02
April
2020
|
16:12
Europe/London

LOTUS Coronavirus update (31.03)

GOVERNMENT

Government Update: But No Change to Package Travel Regulations

Last night the Government announced that it was taking a twin track approach to repatriating Britons, firstly urging airlines, which are still operating routes, to offer flexible changes between carriers and for them to provide up to date information when the situation changes. Secondly, where commercial routes no longer exist, the UK Government will provide £75 million to enable special charter flights – operated by Virgin Atlantic, easyJet, Jet2 and Titan Airways. These carriers have signed a memorandum of understanding. BA is also set to help – and the door is open to other carriers too.

The FCO has stepped up the resource for their call-centre

The Refund Issue

Whilst last night’s Covid-19 Government press briefing had a travel focus, it didn’t in any way address the business-critical issue of announcing that the UK will follow the EU Commission’s amendment of the Package Travel Directive to relax the refund legislation.

This follows The Times report saying that a decision is expected in the ‘coming days’. Yet the Department for Business, Energy and Industrial Strategy did not respond to a request for comment. This also comes as ABTA reiterates again today how they are pressuring all Government Departments and the Prime Minister to take immediate action to prevent catastrophic damage to the travel industry. Mark Tanzer, CEO of ABTA, underlined this message again in a video address to members which also described the many other issues he is asking the Government to act on. These include asking the Government to force airlines to provide refunds and a request for supportive action to prevent harsh measures being taken by merchant acquirers.

The Times had reported that operators are facing delays obtaining refunds from airlines and hotels who are also reeling from the collapse in bookings.

In an interview with Travel Weekly, Derek Jones, CEO of Der Touristik and Member of ABTA’s Board, said that it was a hard decision for the Government. They are facing either losing the trust of the consumer or losing the jobs and the economic value of the travel sector. Jones urged the Government to follow the Danish government’s lead to fund refunds, so that both customers and companies would get what they need.

MPs ask chancellor to support airlines

A group of 38 MPs in the UK has written to chancellor Rishi Sunak urging him to offer support for airlines suffering financially from the coronavirus outbreak. The requests are not for a bail out but are requests to support shared costs such as air traffic control, CAA costs and business rates.

Many carriers have introduced severe cuts to their flights, while others have completely grounded their aircraft until further notice. Today, BA announced that it is suspending all remaining flights to and from Gatwick, ending the last scheduled flights by UK carriers from the airport during the coronavirus pandemic and Gatwick is shutting one of its terminals from today.

Baggage handlers ask for support

Many media outlets are reporting that the four leading companies which manage ground operations at UK airports are also facing collapse.

Swissport, WFS, Dnata and Menzies who operate baggage services, plane refuelling and cleaning, at UK airports have written to the chancellor for support.

Holiday allowance can be rolled into next two years

The Government has announced that holiday allowance not taken because of the coronavirus crisis can be carried over into the next two years.

Workers will be able to roll over up to four weeks of their annual leave following a change in the regulations.

Typically, any remaining annual leave out of the statutory 28 days is lost if it does not get used up.

Insolvency rules changed to help ‘firms weather the storm’

TTG reported that changes to UK insolvency rules, to protect businesses struggling with the financial impact of the coronavirus from having to file for bankruptcy, have been announced by the government. The move, announced by the Government at the weekend, will allow directors of companies to pay staff and suppliers even if there are fears the company could become insolvent and give businesses more time to pay off debts while continuing to trade.

‘How to Get Your Cruise Fix at Home During the Coronavirus Lockdown’ – this is very much in the virtual visits /armchair travel style we keep seeing.

CONSUMER SENTIMENT

Surge in searches for Spain

US-based travel marketing agency Sojern’s weekly update reported on 30.3.2020 that:

  • It will take some time for the travel industry to recover and also for consumer confidence to return. We expect recovery to start domestically with travellers opting to travel closer to home. This is certainly the case for European countries including France (17%), Italy (103%) and the UK (60%) which all show a very early indication of year-over-year increases in domestic travel searches for January 2021.

  • We see a notable spike in travel searches for January 2021 from the UK to Spain with a year-over-year increase of 1626%.

  • From the data we see an early upward trend of travel searches from October this year onwards to Spain, France and even domestic travel within the UK.

  • Whilst actual travel bookings are a stronger sign of consumer confidence, travel searches show a very early sign of travel intent.

  • Regional travel bookings made in the last 14 days from Europe to the UK has seen an upward trend from November this year rising to a significant 724% above average year-over-year increase for Western European travel bookings. This could potentially be a result of some low-cost carriers unveiling winter 2021-2021 sales and summer 2021 programmes early as well as releasing more flexible cancellation and booking policies.

GfK: Consumer Confidence fallen in March

Reuters reports that on Tuesday, market research firm GfK said its index of consumer confidence — which was also conducted in the first half of March — slipped to -9 from -7 in February, which had been its strongest level since August 2018.

