It was fantastic to see Karen and La Vida Travel from Newport East in Westminster this week at the #TravelDayOfAction. I spoke on their behalf in the Aviation, Travel & Tourism debate today calling for more support for this hard hit industry.
Here’s my speech from the debate in Parliament this afternoon:
I am grateful to be called in this important debate, not least because, like most hon. Members here, I joined the lobby yesterday and met constituents who had travelled to Westminster. I wanted to show my support for the travel industry in these challenging times. It was a lobby that highlighted yet again that the UK travel industry has had to deal with extremely tough impediments, more than most industries, and needs our support.
Today’s debate comes in the midst of what is still an incredibly challenging time for businesses and workers in the travel and tourism industry. Analysis from ABTA—The Travel Association estimates that 195,000 people working in the travel industry have either lost their job or are at risk of losing their job due to the crisis. Considering that the sector employs around 526,000 people across the UK in normal times, we are looking at the livelihoods more than a third of the people in the industry being wiped out.
I will focus my remarks on smaller travel businesses, which feel forgotten and are staring into the unknown. Office for National Statistics figures show that revenue for travel agents and tour operators have been down 86% to 90% each month since February 2020, with no specific sector support forthcoming from the Government and limited access to more general grant support measures. ABTA estimates that around 60% of SME travel agents will not have the cash to survive for more than three months, based on current trading conditions and the Government support that is available at the moment.
Last week, I visited Karen Marin Reyes and the team at La Vida Travel in Newport East. La Vida Travel is an award-winning business with a loyal local following and a reputation for very good customer service. Karen, who was here in Westminster yesterday for ABTA’s day of action, spoke to me about the difficult outlook her business and the sector faces, and echoed all the calls for sector-specific financial support for the travel industry, which remains busy but is struggling to make money in the face of very low new bookings and cancellations.
Companies such as La Vida Travel were not able to shut their doors when the pandemic came; they were busy helping their customers, including processing many cancellations and rebookings. Like all hon. Members, having helped constituents abroad to get home during the first months of the pandemic, I do not underestimate how stressful that is for clients and the staff helping them, or the sheer amount of work involved. These businesses were also having to foot the bill for transaction charges from credit cards, debit cards and banks, which are not refunded to the travel agent. I would like the Minister to look at that specific point, because they are carrying that loss themselves.
Travellers typically book six months ahead, so there are long delays in receiving payments made for bookings, which are only received a few months before the date of travel. These companies do not see the money for many months. For bookings that are being made now for next summer, the travel agent will receive payment in the spring at the earliest. Because of lack of confidence, many travellers are unwilling to pay in full for holidays next year because of the uncertainty. I note the comments made by other Members about the need for consistency in travel advice. My right hon. Friend the Member for Exeter (Mr Bradshaw) made a strong contribution about that; we need confidence in the Government’s system.
The knock-on effect of all these factors is a shortage in cash flow that is especially pronounced for smaller travel businesses, especially as they make their money to survive through the winter in the summer. They need more help with the loans that they are due to pay back, because many just do not have the money at the moment to start making payments.
We need the Government to step up and do better. As others have said, it is not just about holidays; it is about people’s jobs and livelihoods.