This article was written by Robert Boyle in partnership with Venari Partners.
What can UK residents expect in terms of overseas travel this summer?
After a “lost summer” in 2020, UK airlines are desperately hoping that this summer will be different. Equally keen to get away on holiday are millions of Brits, anxious to get back to their traditional overseas holidays and hoping the UK’s successful vaccination rollout will enable them to do so.
When the UK government announced its “roadmap out of lockdown” on February 22nd, it dodged the question of overseas travel, which is currently illegal for leisure purposes. All it would say was that international travel would not resume before May 17th at the earliest, and it established a “Global Travel Taskforce” to consider the question of how and when travel should be allowed to resume after that. That taskforce is due to report to the Prime Minister on April 12th.
Boutique executive search firm Venari Partners has asked me to share my views on what the taskforce might say and which destinations might be open once Brits are allowed to travel again. Venari’s aviation practice specialises in sourcing senior aviation professionals for airlines around the globe and is a great partner for airlines looking to ensure they have the right executive talent in place as the industry enters the recovery phase.
What needs to happen for overseas travel to resume?
For leisure travel from the UK to get going again, three things are needed:
There needs to be customer demand
Destination countries need to have open borders, without quarantine and without lock-down restrictions in place
The UK government must allow people to travel overseas, and to let them back in again without requiring quarantine
The first of these seems not to be in doubt. All travel companies have reported big surges in bookings whenever there is even a hint that overseas travel may be going to reopen.
I will therefore concentrate on the second and third conditions, starting with question of whether Brits will have anywhere to travel to, once they are allowed.
Will the big destination markets be open?
Before the crisis, by far the most popular destination for UK summer holidays was Spain, with 10.4m holiday visits by UK residents between April and September 2019. Almost all of these trips by air, which meant that meant that Spain alone accounted for 32% of outbound leisure air demand.
Source: ONS (Travelpac survey), GridPoint analysis.
The second biggest destination overall was France, but only 31% of those trips were by air, making it only the sixth largest air market. Greece, Italy and Portugal were all ahead of France and Turkey was only just behind.
The United States was the only long-haul market in the top ten holiday destinations. Although it was ranked only fifth, long-haul fares are a multiple of short-haul fares, so the market was quite comparable to Spain in terms of its importance to airline revenue.
The precise ranking of market importance was different for independent travellers (of more relevance for the scheduled carriers) and for those buying package holidays (more relevant to a tour company like TUI). The chart below shows the air market broken down by the two categories.
Perhaps the distinction matters less than it used to, with all the scheduled carriers pushing their “holidays” brands and the traditional charter companies selling seat only flights. But whichever way that you look at it, Spain was king of the hill before the crisis.
Source: ONS (Travelpac survey), GridPoint analysis.
What happened last summer?
Unfortunately, we don’t have the same data for 2020. Due to COVID, the Office for National Statistics (ONS) suspended the International Passenger Survey, which was the source for the 2019 data on purpose of travel and traveller nationality. However, we can look at total passenger volumes by country for August (see following chart), and it is pretty clear that Greece took over as the number one destination for UK tourist travellers. It was still down 43% on 2019, but much less than Spain which was down 88%, falling to fourth place in the rankings. Quarantine for returning Brits was introduced for Spain on July 25th last year due to rising cases in the country whereas Greece remained free of such requirements.
Note that Poland and Romania appear in this top 10 ranking mainly due to VFR traffic, which I excluded from the 2019 figures I showed earlier. They are not big leisure destinations for the Brits.
To nobody’s surprise, the United States disappeared from the top 10, as the border remained effectively shut to travellers from the UK, a major blow to long-haul airlines and especially so for Virgin Atlantic, which pretty much only flew to the USA before the crisis.
Source: CAA passenger statistics, GridPoint analysis
Which countries will be open to UK tourists?
Spain, France, Greece, Portugal, Turkey, Cyprus and Croatia have all said they will be open for UK tourists this summer. Given the progress made by the UK on bringing down case numbers and the advanced state of the UK vaccination programme, that it is easy to understand, especially for countries which are so economically dependent on tourism.
We still don’t know when the United States is going to reopen its border to the UK. Personally, I think there is a good chance that this will happen quite soon. The border is open for air travellers from many countries, including most of Latin America, and it is increasingly unclear what the objective rationale is for keeping the UK on the restricted list.
