Travel and tourism is the sector worst hit by coronavirus
Travel agencies and tour operators are the worst hit of all major industries by the coronavirus crisis, with turnover of the sector in the UK falling 56% from £2.6bn in March 2019 to just £1.2bn in March 2020.
UHY Hacker Young, the national accountancy group, says that the lockdown has already hit the prime Easter holiday season as well as two bank holidays in the Spring, sharply reducing sales for some of the highest-revenue points in the calendar.
Millions of customers who would normally be booking summer holidays at the moment have put their purchases on hold due to the coronavirus. At the same time, many customers who had previously booked holidays are now receiving refunds, further pushing down the income of travel agents and tour operators.
UHY Hacker Young says that some in the sector are still high street businesses, who are now struggling to pay rent as well as being forced to furlough staff. The firm says it is likely that many travels agents and tour operators will not survive the coronavirus even after the lockdown ends.
Although the government has provided businesses with temporary help to limit the impact of the coronavirus, such as the CBILS scheme, the ban on evictions and winding up petitions and business rate relief, UHY Hacker Young says that once these protections lapse many businesses will go under.
Peter Kubik, partner at UHY Hacker Young, says: “The UK’s travel agents and tour operators have been hit hardest by the double whammy of the lockdown and a collapse in discretionary consumer spending.”
“The lockdown is a particularly hard blow to high street travel agencies who have been struggling for years against the shift to the internet and the huge DIY sites like Booking.com and Expedia.”
“There will be a rush of people booking holidays once lockdown ends but that may come too late for some in the sector. Many are likely to be effectively insolvent already and only surviving because of the help the government has put in place.”