Managing liquidity remains a priority for a vulnerable travel sector

Managing liquidity remains a priority for a vulnerable travel sector

News of changes to the green travel list have been met with mixed greetings across the travel industry. Although the addition of major holiday destinations such as Malta and Balearics has been welcomed by the sector, confusion around the use and meaning of the fourth ‘green-watch’ category (to which many of the newly added destinations have been added to) and the requirements around pre and post-departure testing may result in muted enthusiasm from consumers.

That said, the UK Government now appears to have signalled a somewhat clearer approach to reopening international travel. A very gradual and cautious expansion of the green list is likely to be allied to a policy providing certain exemptions for double-jabbed residents wishing to travel to amber-listed countries later in the summer. What is now becoming more unpredictable, and with the potential to cause even greater headache for would-be holidaymakers, is the risk of growing outbound restrictions being implemented by popular destination countries. Italy, Germany and France have already established quarantine restrictions, seeking to limit the importation of the transmissible Delta variant. Whilst many UK travellers may take the educated risk of serving ten days’ self-isolation on their return, quarantine and/or onerous testing at the destination has the potential to discourage all-but-essential cross-border travel.

The EU’s COVID-19 travel certificate is expected to become active from 1 July 2021, making cross-border travel for double-vaccinated EU citizens far more straightforward. UK tour operators and agents may find that the greater certainty of travel mean that European tourists will get a head-start on getting bookings for prime locations.

After a costly false start in May, when Portugal was added and removed from the green travel list within three weeks, the sector will be hopeful that further turbulence can be avoided. Operators will need to take a careful and balanced approach this time round – seeking to make the most out of the limited peak holiday opportunity (which is now likely to be backloaded to the end of the summer), whilst ensuring they hold enough liquidity in reserve to manage the administrative and logistical burden should there be another wave of COVID-related cancellations and postponements. Operators need to also consider their cash flow carefully, given that many bookings for Summer and Autumn 2021 are likely to be made using credit vouchers consumers have accumulated over the past 18 months.


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Scott Rubin

Scott Rubin

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