Insider

Saving the sector, safety first

For those of us still racking up the travel miles the current state of the world makes for interesting comparative viewing. Never before in this hack’s memory have the differences between countries been as pronounced, as we get a genuine benchmarking opportunity between regimes. Same challenge, different governments, data points unleashed.

And this is reflected on the streets. The centre of Paris is vibrant in the sun. Restaurants have moved   outside into sunny gutters, luncheon vouchers being brandished by the hungry locals. As the summer holidays kick in the city will drain and will not, looking at current infection rates, fill up with Americans. But the mood behind the tills is chipper, with an €18bn tourism support fund in play.

Contrast with central London, where the occasional Pret is open to grey skies and smatterings of office workers hurrying between the drizzle, outnumbered by builders. Try and find somewhere to get some coffee and wifi of a morning and nothing doing. Most of the hotels are closed, overseas guests deterred by government policy with more inconsistencies than homemade custard.  Will this change when Rishi Sunak’s meal vouchers kick in during August? It remains to be seen whether restaurants will open just to enjoy a possible bounce from Monday to Wednesday.

Central London is a special case. Unlike many mainland European cities, years of peculiar planning and perky house prices mean that no-one lives there. Unless people are in offices, they’re not lunching out. And few employers are willing to take any risks with their employees until September at the earliest. As for a drink at lunchtime, aside from possible exposure to the virus, having to register your name and address means that, if anyone else in the pub tests positive, you’re facing two weeks isolation.

This is not a happy picture for the sector and credit to Rishi Sunak for not taking the usual route and ignoring it in favour of manufacturing, but trying to keep it, at the very least, ticking over. And is this all the fault of England’s government? No. Paris and its favourable weather aside, talking to other members of the global hotel community reveals that, after that first joyous meal out, being served by mask-and-glove-wearing waiters only serves to remind the eater of the risks. Throw in concerns about job losses, a lack of expense-based travel and lunching (and, one suspects, imminent tax rises) and wallets are remaining closed.

Sunak’s decision to cut VAT was one which the sector has been brewing for decades and the hope was that it will become permanent. It will be needed. But soon the balance will not be between health and business, but between health, business and tax take. As one non-enterprising MP noted, you don’t want businesses to get used to handouts. Heavens no, can you imagine.

But handouts - massive ones - will be needed, along with protections around rent, if we want to see the sector come out the other side looking like it did on the way in. There are some who mutter that it had grown more than was necessary of late and maybe it was too big. Looking at the potential for travel growth suggests this was not the case.

What unites the consumer around the world, whatever government is doing, is safety. The grand reopening has been a damp squib for city centres, but more vibrant for leisure destinations and the sector’s recent transactions have underscored this move out of the urban. But a subdued element remains, reminding us that, even with the most positive take going, this is going to be a slog. And offering vouchers and price cuts are not going to overcome health fears.

The next phase of the pandemic is now with us and, even for the most optimistic, it’s hard to work out where large-scale demand is going to come from. Efforts to prove safety remain paramount. Hotels have created some comprehensive cleaning protocols, but it is apparent that, until a vaccine is found, gallons of cash will have to come into the sector. Then we will see how much global appetite for travel is matched by governments’ appetite to support it.