So I think there is good ground for optimism about borders being open for UK travellers. But the bigger question is whether the UK will allow its residents to travel and to return home afterwards without onerous quarantine restrictions.
Which countries are most likely to be declared “safe”
There are two considerations for the UK government when it comes to whether it is “safe” to allow Brits to holiday in any particular country. The first issue is the risk of triggering another rise in cases in the UK though importing more cases of the variants we already have. The second is the risk of importing new variants, such as the Brazil or South African variants, against which the current vaccines seem to be less effective.
Let me start with the risk of importing cases, leaving aside the variant issue. That risk depends on the current rates of community transmission in the country, and to some extent also the nationality of the overseas visitors that UK tourists might be mingling with during their vacation. I’ll come back to this latter issue, but I think most British tourists know which nationality provides the biggest competition for the poolside loungers.
Infection rates by destination market
The following chart shows the recent trends in case numbers per million for each of the top 10 destination countries. I’ve included the United Kingdom for reference.
Currently, Spain and Portugal have case numbers which are very similar to the United Kingdom, relative to their populations. Case numbers appear to be stable. That suggests that the risk of taking a holiday in Spain or Portugal should not be materially different from holidaying in the UK. That is encouraging, at least for those two markets.
The figures for all the other markets paint a different picture. In most cases, the infection rates are considerably higher than in the UK and also on a rising trend. Most of Europe is only now being hit by the UK variant, which caused such an increase in cases in the UK in December and January. That took 2-3 months to get under control in the UK. The vaccination programme in the EU is also about 3 months behind the UK, so perhaps it will take until around the end of June for case numbers to get down to lower levels. That could mean these countries being declared “safe for travel” from around July onwards. Coincidently, this is about the time that all adults in the UK should have received their vaccinations.
The picture in the USA is the least clear. After Spain and Portugal, it has the lowest case numbers and the trend until recently was down. Given the rapid rollout of vaccines there, you would think that there are good grounds for optimism. However, many States appear to have “jumped the gun” on relaxing restrictions and case numbers are beginning to climb again.
Last summer, the UK set a threshold of 20 weekly cases per 10,000 population as the hurdle above which quarantine would be required on return to the UK. That equates to 29 daily cases per million people. Even Portugal, which at 46 daily cases per million has the lowest rate amongst this group of countries, is above that threshold. The same is true of the UK itself, which stands at 81. But the case rates are almost certainly not comparable with figures from last summer, due to the massive increase in testing. Adjusting for this, perhaps the rates in Spain and Portugal would now be deemed “low risk” by the UK, despite being above last year’s threshold.
The different rates of testing across countries also creates comparability issues for the case rate figures. Countries with low rates of testing will almost certainly be under-reporting cases.
So it is worth also looking at another measure of infection rates, the “test positivity rate”, shown in the following chart. If all countries had the same approach to testing, it would be a good measure of relative infection rates. The metric is impacted by testing rates, but in the opposite direction to how they impact reported case rates. All countries tend to concentrate their testing on people with symptoms and on contacts of known cases. Countries with very high levels of testing are much more likely to be testing people with no symptoms and no reason to believe they have been exposed. So many more tests will be carried out on uninfected people, depressing the test positivity rate. If a country comes out low on both metrics, as is the case for the UK, that’s a good sign of low actual infection rates.
Portugal again comes out well on this measure, although it now shows as somewhat higher risk than the UK. Conversely, Spain looks rather higher risk based on this metric, suggesting that the relatively low case numbers are partly due to lower rates of testing.
Cyprus is an interesting case. It came out worst for cases per million people, but it is the best of the top 10 destinations in terms of test positivity rate. Residents are being required to take a test every week, so the test positivity rate of 0.8% should be a really good estimate for the population prevalence. The UK estimates prevalence through randomly sampling its population every week and the equivalent figure is around 0.3%. So Cyprus does seem to be worse than the UK, but not by anywhere near as much as you might imagine from the reported case numbers.
All of this demonstrates the difficulty for the UK government in deciding on the level of infection risk by country. At the moment, I would say that amongst this group, Portugal and Cyprus stand the best chance of being declared “safe”, with Spain perhaps hanging in the balance.
