LOTUS CORONAVIRUS UPDATE (16.07)

AND THEY’RE OFF…TRAVEL RESTRICTIONS EASE

Quarantine free travel for travellers arriving into the UK became possible on Friday 10 July.

The announcement of travel corridors on 3 July and the lifting of FCO advice for Brits to travel to major overseas destinations on 10 July triggered an increase in enquiries and leisure bookings but reports in both TTG and Travel Weekly suggest that bookings for summer 2020 remain muted. Trade sources labelled the air corridor policies confusing and this is still having an impact on consumer confidence.

In addition, the trade papers reported that choice of destination is still limited; airlines are offering limited routes; hotels are not all open and travel suppliers are limiting their marketing and promotional campaigns for this summer. As a result, the majority of bookings are for 2021.

However, social media may yet play an important part in influencing future bookings.

CONSUMER SENTIMENT

YouGov

Travel Weekly reported that a YouGov poll this week suggested that 20% of UK adults would feel safe flying – with 64% saying they would not. Andrew Flintham, TUI UK Chief Executive said that there are those customers who have been waiting to book and those for whom travelling is not on the cards – and there are many in between. “We want customers to make the decision that is right for them,” he said. The main questions being posed to TUI are: “Is it safe” and “What is open?”.  

Covid-19 Barometer

Despite travel restrictions being lifted across Europe, most Britons don't feel confident enough to travel abroad, reports The Daily Telegraph. According to findings by the Toluna and Harris Interactive Covid-19 Barometer, just 12 per cent are planning an overseas trip in the next few months, while another 17 per cent are preparing for a UK staycation this summer.

Almost 68 per cent of respondents said they were put off the idea of travel by worries over a second wave of coronavirus infections.

Solo travel popular as touring recovers

Research by Cox & Kings suggests solo travel could be among the first segments to come back as the touring sector starts to recover - about a quarter of recent bookings had been made by customers travelling alone. The tour operator said that the solo traveller sector was robust and more likely to travel sooner than families with children.

REFUNDS

On Wednesday 16 July, Which? announced that it had called on the Civil Aviation Authority to take “urgent enforcement action” against airlines failing to pay refunds within seven days after analysing thousands of complaints made since the Covid-19 crisis hit.

The consumer group has compiled a dossier of more than 14,000 refund complaints from customers whose flights have been cancelled as a result of the coronavirus and submitted them via its online tool since 22 May.

Looking at 12,600 of the complaints, it estimates the refund claims are worth a combined £5.6 million and that customers have spent a collective 52,000 hours – almost six years – chasing airlines for their money, an average of £446.40.

Airlines say the unprecedented volume of complaints has led to the delays, but Which? insists they are “openly breaking the law” under the Denied Boarding Regulations.

Derek Jones, CEO of Der Touristik, in an opinion piece in Travel Weekly said: “There’s an emotional objection to supporting the travel industry arising from the travel industry’s failure to adequately care for and refund customers whose holidays were cancelled as a result of Covid-19.

“This week, as Europe tentatively opens up once more to UK arrivals, we’ve seen more evidence that customers remain nervous about booking – convinced that if there’s another spike in Covid-19 they may once again be left out of pocket.

“The rebuilding of trust and confidence will be a slow process. The way the industry has handled this crisis will inevitably lead to lasting changes in the way travel businesses are financially structured, but for now, customers don’t just need to know that their destination is safe, they need to know that their money is safe too.”

A shift towards trust accounts for travel trade

Travel Weekly reports that travel firms are under increasing pressure from credit card companies and shareholders to use trusts to protect customer money. More companies are considering moving to a trust model in the wake of the holiday refunds controversy due to Covid-19, agreed a panel of travel legal experts.

Daniel Landen, managing director of Protected Trust Services, said the reason was not just Covid-19, “it’s Thomas Cook, the ash cloud, 9/11, the financial crash and Monarch.”

ABTA has urged supplier members to refund customers where they are required to do so by law following a warning from the Competitions and Markets Authority of potential enforcement action.

