A travel industry meltdown would be bad news for all of us

The collapse of the firms that organise our holidays will mean less choice, less expertise and higher prices. They need help…

From the very beginning, it has been clear that this pandemic is going to have a huge impact on the travel industry. Agents, tour operators, airlines and many other companies have been stretched to the limit by the collapse in bookings, and the huge workload and financial strain caused by cancellations and refunds.

They have shown remarkable resilience. So far, we have seen relatively few go under – they have clung on by deferring their rents and rates and because the furlough arrangements have enabled them to cut staff costs. But the cracks are starting to show. In the past couple of weeks, STA – the youth travel specialist founded 40 years ago – closed its 52 UK shops. Norwegian – which has grounded 140 planes – has appealed for more financial support, Virgin is in the last stages of arranging an emergency injection of funds and BA has already announced more than 10,000 redundancies.

Meanwhile, Abta – which represents travel agents and tour operators – has been making desperate calls for help, warning that the industry is now at a critical point. It says without significant government support, tens of thousands more jobs will be lost.

The situation has intensified because all hopes that the summer season might bring some relief have been lost and things have been made worse by the changing of quarantine rules.

With France and Spain off the traveller’s map, we are entering what is traditionally the quietest time of year for bookings. This, combined with the termination of the Government’s furlough scheme at the end of October, means that tour operators, travel agents and airlines are facing a perfect storm: few destinations to offer, little income, high costs and no more support.

Why should this matter to consumers? Are we not, after all, furious with travel firms for letting us down in a time of crisis – for denying us our rights, delaying refunds and failing to communicate with customers? There have been many problems, and we need to see reform. But we also need to be conscious of what will happen if the travel industry goes into meltdown.

The potential loss of jobs and the economic hit to such a big part of the economy will affect us all. But I’m worried about three more specific things.

First is the loss of expertise. Organising travel arrangements is a complex business. It requires experience, contacts, knowledge and the subtle ability to understand a customer’s needs – especially when offering one of the more interesting, niche itineraries.

If a significant number of smaller specialist agents and tour operators go under, then it could be years before that side of the industry is rebuilt.

This would lead to my second concern – a loss of choice. Take one example. If you enjoy expert-led cultural tours, up until now you have had a rich array of themes, itineraries and departures offered by dozens of specialist companies. By next year, that choice may be significantly reduced.

Lastly, the inevitable corollary of fewer choices is higher prices. Survivors of this economic Armageddon will not only have to restore profitability, they will have to pay off their debts and replenish their reserves. The less competition they face, the more aggressively they will do this and the more we will have to pay.

So what needs to be done if we want to keep choice and expertise alive and travel affordable? This week, Telegraph Travel launched a campaign to restore confidence in travel by shortening quarantine requirements and introducing Covid-19 testing at airports (see p6). We believe this is a crucial step in the rehabilitation of the industry. But the Government needs to ensure travel’s cries for help are heeded, and do whatever is necessary to save this crucial part of our lives.