“While we have a long way to drop before we match the devastating numbers seen in July 2008 when the Overall Index Score crashed to -39 points, lockdown Britain can only expect further deterioration,” Joe Staton, GfK’s client strategy director, said.

Gfk reported a sharp, eight-point fall in willingness of consumers to make major purchases.

Consumer Insights from GfK

GfK has collated business intelligence, including reports, insights and webinars, relating to the impact of the coronavirus pandemic, free of charge in a resource centre focused on breaking trends, supply chains, point of sales, consumer behaviour and consumer sentiment. There was no specific travel-related or package holiday intelligence though. https://insights.gfk.com/how-to-navigate-external-shocks-like-covid-19-and-come-out-on-top

Mail on Sunday Consumer poll

A consumer poll by Deltapoll which interviewed 1545 British adults last week for The Mail on Sunday made a number of conclusions including:

What do you think will happen to working life after the crisis?

- 57% think that working life will change for ever.

- 12% don’t know

- 31% say that it will get back to how it was before

What do you think will happen to international travel after the crisis?

- 58% said that travel won’t be the same again

- 12% don’t know

- 30% said that travel would be back to how it was before.

After the outbreak is over, do you expect life to return to normal?

- Yes: 26%

- No: 63%

Consumer confidence index shows fears of economic depression

The Times has reported on a YouGov and Centre for Economics and Business Research survey which found that households expect Britain to fall into recession this year, with some even predicting a more severe depression, as parts of the economy remain grounded.

Concerns about economic growth, rising unemployment and impending business failures have knocked consumer confidence to its weakest level since 2013, according to an index published by YouGov and the Centre for Economics and Business Research.

The index fell by 4.2 points to 103.3, the biggest monthly fall since the wake of the Brexit referendum in July 2016 and the lowest level since 2013. It is only three points above the 100 mark separating optimism from pessimism.

Project restart

Travel Weekly’s interview with Derek Jones from Der Touristik (Kuoni) revealed that the company believes that there will be a slow recovery to the travel industry. ‘It won’t happen overnight as money for booked travel won’t come back immediately,’ Jones said. He also commented that planning needed to take into consideration of how ‘the gates will open’. Not every country will open their borders simultaneously and that while everyone might be desperate for a holiday, many could be nervous about travelling.

He also said that within the crisis there was an opportunity to really focus on product and possibly rebuild the industry differently to reflect requirements of customers of the future.

FINANCIAL

Markets

The Telegraph is reporting that as China’s factories show signs of recovery, the FTSE has rallied. European shares rise for a second day following shaky start on Monday. This has also had a positive impact on travel companies’ shares.

 

 

 

 

 

 

 

Lloyds: Business Confidence slides

Bloomberg reports today that UK business confidence slumped in March as the coronavirus pandemic began to make its mark on companies, according to Lloyds Banking Group Plc.

About three quarters of firms said they were already affected by the outbreak, or expected to be - a level that likely underestimates the scope of the fallout, as the survey of 1,200 companies closed a week before the country was put into lockdown in an attempt to slow the rate of infection.

Measures of economic optimism and hiring intentions declined, while sentiment was especially hard hit in the retail and services industries.

GDP flat for Q4 2019

FX Street reports that the UK’s GDP in the fourth quarter of 2019 was flat between October and December.

TUI received loan

Following German government approval of TUI to receive a bridging loan of EUR 1.8 billion (USD 1.98 billion) from the KfW, the holiday group has announced that it will furlough the vast majority of its 11,000-strong workforce in the UK, including more than 4,500 retail agents.

On The Beach: Trust Accounts should be the way that all travel businesses should operate

As the share prices for On The Beach have fallen by a third, Simon Cooper, founder gave an interview to The Telegraph and outlined the strengths of their business model. As a travel broker they have few fixed costs and their digital marketing can be flexed organically – if there are no searches, there are no costs. Cooper also outlined how OTB cut offline marketing spend in February when China shut down. With regards to refunds OTB has a trust account which means customers’ money is ringfenced and the company cannot draw on any customer funds until the travel services are honoured. On the Beach can seamlessly refund customers who have had their trips cancelled.

Travelport Creates Covid-19 Response hub

Travelport has set up an airline policy tracker, IATA data analysis from previous outbreaks and tips for agencies to maximise their existing resources. The tracker is designed for agents, but the service is open to all and can be found here: https://marketing.cloud.travelport.com/COVID-19-response

Wishlist surge

The Sun reports that Teletext has seen more people using its online wishlist function and searching for departure dates later in the year. Consumers have also been looking at further-flung dream destinations with the US and Caribbean top of the dream destinations taking up 22 per cent and 21 per cent of all long-haul holiday searches. UAE is third. Of short-haul destinations the Canary Islands tops with 22 per cent, followed by 15 per cent looking at mainland Spain.

Is this the moment that virtual reality travel takes off?

The Financial Times’ Travel section carried a feature on the boost that the pandemic has given to Virtual Reality projects.

