Nearly half of Advantage members (44%) are still servicing Covid-19 debts, while just shy of a third (29%) said that high interest rates were impacting their businesses.
The consortium is seeking concessions from government to support travel’s rebound from the pandemic, with chancellor Jeremy Hunt poised to make his statement on Wednesday (6 March).
"The pandemic severely impacted both leisure and business travel, and many businesses were forced to use their own capital reserves to sustain their operations during the pandemic as they were continuing to operate at full capacity to serve customers cancelling and/or changing bookings," said Advantage.
"This meant travel agents couldn’t ‘shut up shop’ and take full advantage of government support, such as the furlough scheme. Although the industry has had a very strong recovery since the pandemic, businesses are still suffering from the dept incurred at the time alongside higher operating costs."
Advantage’s survey of its members ahead of the Budget revealed high interest rates, meanwhile, were exacerbating existing strains on cash flow and other "increased financial pressures".
"Cash flow can be a big challenge for travel agents, as they don’t see the profits they make from booking a trip until the trip takes place," said Advantage.
"In terms of challenges for the year ahead, Advantage members also reported concerns about staff recruitment, wage increases, the impact of the cost of living crisis, higher prices, high corporation tax and consumer confidence."
Challenges aside, the survey also highlighted efforts by members to invest in future proofing their businesses, with almost a quarter pledging to invest in people, 12% in online booking tools and 7% in new trading locations.
Julia Lo Bue-Said, chief executive of the Advantage Travel Partnership, said it was of "paramount importance" the government recognised travel’s £80 billion annual contribution to the UK economy and supported its growth.
"It’s really encouraging to see our members are looking to invest in their businesses this year but there is no doubt that they will need the support of the government as the industry navigates continued geopolitical challenges and economic uncertainty to ensure that this growth can take place," said Lo Bue-Said.
Lo Bue-Said added the Advantage-led UK Outbound Travel coalition, which includes Aito and Abtot among its partners, had submitted a number of policy requests to the Treasury ahead of the Budget.
These include reducing business rates and providing fresh financial support for travel business owners still struggling to pay back loans taken out during the pandemic.
