Logging into LinkedIn has become a bittersweet experience in recent
weeks. Every day seems to deliver the news of friends and industry acquaintances
being made redundant as a result of the coronavirus pandemic, yet each bulletin
is unfailingly accompanied by displays of overwhelming support.
As the UK government’s approach to quarantine continues to stymie
business confidence, and with the Coronavirus Job Retention Scheme coming to an
end in October, more travel businesses are being forced into the painful
procedure of reducing staff numbers.
While the plight of the leisure travel industry has garnered much air
time among mainstream media outlets, the corporate sector has often sat in its
shadow in spite of its significant contribution to the economy – some £220
billion annually, according to the Business Travel Association (BTA).
However, the BTA, which represents travel management companies, has
long warned that 50 per cent of all jobs in the business travel sector are at
risk, with several industry and TMC sources giving credence to the figure. The
organisation also says up to 75 per cent of TMC staff were furloughed at the
height of the pandemic.
“A number of members are adjusting the number of staff for the longer
term with the furlough scheme coming to an end in October,” said BTA chief
executive Clive Wratten in a recent webinar.
“We’re going to sadly see some significant job losses and it breaks my
heart to see so many wonderful people in this industry that are impacted by
this.
“We know that one in two jobs are at risk in the travel management
industry – 7,000, 8,000 jobs could go and that’s before we talk about the
airline industry, the hoteliers… I’m afraid it’s not a trend that’s going to go
away any time soon.”
In the wider travel industry, ABTA this week declared 39,000 jobs have
already been lost or placed at risk across the outbound travel sector. Having
conducted its most comprehensive study since the onset of the crisis, it also says 65 per cent of
companies have either made redundancies already or have started a consultation
process.
While redundancies are clearly accelerating, the corporate sector has
also suffered what is thought to be its first agency victim when BTA member Business
Travel by STA and its parent company STA Travel ceased trading last week,
affecting 500 UK employees.
Wratten told BTN Europe: “This grave
development reinforces the need for government action now to help an industry
that employs many thousands and contributes many billions to the economy.
“The forthcoming end of the furlough
scheme will bring even greater pain to our industry and it’s vital that it’s
either extended or replaced with another scheme that enables our survival.”
American Express Global Business Travel (GBT), the UK’s largest TMC, has
also highlighted the potential catastrophe that lies ahead this autumn.
In a recent letter that was shared with BTN Europe, GBT’s chief
executive Paul Abbott wrote to the UK’s Chancellor of the Exchequer, Rishi
Sunak, highlighting his “great concern” about the end of the Coronavirus Job Retention
Scheme on 31 October.
“Until now the UK TMC sector has managed to avoid
mass redundancies,” wrote Abbott. “But financial collapse now stares many in
the face. I appeal to you to consider an extension of the existing scheme, or
to develop a new programme to reduce the serious short-term pain in the
business travel sector.
“The UK is about to leave the EU and the Single
Market. Our future economic success depends on our ability to trade with
nations across the world. Failing to protect the UK’s business travel sector at
this crucial juncture poses a threat to our economic prosperity.”
Abbott continued: “While I appreciate that
ministers have engaged with airlines and leisure travel industry stakeholders,
I am concerned that the voice of the UK business travel sector is continually
overlooked.”
GBT has maximised use of furlough schemes around
the world and introduced voluntary redundancy and early retirement schemes.
While it has not made any forced redundancies to date, many other TMCs have
moved to reduce numbers and, in some cases, dramatically.
“We’re seeing large amounts of redundancies, mainly
within the operations departments of TMCs,” says Emma Gregory, director at
Urbanberry Recruitment, a specialist in the travel sector. Numbers vary from
one TMC to another depending on their client base, she says. “In some
companies, whole departments have been let go or teams reduced from 30 to five
consultants.”
Suppliers have been hit too but not at the same
level as TMCs, says Gregory, who corroborates fears of growing redundancies
this autumn if the government does not provide additional support. While much
exposure has been given to job losses at airlines and hotel groups, the TMC
market could find itself hit the hardest of all.
Travel managers have not been nearly so affected,
says the ITM’s chief executive Scott Davies, who estimated only 10 to 15 per
cent were furloughed even though many work for corporates that are wielding the
axe across other departments. “It was noticeable early in the situation that
buyers were going through a different experience to suppliers,” he says.
“The great tragedy of the situation is the potential loss of talent from our
industry,” adds Davies. “A lot of people are going to be displaced. There will
be a lot of short-term contracts and there will be growth in the independent
practitioners or consultant part of our industry. We need to embrace and
support that as people make their way through the recovery.”
But there is some cause for optimism. Gregory says
there are self-employment opportunities for corporate travel consultants “which
are appearing more and more” and, in the longer term, there will be a
requirement for candidates well-versed in change management, strategy, project
management and senior roles that will help shape and drive newly streamlined
TMCs.
“And despite a lot of
business development people being let go, they are likely to be needed to win
new business as there is predicted to be lots of movement by clients between
TMCs in 2021,” she adds.
At the beginning of August the BTA launched BTA
Cares, a programme of support, advice, masterclasses, events and new
opportunities for those in the business travel community who find themselves
out of work as a result of the coronavirus pandemic.
“We believe that as an industry association we need to look after our
people going through this,” says Wratten. The scheme will “throw its arms
around business travel professionals when they need it most”.
He adds: “As we navigate a sustainable way out of the Covid-19 crisis,
this initiative is the first step towards building a stronger community and
extending a helping hand.”
In the meantime, the travel industry must continue to lobby government
for urgent support that will stem the flow of job losses.
ABTA proposed a five-point plan to help ‘save
travel’ as it released its new research. It calls for the regionalisation of
quarantine measures, the introduction of testing at airports, the granting of
an APD holiday, the provision of recovery grants and ongoing salary support.
Earlier in August, the BTA called for a government
‘parachute package’ which included financial support to cover 60 per cent of TMCs’
employee salaries until at least the end of 2020. The aid would subsequently be
repaid through 10 per cent of profits after each business quarter. It also proposed
a 12-month suspension of APD and business rates.
“Our industry plays a crucial role in
helping British business travel and trade and, until demand returns, we
urgently need government support to help us survive,” says Wratten.
“Targeted and limited government backing for the business travel sector will
not only save many jobs in our industry, but underpin one of the vital support
pillars for British business as a whole.”
In the BTA’s proposal to the chancellor
and transport secretary Grant Shapps, Wratten said the specific complexities
and needs of the business travel sector have, in the views of many of its
members, been overlooked and that they fear for the future without further
support.
The corporate sector and the wider
travel industry must continue lobbying for support until the government answers
its calls. The alternatives are almost unthinkable.