Travel businesses should not expect an immediate bounce back once coronavirus restrictions are lifted, a leading industry figure has warned.
Chris Photi, head of travel and leisure at accountants White Hart Associates, told the TTG Keep Your Business Alive II seminar: “My view is you will not be taking many bookings until well into the back end of the summer or the early autumn.”
Some businesses would not take any bookings until 2021, Photi predicted, adding cruising “would come back last” – not until 2021 – with domestic travel rebounding first. Although resorts with “closed environments” like holiday parks would be slower to bounce back, he said.
“I think most economic commentators think we are going to have a V-shaped recovery – I suspect it will not be a full V-shape,” Photi said.
However, he predicted demand would return provided the world had the virus under control.
He said the new “normal” meant fewer businesses in a reduced market as some fail to cope with the huge financial impact.
“If you wanted the perfect stress test in your business, coronavirus was it,” he said, warning some under-capitalised companies would have to consider staffing levels after 30 June, when government support is due to end. “Cash is king and it’s as simple as that,” Photi said.
He spoke of the difficulties of raising funds: “It’s difficult to get lenders and investors to invest at the moment because it’s simply like investing into a black hole.”
Some banks are making government-backed coronavirus business interruption loans and Photi warned of the need for them: “The CAA will be looking for enhancements to your liquidity at the next renewal.”
More positively, he said the crisis might encourage more new ways of remote working: “It will make staffing more efficient in certain respects” and could mean “a rationalisation of premises”.
He added: “Provided you have sufficient cash to trade into an upturn, you will, I’m sure, thrive when bounce-back occurs.”