AVIATION

Virgin Atlantic lands rescue deal

On Monday, Virgin Atlantic sealed a deal with three credit-card payment processors, which allowed the company to progress recapitalisation with a US hedge fund to inject almost £200 million into the company

 Sir Richard Branson, Virgin’s founder, will put in a similar amount, raised from the sale of shares in Virgin Galactic, his space venture.

The Guardian and The Times both provided opinions that Rishi Sunak was correct in denying Richard Branson’s request for a £500 million loan from public coffers for Virgin Atlantic in March. “The happy story contains several corona lessons”, says Alistair Osborne of The Times, “not least what a billionaire can achieve when he puts his hand in his pocket” – but the team at Virgin Atlantic have also come up with a refinancing deal delivering £1.2 billion over the next 18 months. “How long for, is a moot point for a carrier that hasn’t made a profit since 2016.”

The five-year business plan involves cutting in excess of 3,500 staff.

EVENTS SECTOR

Simon Parker from show organiser Informa and representing the Association of Exhibition Organisers was interviewed on BBC Radio 4’s Today programme on Monday 13 July and reported that the UK government has not yet provided a date as to when the events industry can re-open.

He said that this was putting jobs and livelihoods at risk and was mysterious as the sector has been in constructive dialogue with the government who together have developed health and safety protocols which would allow the industry to restart and provide confidence to both government and delegates.

Already countries such as Germany are staging exhibitions and France has a ‘go’ date. Parker said that the sector desperately needed a restart date as they believe that 30,000 people are at risk of losing their jobs – and this represents 60% of the events supply chain. The events industry also serves the hospitality industry – hotels, bars and pubs, which rely on events for survival.

CRUISE & FERRIES

Change to FCO Advice

On Thursday 16 July, the Foreign Office updated its advice against cruise ship travel to confirm that it relates to international travel on a “sea-going” cruise ship.

The FCO had previously confirmed its advice applied to all forms of cruising, but the updated guidance paves the way for UK travellers to return to river cruising.

Brittany Ferries

Brittany Ferries has begun to take bookings for 2021 to kickstart its recovery. The company, which recommenced passenger services on 29 June, said it was encouraging holidaymakers to book as soon as possible to ensure the best choice of sailing, lowest fare and flexible ticket option.

DESTINATIONS

UK

Nicola Sturgeon, First Minister of Scotland, in an ITV interview, has once again refused to rule out the possibility that the English, Welsh and Northern Irish will have to quarantine when visiting Scotland.

Bookings

The I newspaper reported that whilst much of England’s hospitality industry has experienced a surge in bookings with campsites busy and regions such as Devon, Cornwall and North Yorkshire proving to be popular, other areas and cities, especially those who rely on inbound tourism are struggling.

Attractions opening but audio tours over

The Natural History Museum, Science Museum and V&A will begin staggered openings from 5 August with reduced opening hours and about 20 per cent of normal capacity. Headphones on audio tours are deemed too high risk, and won’t be returning for now.

The Times reports that thousands of families will miss out on camping trips in some of the most beautiful woods this summer after Forestry England and its campsite operator failed to ensure that sites reopened.

Fifteen campsites in publicly owned woods in England and Scotland run by Camping in the Forest will remain closed for the whole season despite camping being allowed to resume.

SOS London

The Evening Standard reports that bosses representing thousands of London attractions, restaurants and hotels and event organisers have written to the Prime Minister to urge him to help avert a huge tourism crisis with investment and a ‘clear strategic plan’ to welcome back visitors.

Sunny Jouhal, general manager of the lastminute.com London Eye, and one of the signatories of the letter, said: “Tourism in the capital is in crisis due to three months of London effectively being closed, even with the ability for some businesses to reopen, the industry is already half-way through its peak season making it impossible for many across the sector to recover.

“We’re launching SOS London with a wide selection of industry partners to take collective action and ensure the London tourism sector survives.

“London is practically empty and there is no concrete plan for recovery in place. If the UK Government does not act now, we will see one of the biggest missed opportunities on Britain’s road to recovery and prosperity.”

