We are delighted to sponsor ABTA’s Travel Finance Conference for the fifth year running. Our directors, Martin Alcock and Adam Pennyfather will be taking to the virtual stage to explore the key indicators for companies as the sector begins to recover and financing a travel business in 2021.
Ahead of the event, Martin reflects on the last Travel Finance Conference and looks at the challenges facing the industry this year.
I have fond memories of last year’s ABTA Travel Finance Conference. This is mainly because it was my last time in a room with more than six people.
The conference was held on March 11th. COVID had landed in the UK and panic was rising. Italy had just gone into a full-scale lockdown and speculation was mounting that we’d be next. The whole event nearly didn’t happen, after several sponsors, speakers and delegates pulled out at the last minute. Even the host cancelled a few days beforehand and the alternative venue turned out to be the former offices of Thomas Cook. A fact which only added to the sense of foreboding.
Despite the ominous signs, I often recall that day’s conversations with a smile. They seem so innocent and naive when viewed with the battle-hardened hindsight of the past twelve months. “This Easter disruption isn’t ideal but it’ll all be over by Summer” we’d confidently assert, over one of those awkward stand-up lunches where you have to balance your egg and cress sandwich on top of your glass of orange juice.
It’s coming up to a year since that landmark event, but the outlook is more uncertain than ever.
We’re housebound and homeschooling. The air corridors are sealed and UK arrivals must quarantine, possibly for 10 days in an airport hotel. Given that bleak backdrop, it’s hardly surprising there are few signs of life in the pivotal January booking period. Most operators we speak to are below 20% of their usual January levels.
Trading out of this mess will be a challenge. Battered balance sheets are struggling to cope with a year of cash outflows and asset write-downs. Unsustainable liabilities have built up as a result of Refund Credit Notes, deferred tax payments, holiday pay accruals and other assorted nasties.
Hibernating was a relatively simple equation, at least on paper. Costs were cut, power turned off, and doors locked. Starting up again is far more complicated. Timing is critical. Bringing back teams, opening up sites, turning on marketing all burn cash without any guarantees of a return.
Regulators, merchant acquirers, insurers and other stakeholders are increasingly jittery that their exposures will get worse before they get better. Their security demands are piling further pressure. For some companies, it will be limits imposed by such stakeholders that inhibit their recovery.
Yet, the long term fundamentals are firmly in our favour. Demand for travel is without question. A spike in UK savings ratios suggests there is money burning holes in pockets. And my god do we all need to get out of the house.
This year’s ABTA Travel Finance Conference is a chance to come together and figure out how we move forward as an industry. We’ll be sharing our view of the latest trends, and examining the impact that recent developments are having on the sector. We might not have all the answers by then, and the egg and cress will be strictly B.Y.O this year. Nevertheless, I hope you can join us.
Written by Martin Alcock, TTC Director.
You can view the full Travel Finance Conference agenda and register here.
As sponsors of the event, we are delighted to be able to offer you a 20% discount to attend. Please get in touch and we’ll share the code with you!
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