Simon Calder: Panic around the planet – except with the British
Saturday 02 May 2009
The wine started flowing well before 5pm. Any industry get-together can be made more convivial with the addition of some not-too-cheap plonk. In particular the prospects for the travel business, which likes to think of itself as the industry of human happiness, look brighter through rosé-filled glasses. But anyone who overdid the free booze at Wednesday's AGM of Abta, the travel association, would have rapidly sobered up once Ian Oakley-Smith took to the platform.
His business card shows him to be a director of PricewaterhouseCoopers. He is also, however, a licensed insolvency practitioner – a corporate undertaker, if you will.
Mr Oakley-Smith was invited by Abta to advise tour operators and travel agents how best to avoid calling on his undoubtedly expert embalming skills. He hit on the blessing, and bane, of the travel industry: it is intrinsically "cash-positive". You and I hand over money months in advance for the exquisitely intangible privilege of anticipating our days in the sun, sea or spa. The holiday company then has to deliver a reasonable approximation to our expectations, but does not normally pay its suppliers until after we have arrived home. A finance director's dream – until September, when the advantageous arithmetic unravels. The peak-season bills come in to devour cash, while the flow of new bookings is as dry as the Association of Saudi Travel Agents' AGM.
"It's not going to be pretty," warned Mr Oakley-Smith, who expects "A reasonably steady stream of failures from the autumn onwards."
Probably on Friday afternoons, if past experience is anything to go by. Proprietors of travel firms in trouble usually spend the week talking to prospective lenders and buyers; if these negotiations prove unsuccessful, they throw in the towel shortly before the weekend.
Before that autumn gloom, though, the summer season stretches ahead alluringly. This weekend is when the holiday companies ramp up their operations to peak capacity. They predicted a drop in demand this summer, due to a plummeting pound and intensifying recession, and reduced capacity to match it. But they added extra holidays to destinations that were selling well: Turkey, Egypt – and Mexico.
The Mexican wave of summer charter flights was due to begin this week, more than doubling the number of British package holidaymakers on the "Riviera Maya" of Mexico's Yucatá*peninsula. The planes from Gatwick and Manchester have been taking off, but without passengers on the outbound flight; they were despatched to retrieve holidaymakers already at the resorts.
In a week in which panic around the planet has proved contagious, British tourists in Mexico showed commendable calm. Of 3,000 Thomas Cook clients in and around Cancún, only about 80 enquired about the possibility of curtailing the holiday and coming home early. But when the rest fly home, they will leave behind a nation where the human tragedies perpetrated by swine flu are being compounded by the collapse of the tourist industry.
"Widespread death, illness, social and economic disruption": the prediction from the World Health Organisation. But not from this week; that forecast was made four years ago, during the avian flu scare. Some senior figures in the travel business have privately said they believe there has been an overreaction to the emergence of swine flu. And a few have gone public.
"People holiday all over the world to countries with endemic diseases such as cholera, malaria and hepatitis," said Paul Goldstein of the adventure operator Exodus.
"Not one British tourist has died or is even seriously ill from swine flu. Yet the already battered travel industry is given a rabbit punch by this so-called "pandemic". I am glad that we have not been inundated by hysterical passengers wanting to cancel through ignorance."
Next, I consulted Michael O'Leary, chief executive of Ryanair. I did not ask for a check-up, but he gave me one anyway. "You'll be fine," he pronounced, revealing hitherto well-concealed medical expertise.
"Nobody's going to die of swine flu, in much the same way as no one in Europe died of bird flu either," he told me. "It's a completely manufactured thing by 24-hour news programmes, taking pictures of people running around in face masks."
"He would say that, wouldn't he?" responded my final witness: Professor Stephen Field, chairman of the Royal College of General Practitioners. "Let's hope he's right, but influenza – even if it's seasonal influenza – kills. Until we know more, the most important thing to do is to keep it out of the country."
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