“There could be up to 3,000 redundancies in the coming weeks from the travel business alone, if nothing is done.” That was the sharp and urgent message given to Paschal Donohoe TD, Minister for Finance, last Tuesday, 4 August, in the following letter sent by Dublin-based travel agent John Galligan.
We operate a (heretofore very profitable) retail travel business in Sandyford Office Park. Since March our business has been decimated due to the travel restrictions surrounding the Covid-19 outbreak. With government bodies telling everyone not to travel abroad, we see nothing happening before 2021 – a full six months away and almost a year after this started.
Right now, we are facing an urgent, fundamental decision about whether we close our business or make everyone but myself redundant and struggle on in business as a one-man-show. This decision is being mirrored within travel agents all over the country, in every town and village, the length and breadth of Ireland – over 200 of them, employing 3,500 people.
Our SMEs are rooted in the community, providing the type of employment that stays in rural locations over the decades, rather than ups and leaves as soon as profits dip or things get rough. We are small business owners, with Irish accents, typically employing less than 10 persons each, and we operate in the services sector. After over 40 years in business, I have concluded that, in the eyes of senior civil servants and politicians, we are the lowest form of caste and are the ‘least deserving’ of any kind of state support, in their eyes. We have seen clear evidence of the terrifying public sector mindset only last week, when it was proposed to exclude SME owners from the new EWSS altogether.
Because we are small and disparate, we have no cohesive voice and are easily discriminated against and have been ignored, consistently, throughout my career. In all those years, the only time the public sector has ever done anything meaningful for our business has been the introduction of the TWSS at €350pw. That allowed us to retain all our staff for the past few months. My staff and I have taken a huge drop in salary, as the company cannot afford to top up the TWSS and are all surviving on €1,500pm, which is subject to deferred Income Tax, PAYE, PRSI, USC, etc. in any event. But now that support is about to be cut dramatically to a level that is unsustainable for me and for our staff and the ‘decision’ mentioned above has to be made in the next few days, prior to its alteration to the EWSS at €203pw.
Unlike most businesses, our turnover (and that of all travel agents in Ireland) has not only reduced by 100% but has actually gone into negative turnover and negative gross margin, as we unwound all the sales we made in the previous six months and refunded our clients. Meanwhile, we have done everything imaginable to slash our overheads to the bone. Our staff represent 60% of our costs and the TWSS, without top-up, allowed us to remove that part of our costs and continue to bump along with negative turnover for the past five months.
We secured a rent holiday from our landlord, but that has ended and other overheads, like insurances, bonding, telecoms, etc., still have to be paid. Even with our stripped down costs, including TWSS at its current level, we are burning cash and expect that to continue until 2021. We developed a plan to make it through to 2021 with the TWSS in place but, with it soon to be ended, we (and almost every other travel agent in the country) have to take immediate action. There are over 200 of us. Projected turnover in the industry for the year was €1.2bn and we employ about 3,500 people. In normal circumstances, we contribute handsomely to the exchequer through PAYE, PRSI, USC, VAT, Rates, etc.
From speaking to colleagues, I understand that given the TWSS will be withdrawn in a few weeks, they are planning to immediately make (almost) all of their staff redundant and ride it out until January with just the proprietor in situ. Like us, their balance sheets have been decimated and we are all unable to fund redundancies, so that bill will be handed to the Department of Social Welfare.
There could be up to 3,000 redundancies in the coming weeks from the travel business alone, if nothing is done. Were that to happen in a multi-national there would be uproar, but we are SMEs, so what matter? Each one of those employees will cease to be available to pay PAYE, PRSI, USC, etc and will instead be drawing Jobseeker’s Allowance. The lost taxes and cost of the social welfare payments will be enormous. Also of grave importance is that the entire indigenous Irish travel business will be wiped out, leaving almost no Irish travel agents in place – and this will have a profound effect on competition in the future. It will also hit small towns disproportionately as even more badly needed jobs disappear.
All this is inevitable unless support is given immediately to the indigenous (SME) travel industry. I am asking you to use your influence to seek immediate supports for the retail travel agents of Ireland. We need substantial grant aid to see us through to 2021, while you and your colleagues are telling our clients not to buy anything from us. The alternative is extinction of the entire travel business in Ireland and all the jobs that go with that. Please do not dismiss this as bluster. Within weeks all this will come to pass, unless something is done. Please support our case.
Ours is not a ‘normal’ case. Very few industries have had negative turnover for the past five months, with the same expected for the next six months. Those with a -30% dip in turnover are entitled to the same supports proposed in the EWSS as a company like ours with a catastrophic -125% turnover. We are a special and urgent case. Please give this your immediate consideration. Please support ‘SAVE TRAVEL’.
I know the Dail has just risen for holidays but this won’t wait. I am available to discuss this at your convenience, if you wish. If possible, please bring along the senior civil servants who devised and the politicians who signed off on excluding SME owners from the EWSS last week. I would love to meet them.