Travel Money - market update - August

Travel Money - market update - August

Following on from my update in early July, I wanted to provide you with a further update and outlook now our July trading period is complete. The turbulence of the Covid-19 pandemic remains a challenge not only for our travel money services but also the travel industry as a whole. 

You will be aware that we made a decision in May to withdraw our HMRC registrations from around 3,000 branches linked to the increased costs from HMRC. Since then, we completed an analysis of June trading and as a result we re-registered around 850 branches in July so they could once again sell regulated Travel Money services. It’s worth noting that some of the branches we re-registered still didn’t see any sales. 

Overall, July saw our key on demand daily sales fall between -88% and -58% of last year, with sales data for the period down 71% overall on last year. 

Based on our ongoing mixed performance, the ongoing travel implications and the economic, government and FCO market conditions, the good news is we are looking to re-register around a further 130 branches this week. Branches have been communicated to directly this week. 

While this is a positive step, we also have to consider the ongoing effect the Covid-19 pandemic is having on the travel industry, including our travel money competitors, our own assessment of the market and the opportunity for sales to improve. 

I am sure you are all watching the news on a daily basis and understand how the slightest announcement can impact consumer confidence in relation to their approach to travel so wanted to share some recent key observations from the industry which is critical and forms part of our monitoring process.

  • Airlines: TUI cancelled all package holidays to Spain and Portugal until at least 17 August; London Gatwick continues operating from one terminal; Jet2 announced that in 2021 it will operate 20% fewer aircraft than pre-Covid levels and they suspended holidays to Portugal until at least 17 August, and there are still no holidays to Spain or Cyprus; BA announced 270 pilot job losses followed by 10,000 jobs at risk across the company; and Easyjet closed its bases at Southport and Newcastle and looks at closing Stansted as a base, while it is Increasing flights in August by 1,000
  • Travel: TUI announced 166 branch closures bringing its network down to 350 branches, and it will start selling holidays for Sharm from Feb 2021; Hays announced 800 redundancies of which around 500 are in travel money; Travelex announced 1,300 job cuts and ceased airport bureau operations; WHSmith is to cut 1,500 jobs; and 14 million adults plan to holiday on home soil 
  • Government: quarantine reintroduced for people arriving from Spain; in Greece, Covid rates are rising and it may move to quarantine; France may also move to quarantine; schools are due to start to return (already taking place in Scotland); there is an increasing possibility of a second wave in the coming months and local lockdowns could continue to be put in place across the UK.

We will be continuing to assess the travel market and related economic outputs over the coming months and I appreciate this review may be disappointing for some branches who remain paused, but it is important that we consider the whole market and consider all our branches under a consistent approach. 

I believe that the current market conditions are representative of the best performance levels we will see over the coming months and is therefore likely to mean that we will not be re-registering any further branches in the foreseeable future. It is my intention to maintain these regular updates to ensure that I keep you up to date on both the market and our performance. 

Thank you for your continued patience and understanding.