posted on 20/12/20
The Covid-19 pandemic has affected people in vastly different ways. At one extreme there has been the awfulness of mass deaths – 142,000 in Britain and nearly 800,000 in the USA, and rising. At the other, there have been those whose quality of life was enhanced by such novelties as the suspension of commuting, living again with adult offspring and the opportunity daily of country walks. Or simply not having to do the shopping. Some professionals and business people have enjoyed unprecedented prosperity. Nevertheless, Covid-19 has wrought incalculable social, psychological and economic damage to much of the population.
The performance arts and the travel business were two of the worst hit sectors. Because the organisation which bears my name straddles both, the editor kindly asked me to report on our experience and speculate on how the crisis might affect our activities in the future. Read no further if you are bored with other peoples’ pandemic woes or tired of alarmist prognostications. Plenty of both follow.
The business I founded thirty-three years ago and in which I still play a leading role has been severely battered, and the remaining staff, after fighting magnificently in a prolonged rear-guard action, are battle weary. Six hundred days of bad news have taken their toll; for me, it was a period of incomparable discontentedness.
Martin Randall Travel (MRT) is a tour operator (the leading specialist in art, history and music holidays), a concert promoter (sixty concerts a year) and a purveyor of learning (all our events are accompanied by expert speakers). Two at least of those descriptions lead concerned enquirers to expect the news to be gloomy; none expects it to be as bad as it is: turnover down 91%, staff reduced from over fifty to nineteen, the office gone, thirty years of accumulated reserves widdled away, the dispiriting business of cancelling arrangements painstakingly set up over years, the daily struggles with hostile suppliers of all sorts. On the other had we have benefitted from astonishingly loyal clients – 80% have left their advance payments with us, entirely voluntarily (we among the few travel firms who gave immediate cash refunds if requested) – and generously supportive shareholders.
Surely there was government help, you ask? Yes, furlough – the Coronavirus Job Retention Scheme – has been a life-saver. But unlike many businesses (pubs, clubs and nail bars, for example, so beloved of ministers and media) we cannot mothball or hibernate. Some staff have to keep working to cancel long-planned events, fight for refunds from hotels and airlines, and return or re-assign payments made by clients. We also have to continue to plan and set up tours and events for the future; there would be no point in surviving the crisis if we had nothing to put on sale once it was over. Furlough, however, was the only significant benefit we received. Travel is the only hard-hit sector which had received no tailored support – even the arts were able to benefit from the Culture Recovery Fund. We fell between several stools for the cash handouts. Pre-Covid, our overheads were £4 million (turnover £18m); in 19 months of form filling, chasing and appealing we have received only £8,000.
Let’s try to be fair: no one in government or the Civil Service has been faced with a comparable crisis before. There was no blueprint to pull out of a drawer, and not much in the way of general guidance, it transpires. And as it is in the nature of a virus not to take orders from anyone, its deadly progress was wayward and, up to a point, unpredictable. So it’s unfortunate that, cometh the hour, the country was saddled with a government which is probably the most inept in history.
‘Following the science’, their favourite incantation, soon turned out to be a shibboleth because there were, and continue to be, so many conflicting theories and prognostications. The point of politicians is that, informed but disinterested, they should adjudicate between the competing claims of experts and pressure groups. They should apply broader criteria than can be expected of specialists with a narrow focus on their own field of expertise. From the point of view of a beleaguered travel business, the truth seems to be that ministers were not following the science but following the polls. They were desperate not to lose support in the country, especially that of the recent converts. Surveys consistently showed that 70% of respondents favoured closing the borders altogether. Bear in mind that fewer than not much more than 40% of Britons indulge in annual foreign holidays; add in a dose of bar-stool ‘common sense’ and a pinch of xenophobia and that two-thirds majority is understandable.
I hasten to state that I am not opposed travel restrictions per se. I do realise that conquering Covid is the paramount task of the moment. What I do rage against are the inconsistencies and unfairnesses in policies, the lack of inter-departmental co-ordination, the constant changes of advice, the pig-headed resistance to advice and the too-late application of long-exhorted measures, the ignorance, idiocy and venality which shape so many of their utterances and decisions. Yes, and the fibs don’t help. The resulting muddle, uncertainty and anxiety are greater causes of both travel-hesitancy and travel business damage than the measures themselves.
Let’s take one example, the much-heralded traffic-light system introduced in May 2021. Of the twelve countries given a green light, nine either had a ban on UK citizens, were virtually inaccessible logistically or was embarking on civil war. Two of the remaining three were of distinctly minority interest in appeal, and the one mainstream destination changed to amber within a week. I particularly enjoyed the green light for an island which has neither airport nor hotel (population 264) and is located 1,732 miles from the nearest mainland port – which was in a red-light country. In one of most dismaying performances of modern politics, the Secretary of State for Transport spoke to camera with bouncy glee and announced ‘the grand re-opening of travel’. Does he take us for complete and utter fools? I’m afraid he does, and the sentiment is heartily reciprocated.
