The boss of Hays Travel has said the imposition of quarantine on holidaymakers returning from Spain has destroyed a recovery in the travel sector.
John Hays said the Government’s introduction of mandatory quarantine times of 14 days for those travelling to mainland Spain, the Canary Islands and the Balearics had been too blunt.
His firm had recovered to around half of last year’s tradition levels before the move but has had seen demand drop again, as well as having to contact tens of thousands of customers to help them with new arrangements.
Holidaymakers face paying a £1,000 for failing to quarantine, and tens of thousands of families were caught out by the swift introduction of the rules as they were already on holiday, while thousands more have seen their plans for trips abroad dashed as airlines including Jet2 cancelled flights.
A coalition of 47 airlines, airports and tourism leaders wrote to Boris Johnson this week calling for a “more nuanced approach” to quarantine measures – and Mr Hays said the sector’s response has been right.
Mr Hays, who together with his wife Irene has been on self-imposed minimum wage since the start of the crisis, said: “It’s been a nightmare. We have done better than most but I think the pandemic has damaged every travel business in the world.
“We had hit some small milestones at the start of July and a week ago had got back up to 50% of like-for-like sales, with more people making bookings and booking for later in the year or next year – then the world changed again when the Government brought in the quarantine roles. What it has done is knocked that consumer confidence to go away.
“All those figures, in terms of new business, are now way less than half what we did a week ago.
“Some don’t want to travel and I 100% understand that and we fully support those customers, but others have been so looking forward to their summer holidays in August, children have got their new summer dresses and swimming costumes and were looking forward to getting to the beach, and those plans have been dashed. I feel so sorry for those families.”
His comments come as latest accounts show Hays Travel absorbed a major hit to its profits following last year’s £7.4m acquisition of shops from collapsed holiday giant Thomas Cook.
The Sunderland firm became the UK’s largest independent holiday business when Mr Hays and his wife Irene, the firm’s chairman, acquired the former Thomas Cook retail portfolio of 555 shops and took on its former employees.
Now published accounts for the business, for the year ended October 2019, has shown that the firm’s pre-tax profit including exceptional items was more than halved – from £11.6m to £4.9m – as it took a hit from the acquisition. Operating profit also dropped from £10.02m to £3.1m.
The accounts show the firm incurred one-off costs of £3.4m when it entered into a licence to occupy the Thomas Cook shops, reflecting rent, rates, service charges and employee costs.
In addition, the impact of the failure of Thomas Cook contributed to a 10.2% reduction in overall profit during the year, the firm said.
Turnover, however, rose from £218.44m to £240.6m and total sales topped £1bn for a second year running, coming in at £1.125bn, a rise on the previous year’s £1.037bn.
The firm had an average of 1,465 employees in the year before it brought former Thomas Cook employees on board, which more than doubled its workforce to around 4,000.
The group has 579 retail outlets since the acquisition – a big leap on the 139 retail shops it had in 2018 – and three call centres, and it also operates the Independence Group of 279 independent travel agents, with the new shops giving it a presence in England, Scotland, Wales and Northern Ireland.
The year also saw the firm move all head office staff, previously spread over four buildings, into new headquarters at Keel Square in Sunderland.
In a report accompanying the accounts, Mrs Hays describes a disruptive year for the travel sector in 2019, which has been compounded by the corovirus pandemic.
She said: “It was a turbulent year for the travel industry with the collapse of Thomas Cook on September 23.
“On October 8 Hays Travel acquired a nine-month licence to occupy the former Thomas Cook 555 retail shops and acquired the retail customer database for total consideration of £7.4m.
“The acquisition represented a transformational change for the group. We have since on-boarded an additional 2,500 colleagues into the retail shops and head office to support the enlarged business.
“The majority of the Thomas Cook shops were profitable and we see significant opportunities in driving economies of scale to reduce costs and improve commercial revenue margins.”
Looking ahead, Mrs Hays said the firm is in a strong position, with a well-funded balance sheet with no debt or overdraft facilities, and an experienced management team who have previous experience of navigating through times of challenge and taking remedial action where necessary.
She added: “The board recognises that the next year is going to be one of the most challenging for the business in its 40-year history, however, we have a strong balance sheet and a robust plan in place. With strong governance, as well as the capability and strength of our colleagues we will support our customers and our country at this difficult time.”