The coronavirus is no ordinary disease. In a span of only a few months, this deadly virus has brought the world to its knees. No country has been spared, the human cost of this crisis is staggering. Thousands of deaths, millions of cases; this pandemic has not only exposed the inadequacy of governments but also highlighted how the absence of timely action can lead to devastating consequences.
As nations have had to close borders and order their citizens to stay home and practice social distancing at all costs, the global economy has taken a serious hit. Businesses both small and large have had to make major changes to their structure to survive. Thousands have been laid off, salaries have been cut, people have been rendered homeless, without anything to turn to. The travel and tourism industry is perhaps one of the most adversely affected industries because of the coronavirus. The Indian tourism industry may lose nearly 5 lakh crores in revenue. Analysts have warned that travel demand will not return to normal until 2021.
As travel restrictions have been set up around the world, the aviation industry, an integral part of travel and tourism, has suffered unspeakable losses. Tour operators have also incurred major losses as the notion of a ‘vacation’ has completely been erased in the last couple of months. Travelling for leisure is a faraway thought for most people and might remain so for a while. The world as we know it will forever change once this pandemic ends. This, in turn, will most likely also change the way we travel. What does this mean for the travel and tourism industry? How will they pave a sustainable way for the future?
The aviation industry may be on the brink of bankruptcy
With blanket travel restrictions in place across the world, the aviation industry has suffered the most loss. It may take a while for people to take up travelling again and until then the airline industry is in serious jeopardy. The CAPA (Centre For Aviation) has predicted that by the end of May 2020 most airlines may go bankrupt. If governments do not step up and offer bailouts to airlines, they will succumb to huge losses. Thousands of jobs are on the line. IATA has revealed that airline passenger revenues are set to plunge by 55 per cent, or USD 314 billion, in 2020. The numbers are staggering.
As we await the decline of the pandemic, the aviation industry is grasping at straws for survival. In the best-case scenario, it will take several months for travel to normalise. Even then, people are bound to be apprehensive about travelling by flight to faraway destinations. More than anything, this pandemic will have a lasting impact on the psyche of the individual which is why their outlook to travel may change forever. This will directly impact the aviation industry.
The most logical way forward is for governments to step up and alter their policies. At this time, it is imperative for governments to bailout industries that are on the verge of collapse, such large-scale measures will offer a lifeline to the aviation industry.
The hotel industry continues to lose revenue
Just as air travel has drastically reduced, the absence of tourism has seen accommodation continue to fall. Across the world, hotels run empty. The sheer number of livelihoods that depend on the hotel industry is massive, if the industry suffers such loss, they will be forced to lay off employees and cut salaries, a process that has already started.
Achin Khanna, Managing Partner – Strategic Advisory, Hotelivate, spoke to TravelBizMonitor and highlighted how the hotel industry in India will fare during the ongoing pandemic. “The overall loss of total revenue for the ~ 140,000 branded/organised hotel rooms across the nation will be anywhere between US$1.3 billion to US$1.55 billion. This amounts to a 27% to 32% erosion in the overall revenue as compared to last year.”
Khanna believes that once the virus begins to fade away there will be an urgent need to boost tourism. “The government will need to consider the re-introduction of the Leave Travel Allowance (LTA), perhaps even at a two or three multiple of the erstwhile amount, so that both the hotel & aviation industries may benefit from a jump-start in vacationing by the large demographic dividend that is the citizens of India,” he said.
What is the path to recovery in the aftermath of COVID-19?
Once this pandemic fades into oblivion, there will be an imminent need to completely reimagine and reinvent travel and tourism. Life as we know it has been completely changed because of coronavirus, which is why we will have to find new ways to adapt once it is over. The same applies to the travel and tourism industry, a reinvention is in the making. The economy will take time to recover, livelihoods will be lost but there is still a ray of hope. It goes without saying that the collapse in economic order will trickle down to a collapse in social systems, at such time innovation is key to survival.
Digitizing tourism resources might be extremely beneficial to countries. Organizing virtual events to showcase cultural and heritage resources will help keep countries on the tourism map. Given that so many people are in quarantine, there is a lot of time at hand to utilise these resources and experience a country from their homes. Through this, a certain level of interest is maintained in the potential traveller, who might decide to visit a country based on these virtual events once the pandemic is over.
Collaboration is of the utmost importance to chart a path for recovery post COVID-19. All the players in the travel industry including airlines, hotels and tour operators, must come together and devise strategies to minimize losses and capture the market once things return to normal. If strategies are put in place now, as soon as restrictions are lifted, organisations will have a major head start in winning over customers.
It is also the time for tourism academics to contribute research-based, data-driven ideas and solutions to support the industry in devising unique solutions to battle the losses incurred as a result of the coronavirus pandemic. Staying up-to-date on relief measures offered by the government in the form of finances and assistance will help companies recover the fastest. The most significant takeaway from the coronavirus pandemic is the urgent need to update existing health and safety techniques, policies and procedures. The pandemic has exposed a glaring lack in these policies and the tourism industry must be extremely sensitive to this once the market reopens. Customers will scrutinise this aspect the most and the industry must be ready with a robust response.
The UNWTO will work actively to rebuild the travel and tourism industry
UNWTO estimates that in 2020 global international tourist arrivals could decline between 20-30%, down from an estimated growth of 3% to 4% forecast in early January 2020. In such circumstances, UNWTO continues to stress the importance of international dialogue and cooperation. The global community must work together in solidarity that goes beyond national borders. The organisation will continue to provide guidance and support for recovery measures of its members, the private and public tourism sector, including organizers of tourism events and fairs. It also calls for financial and political support for recovery measures targeting the tourism sector. The travel and tourism sector has displayed its resilience in the past and will continue to do so in the face of this debilitating pandemic.
The world must pledge to be more sustainable
There is no doubt that the world is forever changed by this pandemic and therefore once we return to normalcy after it, there are bound to significant changes in the way we live. Once the dust settles and the travel and tourism industry recovers, they must pledge to be more sustainable, to be more aware of the environment and its needs. In the time that the world has been sent into the quarantine, the environment has found a way to slowly recover. We must pledge to keep this up, this must be one of the most important guiding principles on the path to recovery post COVID-19. Travel will resume but it will be different and we must be prepared for it in every way possible.