ALVA

Several stately homes in the UK attracted record visitors last year, thanks in part to the hosting of TV shows, celebrity weddings and festivals, says The Times. Outdoor spaces have opened quickly. Blenheim Palace has hosted drive-in films. The Association of Leading Visitor Attractions said that the most popular attraction in Britain in 2019 was the British Museum, followed by Tate Modern, the National Gallery, the Natural History Museum, the South Bank Centre and the V&A Museum. Outside London were the National Museum of Scotland, Edinburgh Castle and Chester Zoo.

Spain

New lockdown measures for the city of Lleida and seven towns in Catalonia are due to come into force.

The Balearic Islands have ramped their rules on face masks, now insisting they are worn “in all places where it is not possible to maintain a safe distance.” The government’s rule extends to both indoor and outdoor spaces.

This week authorities in Mallorca closed three streets after video footage showed German and British tourists in packed bars without face masks. Spain recorded the highest number of infections in 24 hours since ending its state of emergency. The islands’ government said the move aims to prevent antisocial behaviour which could jeopardise what has been achieved in terms of a safe restart for the tourism sector.

Meanwhile The Mirror online reports that Brits feel safer in Spain than they do in the UK.

Republic of Ireland

The Irish government has delayed its plan to ease lockdown restrictions until 10 August following a rise in the number of Covid-19 cases, meaning pubs, nightclubs and casinos will have to remain closed for the time being. 

France

After more than four months of closure, Disneyland Paris reopened to the public on Wednesday 15 July. The Eiffel Tower, is now also fully open.

Greece

Greece opened its borders for British travellers with direct flights between the two countries resuming on Wednesday 15 July.

In response to questions about a spike in cases in Greece, Greek Tourism Minister Harry Theoharis said: “We are monitoring the situation, which is currently stable. We are looking at the numbers and the procedures that we have put in place and are very happy with the results. But that doesn’t mean that we’re not vigilant and that doesn’t mean that we don’t continue to monitor the situation… If anything, we will take targeted measures.” 

Hong Kong

Disneyland has been closed just a month after it reopened as it faces a new wave with 50 cases reported in one day.

Jordan

Jordan will allow the return of commercial flights in August, having been one of the first countries in the Middle East to close its borders at the pandemic's outset.

Maldives

A ban on entry into the Maldives for anyone who has left or transited the UK in the previous 14 days has been lifted, although travellers returning to the UK will still be expected to self-isolate for 14 days.

Confirmation on the lifting of the ban came on Wednesday 15 July from the Foreign Office as resorts reopened for tourists.

Guest houses open this month for local residents on Covid-19 free islands and will be opened for tourists from 1 August.

However, a public health emergency remains in place in the Indian Ocean nation until 7 August.

The FCO said in updated travel advice: “Travel to the greater Male region from islands without confirmed cases of Covid-19 is now allowed. When travelling from Male to other islands, there is a mandatory 14-day quarantine upon arrival at your destination.

“There are no travel restrictions between islands without Covid-19 cases. Travel to and from islands with confirmed Covid-19 cases is restricted.

“Movement between resorts and islands will be permitted without quarantine requirements from 1 August when guest houses for tourists are due to open.”

Caribbean

The countries on the UK travel corridor list has been expanded to include the Turks and Caicos Islands, which officially reopens its borders to tourism on 22 July, but with visitors required to bring proof of a recent negative coronavirus test; British Virgin Islands, Anguilla, Bermuda and Montserrat.

Barbados

The island of Barbados is doing away with visas and work permits. The Caribbean country is opening up to tourists for long stays in an attempt to boost the economy.

The new incentive will allow visitors to stay for up to a year while continuing their employment online. The move comes after the pandemic saw many companies successfully operate virtually. Barbados is banking on people wanting to swap their sedentary home office life to one where they can work in front of a beach.

