LOTUS CORONAVIRUS UPDATE (11.09)

LOTUS Covid-19 Impact Report 11 September 2020

• Four countries lose travel corridor status
• UK bans meetings of more than six people
• Island Corridors introduced
• Scotland
• Parliamentary debate
• Government aviation strategy
• Lobbying
• Aviation Route developments
• Tour Operators & Travel Agents
• Destinations
• Economy
• Brexit

FOUR COUNTRIES LOSE TRAVEL CORRIDOR STATUS

Travellers from Portugal, Hungary, French Polynesia and Reunion to the UK have until 4 am on Saturday to return without facing a two-week quarantine – the Government announced on Thursday 10 September. Grant Shapps, the Transport Secretary removed four more countries from its list of approved destinations and added Sweden to the ‘safe list.’

A main tourist destination for Brits, Portugal was only added to the ‘green list’ on 21 August, but the Azores and Madeira remain in the travel corridor.

The number of European destinations that have no major restrictions in place and remain in the UK corridors is shrinking.

UK BANS MEETINGS OF MORE THAN SIX PEOPLE

Following increases in infection rates in the UK, the government has banned social gatherings of more than six people from Monday 14 September. Offices, schools and colleges are not covered by the ban as workplaces are meant to be ‘Covid-secure’. Sporting events are also exempt. No end-date has been set and it is inevitable that October half-term plans will be impacted and speculation that the peak travel time of Christmas will be impacted.

Whilst no official mention has yet been provided on conferences, the announcement is likely to provide further impetus for organisers such as Reed Exhibitions to switch fully to virtual platforms for travel trade events this autumn. WTM Virtual is already being planned for 10-11 November.

Already, ETOA (European Tourism Association) has announced the move of its Global European Marketplace (GEM) onto a virtual platform. GEM is the most influential annual contracting event in the calendar, which normally attracts 800 attendees in the week before World Travel Market.

ISLAND CORRIDORS INTRODUCED

On Monday 7 September, the UK Government announced a more targeted approach to the quarantine system in England. Now a country’s islands can be treated differently from the mainland. Immediately seven Greek islands were moved to the ‘red list’. Arrivals from Lesvos, Tinos, Serifos, Mykonos, Santorini, Crete and Zakynthos need to quarantine for two weeks from 4am on Wednesday 9 September. The rest of Greece remains unchanged. The Transport Secretary reported that more accurate data had paved the way for the change, but regional corridors where there were no natural boundaries would not be introduced. The new policy reflected actions taken by Wales, which then followed England by adding Santorini, Serifos and Tinos to their red list too.

In addition, Grant Shapps announced that the Government was stepping up enforcement of quarantine and that those who flouted the rules would face criminal charges.

Travel Weekly commented that the introduction of a regionalised approach for islands will be welcome to mainstream specialists, who will hope that it might open up the winter-sun season for the likes of the Canaries. The Times also understands that the approach could lead to arrivals from Sicily being quarantined this weekend after a spike in cases while the rest of Italy could remain in the UK’s travel corridor.

Others such as International Airlines Group said that the move was too late and that the damage had been done. Derek Jones from Kuoni felt that the change added complexity and solved nothing and that a comprehensive testing regime was required instead.

The highly volatile nature of the ‘green list’ - the Greek islands are the 18^th territory to have been removed from England’s one, inflicts ongoing pain for the travel industry. Many travel businesses are shifting their marketing focus to 2021. Shai Weiss, CEO of Virgin Atlantic, fresh out of the blocks from restructuring and recapitalisation told BBC’s Radio 4’s Today programme that for long-haul, the outlook is tough. The airline has planned to run 25% capacity for 2020 and only 50% capacity in 2021 compared to 2021, even though they expect a return to some kind of normality next year.

Scotland

The Telegraph reported that Scottish holidaymakers with bookings to Greece and Portugal, which are both on their red list, have been told that they will not get refunds from airlines which are continuing to fly to the destinations and instead will have to lose their money or quarantine on their return.

Parliamentary debate on aviation

Senior politicians championed travel industry causes on Thursday 10 September in a parliamentary debate on aviation and slammed the government, demanding support for airlines and airports and the rapid introduction of testing to reduce quarantine restrictions.

Former Prime Minister Theresa May said: “If you want to get the economy moving again, get planes flying. If you want to get planes flying, get testing.

