- Travel, a meaningful part of modern life, faces redefinition following pandemic
- When COVID-19 threat subsides, demand for travel will come back, say experts
- An army of researchers now racing against time to develop a COVID-19 antidote
- Emirates has become the first airline to conduct on-site rapid COVID-19 tests for passengers
Dubai: Travel is a meaningful part of modern life. We all love it. Or, make that loved it.
When a safe, effective treatment (pill, vaccine or therapy) is out, and signs point to the reduction of COVID-19's virulence to that of the seasonal flu, the travel industry will fly again, say experts.
Until then, what would be the likely scenario for the industry?
An army of researchers are racing against time to develop an COVID-19 antidote. In the near future, mass manufacturing would eventually make a reliable COVID-19 test as affordable, perhaps even cheaper, than a pregnancy test kit.
Author and veteran aviation journalist Dan Reed, writing for Forbes, holds a rather optimistic view: “One thing, though is for sure. Travel demand will return."
So it’s not a question of if, but when. Optimism, like credit, is good. But, demand, like cash, is what the industry needs. And it’s not there.
What is the impact of the coronavirus on global tourism industry?
There are various estimates. One estimate shows that it’s down by as much as 95% percent from a year ago.
Another estimate given by the head of Global Tourism Forum (GTF) shows the cost to the global tourism industry is $1 trillion in lost revenue, not to mention the millions of job cuts worldwide.
$ 1 testimated cost (in trillion dollars) of coronavirus pandemic to the global tourism industry is $1 trillion in lost revenue
Bulut Bağcı, the managing director of the GTF, said the global tourism market averages revenues of $1.7 trillion annually. Due to the outbreak, industry losses have already reached $600 million as of March 2020. "We believe the loss will reach at least $1 trillion by the end of the year," he said.
Will 'COVID-19 passports' be required?
It's not clear.
It was on the agenda during the April 29 videoconference meeting of European Tourism Ministers (27 member states attending).
It's one of the ways being discussed in other jurisdictions in a bid to find a way to restore tourism, an industry which has been one of the most affected sectors by the pandemic.
Will pre-departure COVID-19 tests be the 'new normal'?
It's an open question. But certain airlines, or airport authorities, are already using tests in addition to thermal screening.
Emirates has become the first airline to conduct on-site rapid COVID-19 tests for passengers. On April 15, it started using the rapid test kits on passengers as part of pre-departure protocol, with results available in 10 minutes.
The move, carried out with the Dubai Health Authority (DHA), was done as part of repatriation flights.
Ahead of a COVID-19 antidote, what questions do industry analysts ask themselves in modelling demand revival?
- How much travel demand will come back?
- When will it return to its pre-virus levels?
- Will demand patterns, including the split between business and leisure travel demand, be different than before?
- How will the entire travel experience, from shopping for services to the quality of services delivered, be different?
The answers are interdependent, like several interlinked stories. The key factors involved in any demand and supply equation — price, capacity, perceived value of the various aspects of travel experience — are all highly variable. The biggest variable right now: COVID-19 antidote.
Will demand for travel return? If so, when?
One thing is for sure: Travel demand will return, say industry experts.
IdeaWorks tracks industry data to provide insight into various ways that airlines, hotels, rental car companies and other travel industry service providers.
Jay Sorensen, president of IdeaWorks, a respected travel industry analyst, also believes that the demand will return.
How many jobs does the travel industry generate?
Globally, it generates about 330 million jobs — directly or indirectly — or 1 out of every 10 jobs in the planet.
How will it affect the industry?
In the travel trade, experts say much will remain the same, though elements of it will be very different.
Among the expected changes are:
- States may require 'COVID-19 passports', in one form or another, as proposed by the EU
- Wider use of pre-departure rapid coronavirus test possible, as spearheaded by Emirates in Dubai
- Guests will more keen to rate/review sanitation standards in hotels
- Job cuts expected in the short term
- It will take some time for cruise ship industry to recover, with tens of job cuts expected
- Asia is expected to be the hardest-hit region
He listed eight ways that he expects travel in the post-COVID-19 era to be different than before.
What will be different?
Due to the unfortunate turn of events triggered by the coronavirus contagion, some airlines, hotels, tour companies, attractions will have to do a major belt tightening.
It’s a domino effect: As non-travel industry companies cut spending on travel for their employees who previously traveled to do their jobs, pouring billions of dollars into the global travel industry, this will affect demand.
It’s an unprecedented situation: Travel spending has simply evaporated.
The World Travel and Tourism Council projects that up to 50 million jobs in the global travel and tourism sector is at risk, with travel likely to slump by a quarter this year, Asia being the most affected continent.
50 mnumber of jobs in the global travel and tourism sector threatened by the pandemic: World Travel and Tourism Council
This 2020, for travel companies will undoubtedly face unprecedented losses. A greatly diminished financial performance may be around for several quarters to come.
