The extension of the UK government's furlough scheme has been welcomed by the business travel sector but the meetings and events industry looks set to struggle further.
In today's Budget, the Chancellor of the Exchequer extended furlough – officially the coronavirus job retention scheme – until the end of September. It had been due to finish at the end of April. Those furloughed can receive 80 per cent of their salary but employers will have to begin to contribute more.
Scott Davies, CEO of the Institute of Travel Management said news of the extension was “very welcome”.
“Whilst the roadmap out of lockdown and the Covid vaccination programme has given our industry a light at the end of the tunnel, the recovery is still going to take several months. It’s unlikely that there will be significant resumption of business travel until the second half of 2021," said Davies.
“The furlough extension will help to retain more of the precious talent within our industry and help our members, particularly suppliers, to plan their resourcing and be ready for when business travel returns."
Clive Wratten, CEO of the Business Travel Association, said the extension would “save jobs across the sector”.
He added, “However, business travel has again been excluded from vital grants at a time when travel management companies are precluded from doing their jobs by international travel restrictions.
“It is imperative that the new global travel taskforce brings forward a framework in which business travel is fully integrated, and enables it to resume and contribute to the UK economy once more.”
Andrew Crawley, American Express GBT’s chief commercial officer, said: “Extending the furlough scheme is significant for many businesses across the industry as we wait for next month’s travel taskforce recommendations.
"But as we prepare for the restart of international travel, it’s also vital that governments take immediate steps to align on how health passports and related documentation will be accredited from trusted sources and mutually recognised by countries and authorities around the world.
“The UK must therefore use its G7 presidency to lead conversations on a global economic recovery underpinned by the seamless return of international travel. Facilitating a global travel framework is an opportunity for the UK to show leadership while championing international trade and economic growth.”
Other measures announced in the Budget by the Chancellor include:
• Hospitality and leisure businesses will pay no business rates until the end of June and will be discounted by two-thirds for the remainder of the year with a cap of £2 millon;
• VAT stays at the reduced rate of 5 per cent until 30 September then 12.5 per cent until April 2022;
• In April 2023, the rate of corporation tax will increase to from 19 per cent on a tapered scale depending on profitability up to a maximum of 25 per cent;
• Fuel duty is frozen.
However, Simon Richards of the HBAA and managing partner of Convenus says the budget did not go far enough for the meetings and events sector.
He said the Budget “made no mention of support for meetings, events and accommodation agencies or venues anywhere. The business-to-business sectors have faced all the same issues of having to survive without any income until lockdown eases and will do so for some months longer as the lead time for events is much longer.”
Richards added, “Agencies require widespread access to the grants already available, but our research found that 20 per cent of our agency members had not been able to access any grants and less than half have received support from existing schemes.
“Many resilient businesses and talented individuals in this sector are struggling to survive until after 21 June when they can start creating and running major live meetings and events once more.”