“Stopping people flying into the UK is not going to stop Covid in the UK. It is here. What it does mean is job losses and a negative impact on our economy.”

Huw Merriman, chair of the aviation select committee, noted the aviation sector is worth £28 billion to the UK economy and directly employs 230,000 and said: “Already 30,000 jobs are at risk.”

Ahead of a parliamentary debate, the Unite Union disclosed statistics suggesting that there will be 6,000 job losses at Gatwick airport and its suppliers without urgent government support.

Government aviation recovery plan

Details of a forthcoming Government plan for the recovery of the aviation sector were announced on Monday 7 September, in a Department for Transport Response to a Transport Committee’s Report: ‘The impact of the coronavirus pandemic on the aviation sector.’ The recovery strategy is to be published in the autumn. The strategy, to run until 2025, will be created “in the context of the government’s green ambitions” and is expected to address some of the Committee’s concerns under broad headings:

• the return to growth of the sector; workforce and skills;
• regional connectivity and freight; innovation and regulation;
• consumer issues; climate change and decarbonisation;
• health, safety and security; and the critical role that UK aviation plays in retaining the UK’s global reach.

Unite union assistant general secretary Diana Holland said that the government finally developing a plan to support the aviation sector was welcome but ‘too late.’

LOBBYING

Support for the travel industry ‘hit new heights’ last week, reports Travel Weekly, with two national newspapers launching front page campaigns – Test4Travel from The Daily Telegraph and ‘Get Britain Flying Again’ from The Daily Mail. Backing also came from the Labour Party and 80 MPs in the Future Aviation Group – a lobbying group that has support from Airport Operators Association (AOA), Airlines UK, The Air League, IATA (International Air Transport Association) and other industry groups.

Other lobbying groups include The Save Future Travel Coalition made up of AITO, ABTA, Advantage, the SPAA, the BTA, UKInbound and the Association of Touring & Adventure suppliers and the All Party Parliamentary Group on Business Travel, which is chaired by former parliamentary under-secretary of state for transport Stephen Hammond. The APPG’s first meeting took place on Tuesday (8 September).

All the groups are concentrating on urging ministers to introduce measures to support the recovery of the UK’s aviation and travel sectors and are focused on further border testing to reduce quarantine; an APD holiday; support for SMEs through schemes like rates relief or retail grants and an extension to the furlough scheme.

ABTA believes that the Budget is when the next economic support package will be announced, and it is important that the industry’s voices are heard before that.

Chief Executives at Heathrow, Gatwick, Manchester, Birmingham and Luton signed a a letter to the Prime Minister and Chancellor, giving the Government seven days to give the go ahead to testing as one of a series of measures to prevent the loss of up to 110,000aviation and allied industry jobs.

1. Testing

The Government has so far resisted calls to introduce testing at airports. Grant Shapps, Transport Secretary said: “Testing at borders sounds logical, but it will not capture those who are asymptomatic.

“Quarantine combined with testing is more positive. We are working on a test and quarantine policy and I will update the House on testing in the coming weeks. I will return with proposals that are currently being worked on with the industry.”

Announcing social restrictions and ambitions for a new mass testing policy at a press briefing on Wednesday 9 September, the Prime Minister said the moves were not intended to cause any ‘extra burdens for the travel industry…. “We want to get people flying as fast and efficiently as we can…We are going to look at all the ways we possibly can with new technology and better testing to liberate people to fly in the way that they want to. That’s an absolute priority for the government.”

The Telegraph’s Test4Travel Campaign analysed that Infection rates had fallen in countries using testing at airports. The data, covering mid-august to early September, show Greece, Denmark, Iceland, Germany, Cyprus and Singapore all reduced their infection rates after intensifying border testing to let arrivals avoid a 14-day quarantine.

2. APD

On Monday the Treasury confirmed that it will launch a consultation on aviation tax reform and could introduce an APD suspension.. A reduction or suspension would be welcomed by passengers and travellers. The Telegraph estimates that the biggest beneficiaries in the short term would be the airlines, who may or may not make adjustments to fares, but ultimately it would benefit the consumer as it relieves the financial pressure on the airlines who will then be able to offer more routes and lower fares.

3. Free Travel?

London businesses lobbied Chancellor Rishi Sunak to back a “big gesture” of free travel into London for tourists and workers to break the habit of people staying at home.

The Evening Standard revealed on Friday that ministers and Transport for London are discussing a scheme dubbed “First Ride Free” that would give millions of people free travel into London for a single day of their choice.