The long and short of this story: Travel capacity and inventory will shrink, driven by business downturn.
What about demand for leisure travel?
There are two levels of travel demand, according to IdeaWorks’ Jay Sorensen.
- Upper class
Among business travelers, they will fly to where their business needs them. They are less influenced by distance and perceptions of health-related risks tied to big cities.
Still, experts expect post-COVID-19 period to be mostly focused on shorter travel within regions.
- Lower and Middle class
Over the next few months, perhaps even years, those in the middle and lower classes will spend less, possible down to zero, on leisure travel, according to Sorensen.
This segment is likely to face financial burden due to the coronavirus lockdowns which resulted in the near-shut down of economies.
What will airlines do with excess capacity at this time?
It’s a wait-and-see period. It’s possible that some airlines will scrap older planes. Bringing back some of the currently grounded planes may be a slow process.
Uptake of new aircraft may also be slow, or downright lead to rejections of the delivery of some new planes they have on order, Sorensen said.
What about hotels jobs?
Some hotels will shut down, unfortunately. Others may be converted to different uses. Still others may be empty indefinitely. Unfortunately, a significant percentage of travel industry jobs will be lost.
But hotels face a fresh opportunity. In fact, many brands have launched cleanliness campaigns in order to communicate their message out ahead of demand revival.
Travellers will also no rely on user reviews or Google search for sanitary standards adhered to by properties they want to stay in.
Travel service companies would do well to place a premum on cleanliness, raise the profile of employees who put cleanliness ahead of other priorities. Staff should be encouraged, instead of punished, when taking extra time to meet new, tougher cleanliness standards.
Will protective masks be part of flying?
Not only face masks. In general, health safety will become the new normal, at least until an antidote becomes widely available.
In the post-COVID-19 era, airlines that clean their aircraft and ground facilities thoroughly, and communicate that message well, will have a clear competitive advantage.
Flyers will put a premium on airlines that not only send out brand-related campaigns to provide cleaner planes and facilities — but actually do it.
What happens to the travel industry when a pandemic strikes again? It is possible travel would be shut down and opened up more easily, and that authorities would have no hesitation to act sooner, instead of later.
Low rates: How will they stimulate airline bookings?
It's mostly good news right now, even if people are still taking a wait-and-see attitude.
With lower oil prices (good news), consumers will expect low airline rates.
If airlines deliver on this low-airfares promise (another good news), it will stimulate traffic.
Qantas showed the way on Tuesday (May 5, 2020), with a bumper $12 airfare offer on the Melbourne-Sydney route, one of the world's busiest, in a push to reignite travel.
Experts stress that to make travel economically viable, travel trade executives need to offer low-priced deals. This would now only help fill remaining capacity, but will also drive demand higher again. A situation where capacity is reduced. resulting in job furloughs and unpaid leave for staff, may eventually bottom out as demand spikes.
What's the experience of airline business with past crises?
It's the nature of the business: Travelers respond positively — and quickly — to real bargains. Think of the post-9/11 surge in travel, despite the enhanced safety and security regulations.
With more travelers traveling at bargain prices means the service providers will need to re-fill even more of their capacity just to break even. From here on, regulators and consumers will be sensitive to any attempt to boost revenue by increasing fees, observed Sorensen.
Improved consumer confidence is something that those involved in the travel trade hope and watch out for.
Meanwhile, it's anyone's guess who soon those photos and video clips we see showing empty airport counters and taxiways filled with parked aircraft will be a thing of the past.
What happens to the travel industry when a pandemic strikes again?
Going forward, it is possible travel would be shut down and opened up, like an accordion. There are calls being aired now to raise readiness levels for the next crisis, to limit "collateral damage" to the economy.
A more intensive collaboration among the scientific community may be needed to a quicker response, considering the clear and present threat of a future contagion from yet-unknown pathogens.
As soon as a fresh outbreak is seen, its pandemic potential assessed, any agreed quick notification protocols must be adhered to. WHO member states must be told about it in a timely fashion.
TRAVEL SAFETY QUICK TIPS:
- Travelers who are sick to delay or avoid travel to affected areas, in particular for elderly travelers and people with chronic diseases or underlying health conditions.
- If returning from affected areas should, self-monitor for symptoms for 14 days and follow national protocols of receiving countries.
- Follow recommendations for personal hygiene, hand wash, cough etiquette and keeping a distance of at least one metre from persons showing symptoms.
- Have a travel insurance.
- If somebody near you is unwell on the aircraft, bring it to the attention of the crew - there are established procedures for them to separate that person.
- Carry antibacterial wipes and antibacterial gel, so that you can clean the area around your seat.
- The antibacterial gel should have at least a 60 per cent alcohol rate.
- Clean your tray table, and avoid putting things in the backseat pocket.
- Make sure that your seat is well-ventilated by using the air vent that’s right above your seat.
(With inputs from Sharmila Dhal, Assistant Editor)