‘Hunker down’: UK travel firms brace as fresh storm clouds gather

theguardian.com:

Liberated from pandemic restrictions, travel firms finally looked through the worst. Yet as industry leaders jetted in for a “survivor’s celebration” in Marrakech this week, fresh storm clouds were gathering.

With their customers facing the biggest cost of living crisis in a generation, two articles of faith are sustaining the UK travel industry. One, a holiday remains sacrosanct. And two, no economic turmoil can be as bad as Covid-19.

Even with widespread airport disruption, it has been a relatively bumper year. There were double the trips of 2021, according to the travel association Abta, putting the number of people taking foreign holidays back towards 70% of 2019 levels, with tills ringing for fulfilled bookings rather than refunds or credit notes.

At the return of Abta’s annual convention, hosted by Morocco after a three-year hiatus of virtual or hybrid meetings, its chief executive, Mark Tanzer, said firms were facing a “double squeeze”. Higher interest rates and a weak pound were hiking up costs, while consumers were cutting back – and firms loaded up with debt during the pandemic could not borrow more.

Both optimism and uncertainty abound in the sector. Few want to talk down their own prospects – a snap poll of delegates at the convention suggested most still expect higher revenues in 2023 than in 2022. Dame Irene Hays, the chair of Hays Travel, said “people were returning in droves” to her company’s high street stores, while others talked of a buoyant market – at least relatively, for now.

“It has been a pretty terrible last two years,” said Tanzer. Between 30 and 40 of about 1,000 firms he represented went bust, “tragic, but numerically I would have thought more would have struggled.

“So I think there’s certainly a