Reading Time: 6 minutes


UK travel industry forecast 2021



The UK travel industry has been one of the most heavily impacted sectors as a result of coronavirus, along with hospitality, arts and entertainment.

The UK travel industry shut down for the majority of 2020 and the beginning of 2021, with many businesses left in a state of financial disarray. It can be difficult to predict what the future will hold for the travel industry, given that UK COVID-19 restrictions are currently still in place and look to be for several more months.

That being said, with coronavirus vaccines being administered at an impressive rate, it seems likely that some form of travel abroad will be permitted later on this year for the UK. We take a look at what travel and tourism could look like in 2021 once coronavirus lockdown restrictions are lifted.

aircraft

How have UK airlines been impacted by coronavirus?

Travel restrictions imposed by COVID-19 have had devastating effects on UK airlines, all of whom have experienced significant financial losses. Many airline CEOs have labelled 2020 as the most challenging year in airline history.

Ryanair has recently stated that they expect an annual loss from the year to 31st March 2021 to hit over EUR 1 billion. The final three months of 2020 saw passenger levels reduced by 78%, experiencing a Q3 loss of EUR 306 million.

EasyJet CEO, Johan Lundgren, has declared that the airline could not survive another summer with no passengers and pleaded for the UK government to state a clear plan to lift restrictions. During the last three months of 2020, EasyJet recorded an 87% decline in passenger demand and recorded a financial loss of GBP 400 million last year.

In 2020 it was criticised that little government support had been made available for struggling airlines, many of which have had to make significant redundancies. However, UK Transport Secretary, Grant Schapps, recently stated that GBP 7.2 billion has now been secured for the UK aviation industry, which has been funded by the taxpayer.

Ryanair CEO, Michael O’Leary, believes that there will be a strong recovery in UK travel in 2021 as a result of the UK vaccination programme. “I would be reasonably confident that we will see a return to relatively high-volume travel in that key July, August, September quarter”, Mr O’Leary said.

Focus on winter travel

With the prospect of summer holidays still hanging in the balance, a number of airlines have placed greater focus on their winter 2021 schedule, in the hope that the UK will be in a more confident position.

Ryanair has added many new routes to their winter 2021/22 schedule in the hope to recover 2020 losses. Focus has been placed on popular ski destinations such as Milan, Turin and Salzburg. Less focus is being placed on business travel locations, given that many businesses have now encouraged remote working and virtual conferences.

Wizz Air has also revealed a packed winter schedule including over 144 destinations across 12 UK airports with destinations including Dalaman, Lanzarote, Faro, Gibraltar and Sharm El Sheikh.

Can I travel abroad this summer?

Whilst it’s hoped that UK travel restrictions will be eased by the summer, the UK government has advised against making holiday arrangements for now. Whilst there is currently nothing in place to stop you from booking a holiday abroad currently, it has been recommended by the UK government to wait until we have a clearer picture of what’s ahead.

UK Prime Minister, Boris Johnson, is set to reveal a roadmap out of lockdown on 22nd February which will give an indication of what is to be expected.

UK Health Secretary, Matt Hancock stated: “I know that people are yearning for certainty over whether they can have a summer holiday, but pandemics are difficult times and there is a lot of uncertainty, so I am afraid that people will have to be patient before we can get that certainty.”

Should travel abroad not be permitted in time for the summer, this is likely to have dire consequences for the UK travel industry, with The Travel Association (ABTA) stating that it is a scenario the travel industry simply can’t afford.

Socially distanced travel

As soon as travel abroad is permitted to go ahead, there will undoubtedly be a number of changes when it comes to rules and operations. Despite declines in infection rates and rapid levels of vaccinations, socially distanced travel is likely to be a reality for some time.

Crowded markets and heaving restaurants are unlikely to be experienced when travelling abroad for the foreseeable future. Mask wearing and hand sanitising are also likely to be mandatory when travelling through airports and aboard flights.

New passenger priorities for airlines

Previously, the main concern of most passenger’s pre-pandemic was finding the cheapest flight possible. Going forward, many passengers are likely to be concerned with airline safety and hygiene standards. We may even see a trend in passengers upgrading to business class in a bid to obtain more space and separate from crowds.

Reliance on travel experts

Booking travel in 2021 is likely to be an uncertain process, not only because of safety concerns but also because of post-Brexit rules. Many bookers may wish to seek advice from a travel specialist to gain insight into travel safety and also additional requirements when travelling to the EU.

The success of the UK travel industry in 2021 is very much reliant on the UK government allowing travel during the summer. Should this be permitted, UK airlines are likely to experience a strong recovery in 2021 and beyond.

To find out how to save money when sending international transfers, please give Halo Financial a call on 020 7350 5474.