The UK’s newly announced inbound quarantine measures could cost package holiday operators up to £5 billion this year.
That was the stark assessment of Rajeev Shaunak, head of travel and tourism at accountancy firm MHA MacIntyre Hudson, who said the move would "paralyse" the travel industry at its typically most busy and profitable time.
Shaunak said the plans, announced on Sunday (10 May) by prime minister Boris Johnson, to make all passengers arriving into the UK subject to a 14-day quarantine "strikes down any prospect of an early recovery for the travel or aviation industries".
"For business and leisure travel, self-isolation for a period at least as long as a holiday itself, and in many cases twice as long, is a disaster," said Shaunak, who stressed that by omitting any further reference to reviewing the Foreign Office’s existing advisory against all non-essential travel worldwide, the government’s "stay home" message had become one of "don’t leave the country".
Shaunak said the measures would impact the travel and tourism sector during its busy summer peak where it tends to bank cash to weather the winter.
With Britons booking about 47 million overseas holidays a year, around 50% of which are Atol protected, Shaunak said the toll of the government’s coronavirus policies would be a "long-term blow" for travel and tourism.
"The changes are likely to see a number of failures by operators unable to cope," he said. "The Air Travel Trust, the fund behind the Atol scheme, has already been depleted badly by the collapse of Thomas Cook.
"Agents and operators need to prepare for a period of very little overseas travel and shore up their finances to find the best way to survive. The policy may be justified from a political and health perspective, but the consequences can’t be underestimated."
Shaunak said the problems would run into 2021 owing to the impact of two years’ pend up demand. "Many travellers, even before the notion of quarantine, didn’t expect holidays to depart before the start of the new school year in September, and delayed their plans as a result," said Shaunak.
"Summer holidays from June to September represent 70% of all overseas packages. The total value is around £7 billion a year, so package operators could lose somewhere between £4.5 billion and £5 billion worth of business for this year.
"At present 70%-75% are rebooking rather than looking for a refund, but businesses that followed Abta’s initial advice to issue refund credit notes, dated 31 July for when they could be converted to cash, could be in major difficulties.
"The industry is of course not just dependent on the UK government - many overseas governments have made it clear UK residents are likely to be some of the last to be invited to return."