Does some blame lie with the travel industry in failing to lobby or communicate adequately. In my view not. One difficulty is that our concerns are the responsibility of five different Departments. Another is ignorance. The aforementioned minister still doesn’t seem to know the difference between a travel agent and a tour operator, which is like not knowing the difference in the automobile industry between a dealership and a manufacturer. Our plight has been explained many times, but they don’t take it in. Or do they?
Many in the travel business are now privately convinced that the government is happy for the outgoing travel business to collapse because they want people to spend their holiday money in the UK and not throw it away to the benefit of Johnny Foreigner. Evidence has steadily piled up, culminating with the announcement, in the week before COP, that airport departure tax would be halved for domestic flights. This at a time when other European states are effectively banning flights when travel by train is a viable alternative. Owners of properties which are let as holiday homes, even if a second home let occasionally, have never had a better year financially: taxes suspended, cash hand-outs – and unprecedented occupancy rates.
The travel business in Britain employs five hundred thousand people; it will be more expensive in the long run if we go to the wall, which seems to have been recognised by every European government in their treatment of their own travel trade. Moreover, Britain has the best leisure travel business in the world. One should be wary of such jingoistic superlatives, but it is true. Nowhere else does the consumer benefit from such a wide choice of travel and holiday possibilities, catering for every taste and depth of pocket, and from such high quality, user-friendliness and competitive pricing. There are historic reasons for this which I won’t go into, but the fact is that here is a thriving and genuinely world-beating sector of the economy which the government seems happy to let sink. This last sentence may sound similar if you have read any of the many op-eds about the creative industries and classical music in particular.
A strange and distressing by-product of a difficult trading environment is that so many institutions and companies become hostile. I shall relate two of my favourite instances. There is a government agency which issues our annual licence, conditionally upon satisfactory finances. For renewal in 2020, our shareholders came up the requisite capital and we took a Coronavirus Business Interruption Load Scheme (though we had to change banks to acquire it). For this year’s renewal we sent figures which seemed to meet their requirements and received in response a demand for a further capital injection of three-quarters of a million pounds. Many another business would have thrown in the towel at that stage, but we are blessed with a smart and stalwart team of directors. We presented our case again, addressing it this time to someone more senior, whereupon their demand was cancelled. Good news – but terrifying that a highly prestigious and hitherto profitable company could have been wiped out on the whim of a junior civil servant.
The other is this. After a year of regular chasing of Turkish Airlines for the return of £10,000 for cancelled flights, their legal obligation, they finally paid up – but the money was returned to them by our bank because Turkey is on their watch list.
Enough of woes. What of the future? Practically everyone has been wittering about the pent-up demand for foreign places and live music, and that as soon as the coast is clear cultural life and holiday habits will return to normal. I’m not so sure. I think the tectonic plates have shifted.
In the outgoing travel sphere, the surprise is that not many businesses have failed. But the crisis is not over; many are labouring under the burden of unprecedented debt; and demand may be depressed for a while, if not for ever. I expect a large number will fail in the next couple of years, and in five years’ time perhaps the majority of independent companies will have been extinguished through insolvency, absorption by mainstream operators, inability to meet the more stringent requirements of the regulators and the retirement of the owner-managers who no longer want to keep fighting to keep afloat.
Start-ups are unlikely to replenish the ranks; starting a tour operating business is incomparably more challenging than a couple of decades ago. One factor is the primacy of IT; unless entrepreneurs are savvy about website design, online marketing and back-end systems they will not get off the ground. And the regulatory and financial conditions are going to get much tougher, with capital requirements beyond the reach of most private individuals and banking, insurance and credit card services all but impossible for small enterprises to access. To these obstacles can be added the astonishing rise in bureaucratic procedures which we now have to spend so much time on – made worse by a palpable decline in efficiency.
Finally, the most important issue, will the appetite for travel or for live music revert too pre-pandemic levels? From what I have heard from concert halls, and been able to observe, it is too early to call, though there are grounds for pessimism. For MRT, currently there are reasons for optimism, with load factors (proportion of capacity sold) for next year much higher than usual – though in the context of a programme which is about half the size of that of 2019 predictions need to be cautious.
In the last twenty months, many people have become used to a relatively stress-free existence and have adapted both habits and audio equipment to enjoy music and opera – and lectures and meetings and chats – at home. Will the pleasures of in-person live events be perceived as outweighing the anxieties and discomforts – finding a place to park, negotiating crowds of revellers, rushing to catch the last train, forgetting the umbrella? Or for once-frequent travellers, will the stresses of airports, a regime of regular testing perhaps, maybe the need to book museum, restaurants, everything in advance – will home seem an attractive alternative? In addition to fears about personal discomfort, will a righteous desire not to add to carbon emissions become a transformational factor? At the moment we simply do not know. We will in a year.