The coronavirus pandemic has thrown the travel industry into a tailspin. In the latest blow for the sector, the government last week imposed quarantine measures on people arriving in Britain from France and several other countries.
Even before that move, the outlook was bleak. Tui, Europe’s biggest holiday company, warned last week that it had lost €2bn (£1.8bn) in the nine months to the end of June. Revenues had collapsed by 98 percent between April and June – the period during which lockdown measures effectively grounded international flights around the world.
Official figures show that a fifth of British holidaymakers have already scrapped plans to travel abroad this summer because of quarantine issues. In a survey by the Office for National Statistics after the imposition of quarantine rules for Spain – but before France was added to the list – as many as six in 10 UK adults said they would be put off travelling abroad if they had to self-isolate for two weeks on their return.
The loss of British tourists will have a heavy impact on the big economies of Europe. France and Spain are the top two destinations for British tourists, who make as many as 18 million visits to Spain each year, mainly for holidays, and more than 10 million to France.
For sectors such as tourism and the arts, the removal of support at this early stage is a death sentence
But although quarantine rules may prove damaging for Disneyland Paris, small towns in the Dordogne and hotels on the Costa del Sol, British companies and jobs will also be heavily affected.
Airlines and travel operators, which between them employ hundreds of thousands of people across the country, are on the frontline of the economic meltdown triggered by quarantine. Ministers need to urgently wake up to the risks facing these businesses.
The first remedy the government should consider is an extension of the furlough scheme and a higher level of support for one of the hardest-hit sectors of the economy.
The wage subsidy programme – which has supported a total of more than 9 million jobs since its launch in March – is being scaled down from this month and is due to close completely by the end of October. This may be appropriate in sectors that have reopened after lockdown, but for those with restrictions – such as tourism and the arts – the removal of support at this early stage is a death sentence.
So far the chancellor, Rishi Sunak, has resisted the idea of sectoral furloughs – saying it would be too difficult to determine which companies are in which sectors when there is a high degree of overlap. But as the rapidly evolving response to the pandemic has shown, such challenges should no longer be considered insurmountable.
The other argument is that the longer the pandemic goes on, the more important it is for the economy to adjust to the “new normal” of physical distancing. This view has spread from the Treasury to the Bank of England, where Andrew Bailey has publicly backed the ending of furlough for this reason.
Without a lasting vaccine to eradicate the risk of Covid-19 entirely, the economy will have to adjust over time. The aviation sector in particular is in any case facing a need for fundamental change to its models, as the climate emergency threatens an even deadlier reckoning than the pandemic. While serving as a catalyst for decarbonising the economy, the quarantine measures could also encourage staycations, to the benefit of other parts of the UK economy.
However, to make such a transition overnight would cause untold harm to firms and workers whose livelihoods still depend on overseas travel. Britain’s aviation sector alone has issued almost 20,000 redundancy notices since the beginning of lockdown, with a severe knock-on impact for jobs in the wider supply chain. Communities around airports – such as Crawley, near Gatwick – could be left with mounting unemployment.
After scrapping the holiday plans of millions, the government must now fly into action to support businesses and workers whose livelihoods are now at risk through no fault of their own.
