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Will the Brits get an overseas break this summer?

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:

  1. There needs to be customer demand

  2. Destination countries need to have open borders, without quarantine and without lock-down restrictions in place

  3. 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” o