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Mixed response to Budget from UK travel sector

Mixed response to Budget from UK travel sector

The UK tourism industry had broadly welcomed the Budget delivered today by chancellor Rishi Sunak – but there were also calls for more tailored support for high street travel agents.

At the centre of the plan for the coming year was a pledge to extend the furlough scheme until the end of September.

Sunak said the scheme - which pays 80 per cent of employees’ wages for the hours they cannot work in the pandemic - would help millions through “the challenging months ahead”.

The chancellor also confirmed the lower VAT rate for hospitality firms would be maintained at five per cent until September, while some £5 billion was to be made available in restart grants for shops and other businesses in England forced to close.

ABTA welcomed the extension of general business support measures.

Mark Tanzer, chief executive of ABTA, said: “We are pleased to see the government has responded to many of our calls to extend furlough, business rates relief and VAT reductions.

“This will help to support jobs and businesses over the coming months.

“However, the chancellor must move beyond the blind-spot concerning the impacts of international travel restrictions, and make support available to all travel companies whose business has been effectively closed by public health policy.”

He added: “The chancellor said there are extra grants for struggling businesses, yet many travel companies remain excluded from this critical support, despite not being able to generate income over the last 12 months.

“By focusing the grants on retail outlets, businesses including tour operators, online travel companies and home-based workers remain shut out of this much needed support.”


The sentiments were echoed by Julia Lo Bue-Said, chief executive of Advantage Travel Partnership.

She commented: “While the extension of the furlough scheme will be positive news for many sectors, travel businesses continue to be unable to take full advantage of the 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.

“Therefore, even while there is no money physically coming through the door, furlough simply does not work for employers in this sector by the very nature of the business.”

She added: “While the plan to ease lockdown has initiated some positive signs of recovery in terms of enquiries and bookings, travel agents are in a state of financial limbo because the details of how and when we will travel is still fuelled with uncertainty and restrictions.

“We know testing is critical to the recovery of travel, and we need government to take a lead on bringing down the cost of testing so that a future holiday is still affordable for families.”

Heathrow chief executive, John Holland-Kaye, was less impressed, arguing aviation had been left out of the plans.

He explained: “The chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the aviation sector.

“He clearly does not understand that all three depend on a strong aviation sector delivering the trade, tourism and investment that power vast parts of the British economy.

“Failing to even mention aviation, let alone provide full business rates relief for airports in the Budget, is a missed opportunity to ensure the sector can play a key role in the economic recovery.”

Finally, Joss Croft, chief executive of UKinbound said the road back to health would be a long one for the tourism sector.

He added: “The extension of furlough is very welcome news for our industry, as is the business rates holiday and its further cut.

“We are also pleased that leisure grants of up to £18,000 will be available for businesses that need to stay closed for longer, but we urgently need confirmation from government that tour operators, coach operators, language schools and event organisers will be eligible for these grants, having been unfairly excluded to date.

“It was however disappointing and a huge missed opportunity to hear that sector-specific support, which has been rolled out in Scotland, will not be provided.

“The VAT cut will be beneficial to hospitality and domestic tourism businesses, but its impact on inbound tourism, and the export value it delivers that will take longer to restart, will be minimal.”

He concluded: “The inbound tourism industry still has a long road to recovery and the government needs to recognise this.

“International inbound tourism to the UK can play a crucial role in supporting the economic recovery, and its levelling-up and Global Britain agenda, but this will only be possible when it is safe to travel again.

“Until then we need government to continue its dialogue with the industry and understand that further support is urgently required.”