Neill reminded people that the restrictions in England do not apply in Northern Ireland.
The current restrictions in Northern Ireland include:
- Work from home unless unable to do so;
- No unnecessary travel should be undertaken.
- Universities and further education to deliver distanced learning to the maximum extent possible with only essential face to face learning where that is a necessary and unavoidable part of the course;
- The half term holiday break for schools and colleges was extended to a two-week break to run from 19 to 30 October.
- Support bubbles are to be limited to a maximum of 10 people from two households;
- No overnight stays in a private home unless in a support bubble;
- Closure of the hospitality sector apart from deliveries and takeaways for food, with the existing closing time of 11.00pm remaining.
- Other takeaway premises will be brought in line with hospitality with a closing time of 11.00pm;
- Close contact services such as hairdressers and beauticians are not permitted to open, apart from those relating to the continuation of essential health interventions and therapeutics.
- No indoor sport of any kind or organised contact sport involving household mixing other than at elite level;
- No mass events involving more than 15 people (except for allowed outdoor sporting events where the relevant number for that will continue to apply);
- Gyms may remain open but for individual training only with local enforcement in place;
- Funerals to be limited to 25 people with no pre- or post-funeral gatherings;
- Off licenses and supermarkets will not sell alcohol after 8.00pm;
- Wedding ceremonies and civil partnerships to be limited to 25 people with no receptions.
A new five-level system of coronavirus restrictions came into effect in Scotland on 1 November 2020. It replaces the measures that had been in place since 9 October, under which people living in the central belt experienced tighter restrictions than the rest of the country. No part of Scotland will be in the highest tier, but the central belt will be in level three of the new system. Dundee has been moved up to level three, while some areas have been moved down to level one.
People living under level three rules should not travel outside their own local authority area for anything other than "essential" reasons. This can include work, education, outdoor exercise, healthcare or caring responsibilities, and essential shopping.
Those in level one or two areas are also being told not to travel into a level three area, except for essential purposes.
People are also being asked not to travel between Scotland and England unless their journey is essential.
The Scottish government advises against non-essential foreign travel, and people arriving from certain countries must spend two weeks in quarantine.
More information can be found here.
Scotland’s travel industry joined forces for a mass protest outside the Scottish Parliament on Thursday 5 November.
The Scottish Passenger Agents’ Association lobby of Holyrood will urge MSPs to ‘save Scottish travel’ by providing tailored support for the country’s travel sector.
Members also want an affordable COVID-19 testing system to be introduced by Christmas to allow international travel to take off once again, with an end to quarantine regulations on return from overseas travel.
Wales announced a 17-day firebreak, which started 23 October and is due to run to 9 November. People's behaviour during and after Wales' national firebreak lockdown will determine how successful it is in tackling the coronavirus pandemic and what actions will be taken next. The Welsh Government will later outline what restrictions will be in place when it ends.
The First Minister said non-essential retail, gyms, places of worship and schools - for Year 9 and above - would reopen from 9 November.
Current restrictions include:
- Stay at home
- Pubs, restaurants and non-essential shops shut
- Primary schools re-opened after half-term, but only years 7&8 return in secondary schools for duration of lockdown.
- Nursery schools open throughout
- No meetings between households inside or out
- Hotels, hairdressers, beauticians all to close for duration of lockdown.
The Irish government re-introduced the highest level of restrictions from 21 October to 1 December. These are termed as ‘Level 5’ restrictions. However, they differ from earlier in the year as they are keeping schools, construction and manufacturing open across the Republic.
The ‘Level 5’ measures include the imposition of a 5km travel limit – and a ban on non-essential travel outside the country. The travel restrictions had already been among the severest in Europe and no other countries had been on their ‘green list’ when these new measures were introduced.
Until a vaccine is reached, the Taoiseach (Irish PM) Micheál Martin told the Irish people that he expected a rolling cycle of public health restrictions being tightened and loosened. The Taoiseach said the Government intends that the country will go into Level 3 when the new period of restrictions expires.
