One would have hoped Sunak included the UK travel industry in his definition of “tourism”. He certainly should have – ONS data last month showed turnover among travel and tourism businesses as a whole dipped to 26% of pre-pandemic (February) levels in May 2020.
Among these, the ONS noted that accommodation and travel agency businesses were hardest hit, with turnover falling to 9.3% of February levels in May and peaking at only just over 60% in August when some travel resumed.
And yet, whether the chancellor remains ignorant of the challenges facing the UK travel industry or just plain uninterested, travel has once again been left out in the cold.
Sunak acknowledged in today’s Budget that “150,000 [tourism and hospitality] businesses employing more than 2.4 million people need our support”. He followed with a range of measures to help these businesses, most notably with regards to VAT – the 5% reduced rate of VAT has been extended for six months, to be followed by a 12.5% interim rate before returning to the 20% rate in April 2022.
It’s a fantastic measure for hospitality and domestic tourism businesses that have been ravaged by this pandemic.
But where, Mr Sunak, was the dedicated support for the thousands of people working in the UK travel industry whose businesses have also been closed for almost 12 months and who also “need our support”?
It’s a point certainly recognised by the Scottish government. In January it unveiled details of a financial support package for travel agents, with agents able to apply for grants of up to £25,000, depending on their rateable value. In total, £7.3 million will be made available to travel agents in Scotland (the pot will also be shared by brewers and indoor football centres).
Yes, there are flaws with the Scottish government’s plan – numerous homeworkers and self-employed travel professionals will not qualify for the support. But the fact the travel industry – and the immense pressure it is under – has been recognised at all speaks volumes.
Westminster’s response by contrast, is shameful.
Thankfully some of the wider business support measures announced today will provide relief for some travel businesses. High street agents should benefit from the Restart Grant in April, designed to “help businesses reopen and get going again”, with non-essential retail businesses qualifying for grants of up to £6,000 per premises.
Meanwhile a new "Recovery Loan Scheme" will continue from where bounceback loan and CBILS schemes left off, with businesses of any size eligible to apply for loans from between £25,000 to £10 million through to the end of the year, with the government providing an 80% guarantee to lenders.
The ongoing business rates holiday will also continue for the first three months of the financial year through to the end of June. For the remaining nine months of the year, business rates will be discounted by two-thirds up to a value of £2 million for closed businesses and a lower cap for those that have been able to open.
And of course the extension of the furlough scheme to the end of September will be welcomed by businesses in all industries – travel included. Although as Advantage’s Julia Lo Bue-Said points out, travel firms are not able to “take full advantage of the [furlough] support package in its current form”.
“Travel agencies do not make any money until their clients travel, but they still have to employ people to facilitate bookings and amend cancellations and refunds when required,” she says.
It’s a point which the industry has made to government time and again. The lack of support and understanding of this from Westminster only serves to further emphasise why a dedicated minister for outbound travel is so sorely needed – someone who is able to stand up in parliament and explain the unique pressures facing the sector.
We do of course still have our esteemed tourism minister Nigel Huddleston, who I’m sure will have welcomed today’s Budget – after all, when TTG interviewed him back in December he insisted the travel industry had received “plenty of support”, namely in the shape of Eat Out To Help Out.
But back on planet reality, travel agents, tour operators, homeworkers and the multitude of other travel businesses that make up this fantastic industry have been left to wonder, yet again, how their businesses can navigate – and indeed survive – the next few months.