Who would have thought it? Travel, an industry that has been so hugely affected by the pandemic was, in fact, the second-fastest-growing sector in terms of new travel businesses being formed in 2020. Working with travel businesses ourselves, we decided to ask some of our clients in the travel sector why they think there has been such a surge in new travel businesses opening.
There were 746,917 business incorporated in 2020 according to data provided by BVD (Bureau van Dijk), 111,141 of those were travel and tourism businesses.
What we found from having these conversations is that a lot of startup travel businesses were and still are anticipating a huge boom in both staycations and international holidays when travelling abroad is allowed again.
Research by Hoo, the online hotel room offer platform, has found that the level of staycations being taken across 16 global holiday hotspots has increased by an average of 18% when compared to this time last year. Therefore it is clear that these newly formed travel businesses in the UK are hoping to cash in on the resurgence of holidays which many hope will happen in 2021.
The fastest-growing sector in the UK during 2020 was the business services sector with a total number of 157,524 being formed in this sector.
The worst performing sector which is also fairly surprising is the computer software industry. Given the digital transformation many businesses faced and are still facing during the pandemic you could be forgiven for assuming that computer software would be one of the fastest-growing markets during the pandemic but in 2020 next to no one was starting a computer software business according to the data.
What makes this all the more surprising is the other data that accommodates it. Below is further information about how the travel industry was affected in 2020: (Data by ONS)
- Accommodation and travel agency businesses saw the sharpest decline in turnover during the first national lockdown, falling to 9.3% of their February levels in May 2020.
- Monthly air passenger arrivals to the UK fell from 6,804,900 in February 2020 to 112,300 in April 2020, a fall of 98.3%.
- In travel and tourism industries overall, the number of people aged 16 to 24 years saw the largest fall in employment of any age group between Quarter 3 (July to Sept) 2019 and Quarter 3 2020.
It is clear to see from the data that the travel industry took a massive hit in 2020 but it was not all doom and gloom, with over 100,000 travel businesses starting up in 2020, clearly, there is a lot of optimism for a huge bounce back in 2021 providing international travel will be allowed.