Aviation industry vital for business travel and tourism
The aviation industry is in a critical situation as coronavirus lockdowns imposed across the world have ceased business travel and tourism.
The UK has currently banned all non-essential travel, with those entering the UK required to enter a 10-day quarantine in a government-approved hotel, which became mandatory from 15th February.
Several airline chief executives questioned the scientific relevance of the UK government’s plan, arguing that increased travel restrictions encourage the risk of further economic fallout.
In their letter to the government, when the 14-day quarantine restriction was in place, the airline chief executives stated that it would dissuade travel to the UK, particularly when other economies lifted border restrictions at the time.
According to the Guardian, the executives wrote: “an open-ended quarantine, with no set end date, will make an already critical situation for UK aviation, and all the businesses we support, even worse.”
They went on to say that the UK government’s current plan will decrease competition within the UK aviation sector and introduce more challenges.
The aviation industry is already suffering from economic headwinds due to the collapse in air travel demand and border restrictions imposed as a part of COVID-19 lockdown measures. Global oil markets have collapsed, and airlines have grounded fleets due to the coronavirus pandemic.
With the easing of UK lockdown restrictions from March, and non-essential businesses reopening from 12th April, many are now eager to know when specifically, business travel and tourism can resume.
According to the latest study from the Global Business Travel Association (GBTA) survey, participants are optimistic about the return of global business travel, forecasting growth of 21% worldwide in 2021.
Dave Hilfman, GBTA’s interim executive director, stated “the continued rollout of the vaccine will be central to recovery globally, as will decisions the new Biden Administration makes regarding global trade and border and quarantine policies.”
UK warned against making elaborate summer holiday plans in 2021
It remains uncertain as to whether it will be safe for Brits to make summer holiday plans abroad this year. UK Deputy Chief Medical Officer, Professor Jonathan Van-Tam, believes it is too early to say whether or not people can begin making plans to get away this summer.
Whilst the UK’s rapid vaccination rollout has undoubtedly improved the outlook for the UK, daily coronavirus currently on a 7 day average of 4.919, which are around the levels seen during the first wave of the virus. As a result, Mr Van-Tam, highlighted the importance of the UK easing coronavirus restrictions gradually.
In terms of a timeline for when UK travel abroad could commence, Mr Van-Tam went on to state “I can’t give people a proper answer at this point because we don’t yet have the data. It’s just too early.”
As it stands, the earliest travel abroad could recommence is 17th May, though it seems like this may be an overly optimistic target.
If the UK aviation industry is able to see recovery during the summer, this will help shore up the British pound (GBP) in currency markets as the UK’s airline industry makes a significant contribution to UK GDP.
EU to support the tourism industry by gradually easing border restrictions
The European Union Commission devised plans to gradually lift border restrictions and resume travel to revive tourism, a primary industry across the 27-country bloc. However, it looks as though this will not be enforced for some time given the recent third wave of infections across the bloc.
The tourism sector, which contributes almost one-tenth of EU GDP, has suffered a devastating blow due to the coronavirus pandemic and lockdown restrictions, with coronavirus cases still continuing to rise.
The EU Commission is proposing alternatives to the travel ban that may include targeted restrictions and a complete lift on internal border checks.
The collapse in air travel has caused Europe’s tourism industry to lose an estimated 6.4 million jobs, a dramatic decline from the 12 million employed before the coronavirus crisis.
Lifting border restrictions will support the hospitality and tourism industry on its path to recovery by encouraging overseas investments and travel.
EU border restrictions remain in place
France recently imposed new border restrictions, banning all travel from outside the EU, though transporters carrying goods to or from the UK would not be affected. This week also saw Portugal tighten border restrictions following a rise in infections.
The tourism sector, which contributes almost one-tenth of EU GDP, has suffered a devastating blow due to the coronavirus pandemic and national lockdown restrictions. Rising coronavirus cases in the EU have cast a shadow over any plans to lift travel restrictions in the short term. The EU Commission is proposing alternatives to the travel ban that may include targeted restrictions and a complete lift on internal border checks.
The collapse in air travel has caused Europe’s tourism industry to lose an estimated 6.4 million jobs, a dramatic decline from the 12 million employed before the coronavirus crisis.
The eventual lifting of border restrictions will support the hospitality and tourism industry on its path to recovery by encouraging overseas investments and travel.
Overseas investments and moving abroad
Air travel restrictions, triggered by draconian lockdown measures, have also caused the secondary property market to suffer.
Social distancing measures and travel bans are preventing prospective buyers from physically viewing a property, which is causing the secondary housing market to suffer.
To counter this hindrance, property portals have incorporated new technologies and web tools that allow users to view a property virtually. However, sales and rental activity in the overseas property market continue to suffer due to economic uncertainty and a lack of flights.
The current economic environment is challenging for individuals and businesses operating on an international scale. Companies with overseas investments are facing pressure from their competition while having to manage costs to protect their business amid lockdown restrictions.
Whereas individuals are reluctant to invest or purchase property abroad due to growing economic uncertainty and fluctuating exchange rates.
Though there are restrictions in place that are limiting business travel and making the process of buying a property abroad more difficult, we are aware that many people need to make international payments.
Whether that is to fund overseas business operations or to cover overseas property expenses, if you need to send money abroad, Halo Financial offers competitive exchange rates for businesses and individuals.
Through careful management, we can minimise the risks associated with foreign exchange volatility and maximise on opportunities to ensure you get value for money.
Future of business travel and tourism post Coronavirus?
Although travel restrictions remain in place for the near future, business travel and tourism in the UK after COVID-19 seems optimistic, as the UK continues to administer vaccines at an impressive rate. The number of daily coronavirus infections in the UK is also flattening day-by-day, and should this continue, confidence in the travel industry will increase.
Many are confident that travel can resume in the summer, although the shape that this may take remains uncertain. A substantive recovery will not only support UK aviation but the UK economy due to the influence the travel industry has on UK GDP.
If air travel can begin to return to a degree of normality, this will also have a positive effect on airline shares and in turn, the British pound (GBP) by improving the UK’s economic outlook.
So, it seems that the future of business travel and tourism remains dependent on the effectiveness of plans to exit lockdown on a more permanent basis and travellers feeling comfortable to fly.
