Tourism Industry Outlook post-Covid19
Two and a half months into the lockdown or movement control order or circuit breaker, as we have heard these synonyms used in different countries, we have witnessed some really dramatic and encouraging developments all over the world. Stories of human emotions, benevolence, compassion, grit, and determination abound. Animals have not lagged far behind, too, and they have also shown great maturity and patience again and utilized these peaceful times to see the cities and towns they could not earlier due to human rudeness and illogical interventions. With these, there have also been quite a few sad stories and unfortunate happenings, too.
These 60–90 days have been tough on people, especially for the poor and under privileged, those who have been earning livelihoods through daily wages, who have been waiting with bated breath everyday for the markets to open, and businesses to start. While they were the most unfortunate, even the employees in service industry, especially in tourism and hospitality industry, had to suffer a lot as many of them have had to lose their jobs as this sector does not foresee a recovery anytime soon in 2020. Some of the high paying jobs too were lost as the organizations have been under financial pressure and economic distress due to loss of revenue and bleak economic recovery in the coming months due to breaking down of supply chain and international trade, and had to resort to cost-cutting initiatives through reduction of headcounts and, wherever possible, reduction in office spaces too. As I write this, shopping malls, salon & spa, gym, and cinema halls have still not been allowed to open in many of the larger cities with wealthy populations. This has resulted in loss of salary and even loss of jobs for the employees in these service sectors, viz. facility management services, and contractual & outsourced services.
The future of travel, a 8 trillion USD global industry, hinges on 3 factors- 1. economic recovery leading to growth in business travel, 2. discovery of a Vaccine for Corona virus, and 3. stability in aviation sector. Aviation has been one industry that most of the time run under stress of managing operation costs and improving services without increasing cost. During this pandemic, we have already seen some large and reputed airlines going bankrupt in few countries, some of them looking at merger of operations, and some surviving due to infusion of fiscal stimulus provided by their governments or by their bankers.
There have been quite a few silver linings in many parts of the world, in Europe and in Southeast Asia, where countries like Germany, Spain, and Italy have started opening borders to encourage tourism. Vietnam has wonderfully contained the pandemic with hardly a few hundreds of infected cases, and is a fully recovered country for last 3 weeks, and have already been promoting domestic tourism. Thailand too has been successful at managing the spread of infection and have started domestic flights since May, and in all probability are going to permit some international flights July onward. Thailand’s neighbours like Cambodia, Malaysia, Myanmar, Laos, and Vietnam are going to support it’s opening of tourism industry as they stand to gain through travel across borders.
Travel post-pandemic is not going to be the same as pre-Covid19 days, and it’s not a difficult guess, as strict measures to maintain distancing, and avoiding large gathering shall be in place, coupled with mandatory use of face mask in public places and inside Cars or buses. Whether its shopping malls or tourist attractions, strict adherence to hygiene and sanitation standards shall be in place. Travelers will also be required to travel with health certificate and medical test reports from their country of origin. Upon arrival at airport, if a traveler is found to be showing symptoms of fever or cough or anything indicating corona infection, he or she would be sent to quarantine at personal cost. Even for island tours or jungle safari or for any cultural show, there would be a limit on the number of admissions on a given day.
While Hotels and resorts have also passed through challenging times having been forced to down shutters due to health risk and instructions from the government and their own management, they had to incur a fixed cost to maintain their premises and also salary of staff, they would be more than eager to welcome travelers again, and might go on to offer some great deals and incentives on long stays, but they will also go few extra miles to preserve their brand through deploying all safety and hygiene measures in their restaurants and public areas such as salon or fitness center.
The sentiments of people worldover during this pandemic has been one of compassion and empathy, and for many of the people among all economic strata, this crisis and resulting lockdown has proved to be a very frustrating experience. People realize this is different from an economic recession or a financial meltdown, so we all have been holding each other’s hands and waiting for the brighter days to come, without having any grudges against a set of person or government. People have lost jobs in past as well due to bad performance of their companies or because of poor economy and curtailed growth in trade and business. In the current scenario, people have lost jobs but have probably not lost hope.
We have surveyed randomly a small group of people who have been sort of frequent travelers over the past years, and they have expressed desire to travel to their dream destinations if the mandatory quarantine is done away with and adequate safety and hygiene measures are taken by the government and civic authorities of the destination they are traveling to. Some of the wealthier travelers are even willing to pay a little extra for the hotels and resorts who have added protection and sanitation measures for the guests.
Over the last decade, travel has been a symbol of high class lifestyle and a way to express themselves for many people in even middle-income category. The millennial and generation Z are especially hooked on to travel, for adventure, fun, and learning. There is a category of people who just want to de-stress by visiting their favourite shopping and nightlife destinations. And then there are some niche travelers who travel for spiritual pursuit, viz., wellness & spa, mental rejuvenation, detoxification, meditation & yoga, and some go on to enjoy culinary experience, art, history, and culture.
I see a great future for tourism, and not very far ahead, too. If the coming two months see some positive signs worldover in containing the pandemic, and if the airlines industry support travel through attractive airfares, the tourism industry will begin to take small strides and may start seeing a turnaround by the last month of 2020. I am sure that the countries in west Europe which are not so highly populated as their Asian counterparts, with their disciplined population, will be able to take advantage of the remaining few months of the current summer season. Adding on to this, the other tourism hotbed of the southeast Asian nations comprising Thailand, Indonesia, Malaysia, Vietnam, The Philippines, Singapore and others shall also gradually test the waters allowing people to travel in restricted numbers during the 3rd quarter of 2020, and if all goes right, shall be ready to go big in attracting tourists for the winter months. If European countries, and China, who are among the drivers of travel industry with around 2.5 trillion USD potential, are able to send a even 50% of their potential outbound travelers to European or Asian destinations, the southeast Asian market will rebound which will provide a big fillip to the global tourism industry.
If the current severely affected countries USA, India, and UK also see some outbound travel by the last quarter of 2020, the year that started off with a global gloom will have not so gloomy an ending, and something that the global economy is keenly and desperately looking forward to.
Travel is a major component of the GDP of all developed and developing countries. It drives some major value creators that in turn drive the core industries. These value creators include the Corporate travel and MICE industry, mega sporting events, mega trade promotion exhibitions, cultural events, weddings, fashions shows, and so on. And these further drive the major consumer industries such as food & beverage, automobile, agriculture, refrigeration & air-conditioning, designer garments, high end cosmetics, luxury footwear, and so on.
It would be seen with interest how fast the travel industry revives and how many of the 50mn workforce are able to return to their dream jobs at the soonest. Travel and vacation bring smiles to everyone’s face. Let’s hope that 2020 passes off as a bad dream and a reminder to mankind to create a balance between nature and materialism, and that we lead a minimalist lifestyle. This is important because we have seen how an invisible enemy has proven to be a big leveler, in a sense that it has exposed the weaknesses of wealthy and poor countries alike.