Spain declared a national state of emergency on 26 October (in which the Canary Islands are exempt). The new measures announced include a limit on public and private gatherings of different households to a maximum of six people. Restrictions on movement between districts are determined by regional leaders. A review of the measures will happen in two to three weeks’ time, the health minister has said.
From Saturday 14 November travellers to the Canary Islands will need to provide proof of a negative COVID-19 test.
On 4 November, the Italian Prime Minister announced that the country has been divided into three areas under a new emergency decree to combat the second wave of COVID-19.
The three-tier system is based on a colour code according to the intensity of the epidemic, dividing the nation's 20 regions into red (high-risk), orange (medium risk) and yellow (low risk) zones. There are four high-risk areas declared red zones. Travel is banned to these areas.
The system came into effect on 6 November and will be in place until 3 December. In addition there will be a nationwide curfew at night, between 22.00 and 05.00, in place until 3 December. Museums and archaeological sites across Italy will also close from 6 November, with shopping malls closing on holidays and weekends nationwide.
As in Italy's March crisis, the worst-hit region is Lombardy, which includes Milan. Next comes Campania, the region around Naples.
Germany entered its first day of a month-long "lockdown light" on Monday 2 November, shutting restaurants, bars, gyms and entertainment venues, but keeping schools, shops and workplaces open.
The lockdown is not as restrictive as the March-April one, and food outlets can still provide takeaways.
"It will be a Christmas under corona conditions, but it should not be a lonely Christmas," Angela Merkel, the German Chancellor said, explaining that family visits should be feasible, but without any "lavish New Year's parties".
On 5 November, Greece’s prime minister announced a nationwide three-week lockdown. Under the new lockdown measures, which take effect on Saturday until 30 November, all shops except pharmacies and food stores will close around the country. Restaurants will be able to deliver meals but shut to customers.
Residents will only be allowed to leave their homes for work, medical appointments or physical exercise and will need a time-slot to venture outside.
The main difference with the lockdown that the country imposed in the spring is that kindergartens and primary schools will remain open. High schools will close and operate on a remote learning basis.
From Tuesday, ski resorts across Austria will be forced to close until at least 30 November as the country enters a second national lockdown.
The resort shut-downs follow those in Italy and France last week, where ski resorts are closed until 1 December and 24 November respectively – at the earliest, The Daily Telegraph reports.
Under the new restrictions, travel in Austria will be banned; hotels, restaurants and bars will be closed; and there will be a curfew in place between 8pm and 6am. Many hope that the introduction of a month-long second lockdown will save the lucrative Christmas holiday season.
The Swiss slopes opened for the season in Verbier and Andermatt last weekend – the Alpine nation is now the last remaining place in Europe where holidaymakers can ski – while limited slopes in France, Italy and Austria are permitted to remain open for professional sport training only.
Many tour operators are now pinning their hopes on a surge in bookings when travel regulations are lifted – whenever that may be. “The new lockdowns across Europe have killed any optimism there was about the season starting as planned,” said Iain Martin, host of The Ski Podcast. “We could see significant last-minute bookings, and at present that is the best we can hope for.”
REST OF THE WORLD
The Presidential elections took place on 3 November. By 6 November, democrat Joe Biden was in the lead but with several swing states still to declare. Due to COVID-19, millions of Americans cast votes by mail, which were taking longer to count than normal.
It’s unclear as to whether a democrat victory would make a difference to the travel landscape, but Chris Thompson, chief executive of Brand USA, which held Travel Week Europe between 26-29 October said: “There is a lot of pent-up demand, but also pessimism and anxiety as it [the pandemic] is lasting for so long….but the power of travel can transcend all of that once the barriers to travel are relaxed….Long-haul travel will be the last thing to come back…But beyond Canada and Mexico, Europe is the one market we are most excited about coming back.”
This week New York scrapped its quarantine list and will instead move to a testing system in a bid to open up domestic travel, reports The Daily Telegraph travel blog.
Previously travellers from 41 other US states were required to self-isolate for 14 days upon arrival anywhere in New York State.
The new two-test system allows visitors to cut quarantine down to just three days by submitting a negative COVID-19 test before departure, then testing negative again while isolating.
Peru's ancient mountain citadel of Machu Picchu has reopened to visitors after almost eight months of closure.
