Travel agencies and tour operators have been the worst hit sector during the coronavirus pandemic with turnover down 56% since last year.
This is the stark assessment of accountancy network UHY Hacker Young which predicts that many travel companies “will not survive the coronavirus even after the lockdown ends.”
Turnover in the industry fell from £2.6bn ($3.2bn) in March 2019 to £1.2bn this year as the UK lockdown took hold.
UHY Hacker Young said lockdown had already hit the prime Easter holiday season as well as the two Spring bank holidays, sharply reducing sales at peak time.
Millions of customers who would normally be booking summer holidays at the moment have put their purchases on hold due to COVID-19. And travel agents and tour operators are struggling to pay refunds for cancelled bookings due to a lack of incoming revenue.
Some of these firms have branches on the high street and are now struggling to pay rent or keep staff furloughed.
Although the Government has provided businesses with temporary support via interest free business loans, a ban on evictions and winding up petitions, plus business rate relief, UHY Hacker Young forecasts once these protections lapse many businesses will go under.
Peter Kubik, Partner at UHY Hacker Young, said: “The UK’s travel agents and tour operators have been hit hardest by the double whammy of the lockdown and a collapse in discretionary consumer spending.
“The lockdown is a particularly hard blow to high street travel agencies who have been struggling for years against the shift to the internet and the huge DIY sites like Booking.com and Expedia.”
He said the rush of people booking holidays once lockdown ends may come too late for some in the sector.
"Many are likely to be effectively insolvent already and only surviving because of the help the government has put in place," he added.