The Belgian government has already launched free rail pass to all over-12s to boost tourism.

Top nightclubs including Ministry of Sound and Revolution Bars will take part in virtual talks with minister for London Paul Scully to discuss ways to boost the late night economy.

AVIATION

IATA

Travel Weekly reported on IATA statistics for aviation in July revealing that global air traffic was 80% down year on year and international traffic 92% down.

The main issue for most countries is borders are closed but Europe is the only international market showing growth.

IATA chief economist Brian Pearce said “Business is more confident. The challenge is that consumers are not feeling as confident as business.”

Pearce reported China’s domestic market was down only 28% year on year in July, saying: “Airlines in China are pricing to stimulate demand, less so in other markets.”

Yet he said: “Health concerns remain paramount. In Vietnam, the domestic market had fully recovered by July. But the reappearance of Covid in the last few weeks has seen the market push back down.”

Aviation Route Developments

Wizz Air announced three new winter routes, and a new base in Sicily. Chief executive Jozsef Varadi believes the airline’s recent network diversification will help the low-cost carrier ride out the Covid crisis. The central European budget carrier has established a number of new small operating bases across Europe since the pandemic, making it one of the most active players since travel restrictions began being lifted within Europe. The Times reports that analysts are concerned that its share price, which has risen up almost a fifth in the past month neglects the ‘recovery risks.’ Work travel is one of the “major reasons” that people in central and eastern Europe step on a plane and falling employment levels in Western Europe might depress demand. Meanwhile Oman Air, the Gulf country's national airline, has announced that it will resume international flights from October. Oman suspended all international flights on 29 March and land borders remain closed. 

TRAVEL AGENT AND TOUR OPERATORS

Thomas Cook

The Chinese company which bought Thomas Cook after its collapse last year is planning an imminent relaunch of the brand, reports Sky News. Fosun is drawing up plans to reinvent it as an online travel agent as soon as this month.

Sunny Heart Travel

A group of ex-Thomas Cook staff are launching a new online tour operator – Sunny Heart Travel - with future plans to sell through agents, reports TTG. The name is synonymous to Thomas Cook’s ‘sunny heart’ logo, which was with Thomas Cook from 2013 until its collapse in September 2019.

Sunny Heart Travel is privately-owned and based in Peterborough, where Thomas Cook had its head office and has pledged to take on “as many ex-Thomas Cook colleagues as possible” as it grows in size, particularly former product and marketing employees.

The company has already obtained its ATOL licence, initially for 1,000 passengers, and registered its name and logo under the Sunny Heart Travel brand. Its tagline will be ‘Great Holidays start with a Sunny Heart’.

Crystal Ski Holidays

TUI owned Crystal Ski Holidays has dropped its entire ski chalet programme for this winter's ski season, citing the 'impact of Covid-19'.

DESTINATION HEADLINES 

France sets daily record with almost 10,000 cases

Health authorities in France reported 9,843 new confirmed Covid-19 cases on Thursday, surpassing the previous daily record by almost 900. As in other countries experiencing a second wave, hospitalisation and death rates are much earlier than in April, but the new spike will delay tourism recovery efforts.

Lockdown extended in Melbourne by two weeks.

The Sunday Times reported that the lockdown in Melbourne, Australia’s second largest city, will be extended by two weeks after authorities said new cases were not falling quickly enough. The state still hopes to open borders by summer next year.

Terrorist attack in Tunisia Tourist hotspot

The Islamic State group (IS) says its fighters carried out a terrorist attack on Sunday in the tourist destination of Sousse, Tunisia that saw one security officer killed and another injured. Three attackers were shot dead and seven other suspects were detained. Tunisia had been a holiday hotspot for many years but suffered a major terrorist incident in 2017. While Covid-19 cases have remained low and the country had opened its borders to tourism in June this year post-lockdown, the FCO had previously advised against non-essential travel and it was not on the travel corridor list. This incident will further hamper tourism recovery from the UK.

Germans advised to take staycations this autumn

As Covid cases increase worldwide, Germans have been advised to take staycations in the coming autumn and winter rather than risk importing Covid-19 through foreign travel, particularly to ski resorts.

St Lucia reopens key tourist attractions

The Caribbean island of St Lucia has announced the restarting of its key tourist attractions, with some national parks and hiking trails open from this week. The country – which is included in the UK's travel corridor list – has recorded just 26 Covid-19 infections to date, and currently has no active cases.