Locals marked the occasion with a traditional Incan ceremony to thank the gods on Sunday, expressing gratitude for the return of a vital part of the local economy. However, with coronavirus still a threat in the country, capacity will be limited to just 675 people a day – a significant reduction from the pre-pandemic limit of 2,500.
AIR CORRIDOR UPDATES
The UK Government removed Sweden and Germany from the UK Travel Corridor list. From 4am Saturday 7 November, if you arrive into the UK from these destinations you will need to self-isolate. All arriving passengers should complete a passenger locator form on arrival.
In an unusual move, Grant Shapps made an overnight decision to remove Denmark from the quarantine list, which took effect from 4am on Friday 6 November. This was due to reports from health authorities in Denmark that a mutated form of coronavirus that can pass to humans was present in the country's mink farms.
The Government did not add any countries to the Travel Corridor list this week.
The government’s Global Travel Taskforce was due to submit recommendations to the Prime Minister this week, but no public report has been made. Aviation sources to Travel Weekly suggested that the Department of Transport was “caught on the hop” by the lockdown, and urged the Government to “use the lockdown period to work on ensuring that a ‘test regime is ready for when lockdown ends.”
EasyJet has revealed that it expects to cut almost a third of its workforce; to fly just a quarter of planned capacity over the winter due to travel restrictions; and will fly no more than 20% of planned capacity in the first quarter of its 2021 financial year instead of 25% previously indicated. The cuts came simultaneously to reports from Germany that EasyJet is in constructive talks with the German government over support measures, but no sums were disclosed.
BA will reduce its operations during November and furlough "many more" staff due to the new lockdown in England. It said the restrictions were a "blow to our hopes for the winter season" as it grounds most of its fleet, including all flights from Gatwick. BA will continue flights to repatriate customers overseas and for the movement of essential cargo.
Chief Executive Michael O’Leary has said that the carrier will be reducing winter capacity by about 40% compared to last year, and it won’t offer refunds to passengers on flights that aren’t cancelled. Customers can, however, change their dates for free.
This week Ryanair also said that they would plan to expand as other carriers downsized and sited strong bookings and pent up demand when the Canary Islands corridors opened. O’Leary also said that they hoped to run 80% of capacity in summer 2021.
The UK’s pilot union has called for the government to commit to end the ban on international leisure travel on 2 December. BALPA general-secretary Brian Strutton said that despite promising bespoke assistance for airlines back in March, none has as yet been forthcoming, although they have been able to access existing schemes.
Heathrow Airport is leading plans to seek a judicial review against the Treasury's move to end VAT rebates for tourists, arguing that it will intensify the crisis afflicting the retail industry due to COVID-19.
Eamonn Brennan, director general of Eurocontrol, the umbrella body for the EU’s air traffic control authorities, predicted that it could take almost a decade for airlines to recover from the pandemic, reports The Irish Times.
Its figures show that the number of flights in European skies are likely to fall almost seven million this year to 4.5 million from 11.4 million in 2019.
Eurocontrol’s “best-case scenario”, with a vaccine available to travellers next summer, forecasts that air travel could return to 2019 levels in 2024.
“There is a very real prospect that this recovery could take even longer, perhaps to as far out as 2029,” said Mr Brennan.
Lufthansa Group says it remains on track for returning to a positive operating cash flow during the course of 2021, despite an “operating cash drain”, reports TTG.
The company said the prerequisite for the return is that the pandemic situation allows for an increase in capacity to around 50% of pre-crisis levels.
In order to adjust to the long-term changes in the market, the group is implementing “extensive restructuring measures” in all business units.
Wizz Air is determined to generate a “head start” when COVID recovery emerges despite heading toward a challenging winter, reports Travel Weekly.
The Hungarian low-cost carrier warned that “cash positive flying” could be minimal over the next few months.
The projection came as the airline reported a 97% collapse in first half profits from €607 million to just €17.3 million in the period to 30 September.
Passenger numbers fell by 70% year-on-year from 22.1 million to 6.5 million and revenue was down by almost 72% to €471.2 million.