None of the other EU countries seem to me to have low enough rates of infection to be considered safe by a UK government which is erring on the side of caution. That may well change over the next 2-3 months as the vaccination programmes roll out and countries get this wave under control, but I expect the best we can hope for will be a “wait and see” approach from the UK government when it announces its overseas travel policy on April 12th.
What about the Germans?
As I mentioned before, the other risk of holidaying abroad is the infection risk from mixing with tourists of other nationalities. Other than the UK, the big origin countries for tourism in the Mediterranean are Germany and France. We’ve already seen that infection rates in France are currently high and rising. Germany has also been seeing rising cases and currently has a test positivity rate which is as bad as France.
Assuming that Spain continues to require a negative COVID test prior to departure for foreign tourists, that should reduce the risk by around 60%. However, current infection rates in France are close to four times those in the UK, so even a 60% reduction in risk will still leave exposure to foreign tourists as a risk factor compared to holidaying in the UK. Will that be enough to tip the balance for the UK government against allowing travel to Spain and Portugal? Maybe.
One of the big worries for the UK is importing cases of new variants, especially those such as the South African and Brazilian variants, against which the current vaccines seem less effective. Whilst I am sure that travel from South Africa and Brazil will remain heavily constrained, we know that such variants can enter the country via many routes. Keeping travel suppressed on a broad basis is one of the key tools for avoiding this.
Portugal came out very high on the list of likely “safe” destinations in Europe. The big issue though is that this is the country in Europe with the biggest links to Brazil. The UK has only just removed the country from the “red list” of countries from which entry into the UK is currently banned. Allowing millions of Brits to holiday there over the summer would be a much bigger step.
The government’s advisors may also see the US as potentially high risk from the perspective of variants. The Brazilian variant has definitely been identified there. Unfortunately, the US does not have a high level of genomic testing, so it is hard to know how prevalent such variants are. Once again, a precautionary approach may be applied in the absence of solid data.
Politics and public opinion
I will admit that I may have been misleading you into thinking that the decisions on reopening travel will be based on data, analysis and balanced risk assessments.
We all know that politicians, and especially the current “populist” UK government will follow whatever policy they think will be the most popular amongst voters. So I have left perhaps the most important piece of data until last. What do the people say? My final chart shows the level of support in the UK over time for stopping all inbound flights and for requiring all inbound airline passengers to be quarantined.
You can see that the latest poll from March 21st says that 70% of people support a policy of quarantining all inbound airline passengers. 50% of people support stopping all inbound flights. Those figures have generally been falling recently, but I’m sure that politicians will see this as a mandate to be cautious. Politicians and their advisors have been heavily briefing the media not to expect any early reopening of overseas travel and only two days ago the government announced that Brits would face fines of £5,000 if they holidayed abroad.
Given all of the above, I think there is a good chance that when the taskforce reports, the government will simply extend the blanket ban on overseas leisure trips until later in the year, probably until June 21st. That is the “Step 4” date at which the government is hoping to remove all legal limits on social contact. Once again, I would expect them to say only that overseas travel will resume “no earlier” than that date.
Perhaps they will delay things further and create a new “Step 5” milestone for the reopening of overseas travel, five weeks after Step 4, so “no earlier than” July 26th.
Whatever date they give for the earliest time at which the blanket ban will be lifted, they will likely outline a “traffic light” selective approach for different travel destinations, such as the following.
RED: All travel remains banned. These will be places where case numbers are high and/or where “variants of concern” are present.
AMBER: Travel is permitted, but passengers must test negative before departure and quarantine on arrival, quite probably hotel based.
GREEN: Travel permitted without quarantine, provided the traveller is vaccinated or has obtained a negative pre-departure test
Unless the government surprises me and lifts the blanket ban from May 17th, which destinations will be in which categories will probably be left for later. If they do go ahead and reopen from the May 17th, expect the initial green list to be short and populated mainly with countries where the borders remain closed (like Australia and New Zealand), or with places you have never heard of and have no desire to visit. If we are really lucky there will be one or two attractive destinations like Cyprus or parts of Spain.
My guess is that airlines and would-be travellers will continue to have to live with ongoing uncertainty for at least another couple of months. The best hope is that vaccine supply issues start to lift and the seasonal impact on case numbers in Europe makes a much fuller reopening possible from July onwards.
Let’s hope that the weather in the UK is good this summer, as that may be the best chance we all have of getting some sunshine.