Clarifications required by AITO in connection business first-aid package

March 30, 2020 | AITO – Association of Independent Tour Operators

Travel Insights Report

AITO (www.aito.com) welcomes the Chancellor’s immensely augmented post-Budget first-aid package, aimed both at maintaining cash flow in business and maintaining the health of the UK economy during the Coronavirus crisis.

However – as with all grande geste policies – there is usually a sting the tail, and it is always better to defer judgement until we can see and study the small print.

As SME businesses, we need urgent clarification on three of the Chancellor’s key points:

Firstly:  We need clarification on the proposed system aimed at giving tour operators a breathing space before refunding clients when they are coping with (a) no new incoming business and, at the same time, (b) waiting for refunds yet to be received from their own airline and accommodation suppliers.  It must be stressed that there is no intention whatsoever of reducing financial protection to the public – just a need to make this process manageable for tour operators without wiping out their liquidity and making it impossible for them to function.

Secondly:  We await details regarding how the Coronavirus Business Interruption Scheme will work, to ascertain its potential usefulness (or not) to tour operators.  It is not clear how interest payments will be handled after the first six months (which are interest-free), or whether such loans can be applied for later in the year.  It would be pointless for tour operators to take out a loan today, for example, when they would find it extremely difficult to commence loan repayments due to lack of new holiday bookings whilst the vast majority of destinations worldwide are off-limits to travellers due to Government edicts.  The duration of the loan is another vital aspect – will businesses have, for example, options of 10 year, 15 year or 20 year loans? – as is, of course, the as-yet-unknown interest rate.

Thirdly:  The Government makes mention of retail/hospitality and leisure businesses being eligible for 100% rates holidays and a £25,000 grant for those working from premises with a rateable value of between £15,000 and £51,000.  AITO members (operators and travel agents alike) certainly see themselves as part of the hospitality and leisure sector, under the remit of travel and tourism, but it is not clear whether outbound SME tour operators – who are very much in need of such help – are included in the Government’s interpretation of what a retail, hospitality or leisure business looks like.  AITO members anxiously await this important clarification.  We would also like to see the maximum rateable value for businesses increased considerably.   While regionally-based businesses may be covered by the £51,000 cap, few of those based in metropolitan areas will be eligible.

Note for Editors:  AITO (www.aito.com) has 120 SME tour operator members (mostly outbound from the UK) which provide an unrivalled range of holidays to every corner of the world..  All abide by AITO’s Quality Charter, all offer 100% financial protection for consumers (in excess of current Government requirements) and all support sustainable tourism initiatives.  AITO also has a long-standing partnership with circa 100 independent Specialist Travel Agents, called AITO Agents.  All AITO members focus on high standards of customer service from committed teams offering excellent personal service allied with high levels of expertise.

Press:  For more information on AITO, or to interview Noel Josephides, Director of Industry Issues at AITO, or Bharat Gadhoke, Head of Commercial at AITO, please call Sue Ockwell or Jackie Franklin at Travel PR on 020 8891 4440 or 07831 126 356; email s.ockwell@travelpr.co.uk or j.franklin@travelpr.co.uk.