The majority of travel firms are surviving but in hibernation and only 1% see a recovery, new research has found.
The Summit Advisory Travel Business Barometer, produced by accountancy firm Elman Wall, found 45.2% of clients said they were “surviving but hibernating” and 37.8% said they were also surviving but planned more cost-cutting.
Data for September and October was collated out just before the chancellor’s last statement. It found only 1% said they were recovering, while 5% said they were “surviving but stable” and 2% “struggling to recover”.
“It’s all about controlling what you can here when the top line is so unpredictable,” said Deborah Potts, Summit Advisory director.
More optimistically, the majority of firms surveyed predicted they would get through the crisis, with 37.8% saying they would recover and grow independently and 32.6% saying only they would recover and survive. Only 2% were planning to close.
Just over half – 52.6% - were more pessimistic than at the start of lockdown and 20% were more optimistic. Among the firms surveyed, 81% had furloughed staff but only 36.8% had taken some form of state aid including the CBILS loan facility.
“We were somewhat surprised how few had accessed CIBLS or the Bounce Back loan,” said Potts, but added: “More and more have been talking about accessing them over the last couple of weeks.” She said the loans had very low interest rates and generous repayment terms.
The research also found 19% were looking at accessing cash and capital beyond the government scheme, although Potts added: “Some is actually for acquisitions.”
On the employee side, nearly 18% of firms had not reduced their headcount, but the majority had cut staff numbers, with 15.7% having cut 50-60% of their posts and 12.6% shedding 60-70%.
Just over a quarter said they did not expect 2019 booking levels to return until summer 2022, with only 20% saying they would return to this level by next summer. Similarly, 31.5% said they did not expect 2019 departure levels to return until summer 2022.