LUXURY

Speaking to CNBC, Melinda Stevens, Editor of Conde Nast Traveller UK said that she believed that the tourism industry will continue to be unpredictable for a very long time. However, even though the ability for many people may not be there in the short term, she believed that the desire to travel and experience and connect with other cultures is still extremely strong. With CNTraveller, which provides excellent writing and photography, they have seen subscriptions increase by 150% during lockdown, and she believed that this is because the magazine can deliver an aesthetic view of the world that is ‘other’ and inspires wanderlust.

The interview also discusses how Stevens believes that they have a responsibility in the travelling community to look after people’s livelihoods that depend on travel and how they will support sustainability pioneers going forward.

BREXIT

On Monday 13 July, the UK government launched a new public information campaign to prepare the country for the end of the Brexit transition period with warnings over holidays, taking pets abroad and data roaming charges. The UK’s new ‘let’s get going’ adverts will be launched on television, radio and online, with information also sent to people via text message. It is hoped the campaign will help businesses and individuals prepare for the end of the transition period on 31 December when the UK leaves the single market and customs union.

The Daily Telegraph says that for travellers it seems likely that higher costs and more red tape will be unavoidable and they outline what is known so far.  

ECONOMY

No V-shaped recovery yet.

The British economy returned to growth in May but is still just three quarters of the size it was before the crisis reports The Times.

The Office of National Statistics showed that output rose by only 1.8 per cent in May rather than the rebound of 5.5% that had been expected.

The economy contracted by almost 19.1 per cent in the three months to May (with most of the damage felt in April). The economy is now 24.5 per cent smaller than it was in February.

An economist at Capital Economics warned that a nascent recovery could peter out in the second half of this year if unemployment rises and government support fades.

In addition, borrowing this year will hit a peacetime high, at £370 billion, once last week’s jobs bonuses, VAT cuts and “eat out to help out” voucher schemes are included.

The overall recovery has been stifled by the sluggish return in the service sector, as construction and manufacturing have both seen decent recoveries, says David Smith in The Times and whilst this year’s falls in GDP look unprecedented, the speed of recovery may well be different to past recessions – it maybe the deepest recession in the modern era, but perhaps also the shortest.

Sharp growth in 2021?

The OBR, in its latest fiscal sustainability report set out three scenarios for recovery. All three envisage a hit to GDP this year, but for next year, the most optimistic prediction is for growth of 14.5%, and the most pessimistic is a 4.6% recovery, which would lead to permanent economic scarring. Even in a more realistic scenario, says Smith, sectors such as hospitality will struggle to employ so many people again and government debt is unsustainable on a long-term basis.

Four million people could be unemployed by the end of the year, warns fiscal watchdog According to The Daily Telegraph, the Office for Budget Responsibility has warned that at the end of 2020, over four million people could be out of work, as the furlough scheme supported by taxpayers closes down and employers remove staff whose jobs were ruined by lockdown.

British Chamber of Commerce: a third will axe jobs in Q3

Nearly a third of UK firms plan to lay off staff over the next three months says The British Chamber of Commerce’s quarterly recruitment outlook. The survey done in conjunction with Totaljobs revealed that 29 per cent of 7,400 firms surveyed expect to axe jobs over the third quarter. This is a record high for the study.

The report also found that 28 per cent of firms had already cut roles between April and June. The number of workers on UK company payrolls fell by 649,000 between March and June, official figures indicate.

The number of people claiming work-related benefits - including the unemployed - was 2.6 million.

EXPANSIONS AND LOSSES

• JG Travel has acquired the brand and database of National Holidays and is planning its first programme of UK coach tours for 2021
• Hays Travel is to open an office in Glasgow to support its growing in-house tour operation
• Holiday Extras is to cut 330 jobs as part of its two-year recovery plan post-pandemic
• Fleetway Travel has gone into administration with 6,500 forward bookings. The operator had significant US business
• Emirates is planning to cut up to 9,000 jobs

…AND FINALLY

 #Wear2Care

The WTTC has launched a campaign asking governments to enforce the wearing of masks for all travel. As part of the drive, it wants travellers to share #wear2care pictures of themselves wearing masks on their trips