Scots travel firm plans for future after sealing lifeline funding deal

Macs Adventure, which offers bespoke walking and cycling trips across the UK, Europe and beyond, had been forced to cancel many of its holidays after restrictions on travel were imposed in March, in light of the Covid-19 outbreak.

The company has put “90 per cent plus” of its 58 Scottish-based staff on furlough after bookings came to an abrupt halt. But it has been given headroom after securing £1m from Barclays under the Coronavirus Business Interruption Loan Scheme (CBILS), which founder Neil Lapping said gives the business “good coverage all the way through into next year”.

While Mr Lapping said it will be at least July before any of the tour company’s trips go ahead, the business has been boosted by the willingness of customers to defer their holidays. He said: “We are refunding about 10%. The other 90% of people still want to travel. They are taking the option of either postponing their trips or refund credit notes. The positive thing is there is a real appetite for people to travel.”

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Although the funding has helped safeguard his company’s immediate future, Mr Lapping said he does not expect to see much revenue recovery this year. In-bound air travel to the UK is unlikely to be restored quickly after plans were announced by the UK Government to impose a 14-day quarantine for travellers arriving by air, while ongoing social distancing measures mean it will be some time before a “high-quality experience” can be delivered in the domestic travel market.

He added: “We are just trying to get ourselves into a position where we can bounce back next year, when hopefully this will all be a distant memory.”

Mr Lapping said his experience of applying to the CBILS suggested the banks had responded to the negative feedback they received in the days immediately after its launch, when they were roundly criticised for not lending to businesses quickly enough. The key change occurred when the banks stopped requiring personal guarantees on loans above £500,000, which he would have been unable to do as “all our money is in the business” because it is still in the “growth phase”. Having lodged his application on a Saturday, the funds were in his bank the following Friday.

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Mr Lapping added: “To be fair, I don’t know if that is a cross-the-board experience. The really positive thing for me is we were very much a viable and profitable business based on 2019 accounts. We had strong EBITDA (earnings before interest, tax, depreciation and amortisation). That was very much what the decision was based on.”

However, he expressed frustration that tour companies do not qualify for the one-year holiday from business rates that retail, leisure and hospitality firms are entitled to. He notes his business, which pays £46,000 a year in business rates, supports “hundreds and hundreds” of hoteliers and small suppliers in Scotland.

Prior to the pandemic, Macs organised up to 700 tours a year, catering for 30,000 customers.

Mr Lapping said: “If the Scottish economy loses a business like us, it has a huge ripple effect in the broader economy.”

He also called for “common sense to prevail” under the terms of the extended furlough scheme, expected to be detailed by Chancellor Rishi Sunak today, to account for businesses that still have no revenue coming in but bills to pay. A gradual winding down of the scheme would be preferable, he added.

Gordon McKean, relationship director at Barclays, said: “We were able to quickly provide the support required by Macs Adventure, which has been impacted in a large way by the pandemic. This successful operation and valued client employs a number of people in Scotland and so we were pleased to be able to provide measures to safeguard the business during these challenging times.”