ECONOMY

Consumer spending

UK consumer spending in August exceeded last year’s level for the first month since the coronavirus lockdown began, reports The Financial Times.  It was helped by a rebound for clothing, pubs and bars, but shops continued to struggle as more was bought online.

Consumer spending grew 0.2 per cent in August, compared with the same month last year, up from a 2.6 per cent contraction in July and the first expansion since February, according to data from Barclaycard. The payments company claims it tracks nearly half of the nation’s credit and debit card transactions.

UK Economy grows

On Friday 11 September, the BBC reported that the UK economy grew by 6.6% in July, according to the Office for National Statistics (ONS). But output remains far below pre-pandemic levels.

It is the third month in a row that the economy has expanded.

The ONS said that the UK "has still only recovered just over half of the lost output caused by the coronavirus".

It said education grew as some children returned to school, while activity in pubs, campsites and hairdressers boosted output.

 BREXIT

Round 8 of negotiations

This week –8-10 September - saw the eighth round of Brexit negotiation talks since the UK left the EU on 31 January 2020. The main sticking points are still fishing rights and competition regulation.

Both the UK and EU want the UK to have to have quota-free access to the EU, but, says the BBC, the UK wants the ability to support struggling companies that are vital to the national interest (Germany and France have propped up national airlines) and they want to be able to fund companies and sectors they are keen to promote, such as UK technology companies. The EU argues that they don’t want their companies undermined by British businesses propped up with public cash.

The BBC believes both sides still want a deal, but that there are still difficult compromises to be made by both, If there is no deal, ‘there will be big, profound economic change at a time when economies across Europe are having a very hard time,’ says Laura Keunssberg, political editor of the BBC. This in turn will take its toll on the fragile tourism economy.

Northern Ireland protocol

This week the UK government has been embroiled in controversy around Northern Ireland again. Last autumn, the UK and EU came to an arrangement to protect the peace process in Ireland called Northern Irish protocol. Details were kept deliberately vague.

The protocol said that Northern Ireland would officially be in the UK customs territory. But to keep its border open with EU member Ireland, it would still have to follow some of the EU customs code, which is logically not possible. The Northern Irish Secretary admitted to parliament that a new Internal Markets Bill announced this week would "ensure the integrity of the UK internal market," protect the peace process and hand power to Scotland and Wales. but would ‘break the law in a ‘specific and limited way,’

Critics say the move will damage the UK's international standing, and the head of the UK government’s legal department resigned. While not having direct impact on tourism at the moment, any issues concerning tensions around borders will harm consumer confidence in tourism to the area.

BALPA

The pilots union BALPA, reports Travelmole, have called on the Government to provide clarity for the aviation industry as the end of Britain's transition agreement with the EU approaches.

Union officials said it is 'still not clear' what agreements will be in place for the air travel industry between the UK and the EU from 1 January. It added that questions about pilot licences and employment rights also remain unanswered. 

The government is running paid-for campaigns in the UK media to raise awareness of the steps that businesses need to take as the EU transition phase comes to an end. LOTUS has been working on this with some clients and secured national media coverage.

Issues that the travel industry have to be across for themselves and their clients include the following:

• EHIC – the European Health Insurance Card. The Government had hoped to keep or adopt similar arrangements as part of the final withdrawal arrangements but this now appears unlikely, meaning the cost of travel insurance will probably rise. 
• Consumer protection rights. British airlines are likely to lobby the UK Government to water down consumer protection rights found in the EU Package Directive which has been enshrined in UK law.
• Mobile roaming charges. UK mobile users will no longer be automatically entitled to free roaming after December 31.
• Passports and visas. From 1 January 2020 British citizens will need at least 6 months validity on their travel documents to visit the EU except Ireland. There may also be changes to visa requirements and working visas
• Driving licenses . From 2021 British citizens will need an international driving permit (IDP) to drive in some EU countries. At the moment, all they need is their UK license.
• Freedom of movement will end and it is likely that British citizens will no longer be able to work in EU countries without a permit.
• Border controls. Passing through passport control may take longer due to increased checks
• From 2021 the Government says that we will be able to buy duty-free tobacco and alcohol when travelling to the EU but it is unclear exactly what the allowances will be and whether there will be changes to the duty paid arrangements.

ETOA – the European Tourism Association has also published guidance to help the travel industry prepare for change, post-transition period.