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May 2, 2022

Passport chaos: Delayed passport applications are set to cost UK holiday makers over £1.1 billion this summer in cancelled trips

Just as the last of the Covid-related travel restrictions have eased both in the UK and in popular holiday destinations, a new problem has emerged for hopeful travellers – passport processing delays. In 2020 and 2021, more than five million people delayed applying for a renewal as they were not planning international travel in the midst of the pandemic.[1] Now that international travel has largely normalised, the number of people applying for passport renewals has surged which, combined with various reported inefficiencies at the HM Passport Office, has created significant delays.

The delays are a problem not only for the applicants themselves, but also for the travel sector which is desperately trying to recuperate the losses which have accumulated over the past two years. The sector was among the most impacted by the pandemic, with estimated losses totalling $168 billion in 2020 alone.[2]

Since April 2021, the Government has advised people to allow up to ten weeks when applying for their passport, although many applicants have encountered even longer delays. In previous months, TNT UK, which has a £77 million contract with the Passport Office, has struggled to keep up with the demand for its delivery services. Most recently, the Government has brought in Royal Mail and DHL to help ease the backlog, but it may have come too late for some holidaymakers.

The potential losses to households are substantial. Cebr estimates that the cumulative loss for UK consumers stands at £1.1 billion, due to holiday cancelations. After two years of lockdowns and severe travel restrictions, there is significant pent-up demand for overseas travel. Data from the VisitBritain Covid-19 Consumer Sentiment Tracker shows that more than two in five are planning an overseas trip in the coming 12 months.[3] Assuming that passport holders are somewhat more likely to have travel plans than the population as a whole and that a quarter of those will have made a booking leaves just under 1 million holiday makers at risk due to the delays. How many of these passports will actually not be renewed and returned to their owners is difficult to estimate and also somewhat dependant on what measures the Passport Office takes to alleviate the situation, but based on current reports we have assumed a 50% probability of a successful and timely renewal process. [4] Multiplying the resulting number of passports at risk with the average cost for a family holiday of around £2,400[5] suggests a cumulative loss of over £1.1 billion. If families aren’t able to get their money back, that is equivalent to a 5.4% loss of total yearly income for two adults working on the average UK yearly salary.

Even those renewal applicants that don’t face cancelled holidays may find themselves out of pocket due to having to upgrade to faster application options. The standard cost of renewing a passport is £75.50, while the fast-track service is nearly twice as costly at £142, with the fastest premium option priced at £177. Cebr estimates that this could cost households approximately a further £9.5 million[6] cumulatively if they choose the premium service.

Further adding to the surge in demand for new passports, are additional rules on UK passport holders traveling to the EU after Brexit. Passports must be less than 10 years old on the day you enter the EU, and your passport must be valid for at least three months after the day you plan to leave.

A silver lining might be that some UK tourism hotspots can benefit from holidaymakers choosing to vacation in the UK rather than gambling on getting their passport back in time. Overall, however, the UK travel sector is likely to take yet another hit following a tremendously difficult period during the pandemic. And many holiday makers who hoped to make their first overseas holidays in three years will be left disappointed.

[1] https://www.gov.uk/government/news/allow-up-to-ten-weeks-to-apply-for-a-british-passport

[2] https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/taking-stock-of-the-pandemics-impact-on-global-aviation

[3] https://www.visitbritain.org/sites/default/files/vb-corporate/covid 19_consumer_tracker_report_wave_45_final.pdf

[4] This calculation starts with the Government estimate of five million passports are at risk. The assumption is based on 65% share of passport holders wanting to go abroad and a quarter of these passport holders have already booked a holiday. Finally, we assume that 50% of passports do not come back in time.

[5] Based on figures from Expedia as quoted here: https://www.standard.co.uk/escapist/travel/average-cost-family-holiday-a3907191.html

[6] This is under the assumption that 10% of passport holders wanting to go abroad who have booked a holiday choose the premium service.

For more information please contact:

Shushill Suglani, Senior Economist Email ssuglani@cebr.com Phone 07907 150289

Cebr is an independent London-based economic consultancy specialising in economic impact assessment, macroeconomic forecasting and thought leadership. For more information on this report, or if you are interested in commissioning research with Cebr, please contact us using our enquiries page.

Cebr Response to the Monday 2 May 2022 Home Office Comment to the Above Note

Our estimates on the possible cumulative cost of cancelled holidays due to the reported delays in passport renewals, makes use of the government’s own figures on the extent of the backlog.

Cebr has made the assumptions behind its calculations clear and noted the difficulty associated with estimating the share of the application backlog that will be processed in a timely manner.

The Cebr note on the topic states:

‘How many of these passports will actually not be renewed and returned to their owners is difficult to estimate and also somewhat dependant on what measures the Passport Office takes to alleviate the situation.’

The Home Office response to our note suggests they have a far more optimistic view of the current delays being promptly resolved, before the situation escalates further. While acknowledging the uncertainty around our assumptions, we have been guided by the best information currently available and stand by our note.’

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