It’s going to be different this year. After nearly two years of restrictions, consumers will need reassuring like never before; so expect the "book with confidence" message to come from Abta and the CAA loud and clear.
It would have been nice to have heard something similar from the prime minister, but at least the Atol and Abta logos are something the average person in the street finds trustworthy.
Booking a summer holiday six months in advance is not a financial gamble thanks to Atol and the Competition and Markets Authority (CMA) crackdown on operators that were tardy with refunds. Fingers crossed 2022 really will be the one when we see travel return.
With consumers having missed two summers’ worth of holidays, peaks – whenever that is – should see more money sloshing around the market than usual.
Another positive is consumers seem to be getting the message that operators and airlines aren’t taking risks, so less capacity really does mean reduced choice unless you book early.
What’s more, the obstacle to family bookings – such as the requirement by many countries for a vaccination certificate for children – will be overcome once the NHS app includes the 12-15 age group. Many adults will be triple- jabbed, too, which is another plus.
But then there’s testing, with the combined PCR and lateral flow test kit for a typical family costing £300-£400. If that persists into summer, then price-wise, that’s like taking another adult along with you for a week in the Med. Something must be done about the price, because we all know what the consequences for the travel industry will be otherwise.
If you’re sceptical about the need for action, look at some figures. An excellent investigation by Private Eye found one test firm’s profits had jumped from £1.3 million pre-Covid to £178 million in just the first period of the pandemic. Another went from £12 million to £50 million and one specialising in lateral flow tests turned a £700,000 loss into a £45.7 million profit.
The government was quick to trumpet the triumph of private enterprise in securing test providers, but this looks like a goldrush – and one that’s come at the travel industry’s expense.
Compare those figures to the enormous losses posted by easyJet, Tui and Jet2, and you can see something is wrong. Even in normal years, pharmacy companies make big profit margins. In normal years, travel companies don’t – a 10% margin is seen as a great victory, with single figures more common.
‘Critical time’
Before we know it, we will be entering our third year of Covid. Banks are losing patience, and if this goes on much longer, many more travel firms really will go under.
Test providers have had a good war and maybe it’s now time they gave something back. Profiteering, like tax avoidance, is not illegal – but there must come a point where enough is enough. Production has been ramped up, so costs must have come down; but prices haven’t. That needs to change.
We are still to hear from the CMA’s ongoing investigation into test providers, the results of which may not come soon enough for peaks. The chancellor has again declined sector-specific support for travel, so the CMA is the industry’s last hope for a bookings boost to ensure peaks are successful and operators and airlines have cash in the bank.
Whenever lockdown is mentioned on the news, it’s always the effects on hospitality that receives the most attention, but action to boost forward travel bookings is needed at this critical time.
The UK travel industry is one of the world’s most successful and admired. To have its recovery threatened by government inaction and test firms cashing in is just plain wrong.