TOUR OPERATOR UPDATES
RESPONSIBLE TOURISM COMMITMENT FROM EASYJET HOLIDAYS
The boss of easyJet Holidays said he is planning future destinations based on the operator’s ability to make a positive impact on local economies, reports Travel Weekly.
Being relatively new, the operator does not have a legacy of destinations that it traditionally serves, so it can look at places where it “can really make a difference”, said chief executive Garry Wilson.
Talking about sustainability during London Travel Week, ahead of WTM Virtual, he said: “The strength of the easyJet network means we have so many aircraft and fly to many of the secondary and smaller destinations and some of those areas have fantastic offerings from a tourism perspective but they never get the headlines or attention that others get.
“I am an exponent of getting behind those. We can start to make positive impact.”
Talking to WTM’s responsible tourism advisor, Harold Goodwin, he said the COVID-19 crisis had highlighted the importance of communities working together – and the vital role of outbound tourism in supporting economies in many destinations.”
TUI, JET2 AND THOMAS COOK
Major tour operators all announced that they would stop selling holidays from England and Wales from 5 November up to and including 2 December, 2020. As the current regulations have been implemented in England and Wales only, TUI said all holidays departing from Scotland will continue to operate as planned, unless customers are proactively contacted and told otherwise.
Travel agents and tour operators say they are pinning their hopes on an expected surge in sales at turn-of-year after giving up all expectations of a winter season.
Despite the on-going impact of the pandemic and travel ban introduced as part of the second England lockdown, agents said they remained staunchly optimistic about a resurgence in sales early next year.
Advantage Travel Partnership said it would continue to plan promotions for the peak season sales period, traditionally in January, even if they have to be pushed back due to the current crisis
CORPORATE BUSINESS TRAVEL UPDATE
Abby Penston from Focus Travel Partnership said that despite the fact that Lockdown 2.0 allows for business travel, most TMCs said that their customers are confused by the rules and “holding back to see what will happen.” Testing will not be a silver bullet, and it is clear that aligned international policies over lockdowns and travel restrictions will be key to recovery. She also called for the UK government to properly engage with the industry to expedite solutions. “With Brexit looming, this country cannot afford to let its travel industry stagnate or risk our standing as a European hub of travel excellence. It must work closely with the industry and invest in it for the future.”
ECONOMIC OUTLOOK HEADLINES
The UK looks set to enter a double-dip recession this winter, as business surveys show economic growth almost halted last month even before the latest lockdown was announced, according to IHS Markit. The latest IHS Markit/CIPS services Purchasing Managers’ Index fell to a four-month low of 51.4 in October from 56.1 in September. This would suggest the service sector was already close to stalling even before the lockdown announcement.
The Daily Telegraph writes that thousands of businesses are braced for a “truly devastating” blow from Boris Johnson’s second lockdown, amid fears that the economy will collapse by around 12 per cent this month.
FCA WATCHING BANKS ON HOW THEY SUPPORT SMALL BUSINESS
The Financial Conducts Authority has told banks that they will face fierce scrutiny when it comes to the way they treat small businesses when recovering billions of pounds of state-guaranteed debt accrued during the pandemic, reports The Times.
TRENDS & CUSTOMER SENTIMENT
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Global tourism will take “at least 3-5 years” to recover from COVID-19, according to a report to be launched at WTM Virtual, TTG reports.
The Euromonitor International report, Accelerating Travel Innovations after Coronavirus, says provided the pandemic is contained within a year and demand begins to rebound in 2021, airlines will take “a minimum of four years” to recover, whilst lodging and intermediaries will take even longer.
The report says there are bigger challenges for the UK from the possibility of a no deal Brexit.
Caroline Bremner, Euromonitor’s head of travel research said: “The UK economy is forecast to contract by 11% in 2020, providing that there is not a prolonged period of social distancing measures.
“Unemployment is expected to double to around 8%. Inbound tourism receipts are expected to fall by –49% in 2020 in a best-case scenario.”
LOTUS is a multi-award-winning PR, marketing and representation consultancy specialising in travel and tourism, working with destinations, travel associations, hotel groups, airlines, tour operators, transportation companies and other tourism related businesses.
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