“None of the virtual travel companies have really gained much traction,” says Tipatat Chennavasin, a Silicon Valley-based investor at the Venture Reality Fund. But now, because of Covid-19 and a worldwide grounding of planes, the travel industry has little option but to embrace alternative forms of escape — even if the ultimate plan remains to lure people back out into the real world once the lockdown is lifted.”

Tourist boards in places such as Austria and Switzerland have rapidly overhauled their websites to offer interactive Alpine panoramas and 360-degree videos of hiking trails. Urban parks in cities such as New York and London, as well as the wide-open spaces of Yosemite, Yellowstone and the Colorado Rockies, offer Google Street View-style “virtual tours”. Some offer narration or the sounds of nature to add to the ambience. Meanwhile, a new breed of three-dimensional maps, such as Fatmap, allows hikers, runners, cyclists and skiers to while away their confinement by planning or retracing outdoor adventures in unprecedented detail.

#Caribbean Dreaming

The Caribbean Tourism Organisation is launching #caribbeandreaming campaign in April to run across all the CTO’s digital platforms during the month to motivate both trade and consumers to reminisce on past Caribbean experiences or share their future dreams to travel to the Caribbean. There will be no costs to participate.

Rebound Consulting

Three travel industry veterans have joined forces to create a free online web resource to advise travel companies how to “survive today, rebound later”.

Reboundconsulting.co.uk is a collaboration between Holiday Taxis co-founder and former On Holiday Group chief operating officer, Steve Endacott, former Thomas Cook head of tour operating and Tui chief financial officer, Will Waggott, and Seamus Conlon, former managing director of Airtours Holidays and TV Travel Shop and non-executive director of Cruise.co.uk.

China

Breaking Travel News today reported that top tourist attractions in Shanghai have been forced to close shortly after reopening as China continues to take preventative measures against the coronavirus pandemic.

Travelogix creates free insights platform

UK travel data analyst Travelogix has refocused its technology development resources to creating a free COVID-19 outbreak insights platform.

The firm says the service will provide its travel management company clients with critical tools, information and communications services to help maintain operations during the crisis.

Adara Traveller Trends Tracker

Travel marketing data analyst ADARA has developed a Traveller Trends Tracker to help brands adapt to the fast-changing market as the coronavirus pandemic spreads.

The tracker taps into ADARA’s real-time travel data that allows firms to track travel-related consumer behaviour and identify key trends. ADARA says it will update the data frequently.

ADARA said: “This information will help travel marketers activate the most informed marketing strategies based on the most recent consumer travel activities.” Access the tracker.

CRUISE

Cruise with Confidence

Royal Caribbean Group is extending a ‘cruise with confidence’ cancellation policy until 1 September 2020 while sailings are disrupted due to the coronavirus pandemic.

The move aims to “address expanding global travel restrictions and provide peace of mind in guest travel planning”.

The updated policy enhances planning flexibility by allowing cancellations up to 48 hours prior to sailing for any reason.

Fred Olsen: We are still here for you

Staff at the Fred Olsen cruise line working from home have issued images of them

Guest Services, Reservations and Trade Support call centre teams to reassure customers and the trade that “We are still here for you”.

“People like dealing with people, and we know that our guests like to have that point of contact with our team here, perhaps now more than ever,” said Peter Deer, managing director at Fred Olsen.

He said the pictures “go some way to show [they are] real and caring”, adding: “Behind every call you make to us is the friendly face of one of our team members, who will be more than happy to talk through any questions you may have.”

Telegraph writers’ Love Letters to Cruise

The Telegraph cruise writers have put together a collection of ‘love letters’ to the cruise industry about their treasured memories, unique experience and passion for water-borne adventures.

Virtual Cruise Fix

Dave Monk at The Telegraph has compiled a group of TV programmes, films, social media, and books for cruise fans to relive their cruise memories.

#Wewillbeback

Carnival Cruise Ship Fantasy anchored off Florida hit headlines and ignited another travel-positive hashtag on digital platforms with #wewillbeback and a heart emoji written in lights from the ship’s cabins.

RAIL

Railways to go electric

The Times reported that a new programme to convert Britain’s railways to electric power will be rolled out after the government acknowledged that greenhouse gases from trains will rise by a fifth in the next three decades.

Less than half of the rail network is electrified and about 2,500 trains run on diesel, despite a government commitment to eradicate them by 2040. There has been criticism of the slow pace of electrification, with the programme to convert the Great Western mainline running years behind schedule and three times over budget.

First Great Western has Franchise Extended

The Times reports that the Government has extended its agreement with First Great Western main line between London and the southwest for at least another three years. First’s existing franchise agreement was due to run out tonight.

The franchise is one of only two in Britain to have remained with the same operator since the railways were privatised in the 90s. While all Britain’s train companies are operating on six-month emergency contracts through the pandemic it is assumed that GWR will revert to a normal profit-making franchise when railways return to normal.