Cushioning the long-term impact of COVID-19
Anant Patel, Vice President EMEA & APAC at WEX
While it is clear that many in the travel industry are bracing for the worst, given how widespread the impact of COVID-19 continues to be, there should be some room for optimism. History has shown that the travel industry is resilient and in time will bounce back.
Where we are on the “bounce back” scale varies depending on who you ask. My perspective is, we are now well and truly within the eye of the storm, riding it through and awaiting that break in the clouds and the calming of the winds. This viewpoint varies within the industry and some do see it differently - depending on their place in the travel supply chain or region they sit within.
Gloria Guevara, the chief executive of the World Travel and Tourism Council, recently said the outbreak presents a “significant threat” to the industry and has warned the travel sector could shrink by a quarter in 2020. World Travel and Trade estimates that 100 million tourism jobs are on the line, with travel companies set to lose billions of dollars. This is impacting nearly one-third of an industry that employs over 330 million people, with latest figures suggesting the travel industry alone will see job losses of around 50 million.
While tourism was the industry that was hit first and what some might argue as hit hardest, business has not ended. Now is the time for travel companies to be thinking about how they can cushion COVID-19’s potential long-term impacts. It’s a matter of tackling the industry’s resurgence in small doses rather than all at once. We can’t force consumers to dive back into travel as they once did, so as a leader, think about what can be done now to encourage future travel and focus on rebuilding trust in the industry overall.
The Future of Travel
We’ll have to take the “return to work” policies day-by-day, as Governments across the world start to reduce lockdown limitations. And while certain countries might be ready to send their people back to work, the want or need to travel will be less of a focus for individuals – with concerns around health and safety still rampant within communities. Analysis from the International Air Transport Association this month warned air traffic may not return to its pre-pandemic levels until at least 2023, as international travel bans and restrictions drag out the recovery. However not everyone has this outlook – for better or for worse. In fact, as airline return to skies ahead of the European and US summer, the cost of air travel looks set to double on some carriers. Despite most European borders being shut to foreign travellers until at least mid-June, it appears these restrictions aren’t stopping some airlines from putting summer flights back on the table - a U.S to Europe economy return flight in early June currently sitting around USD$2,000.
It will be some time before international travel returns to “business as usual” – we’ll start with small resurgences in local and regional trips. People are most comfortable in the cars over a plane. International air travel will be seen as a luxury, as it once was back in the days of the Concorde. And, we’re in fact, starting to see countries take small steps by allowing travel in smaller distances. Travel bubbles are being leveraged to gently resume travel and restart tourism industries. Rather than risking further transmission by busting open the travel floodgates, this staggered approach identifies and preserves safe travel zones where the virus risk is low — and it’s likely to be our best bet for a holiday anytime soon.
Green shoots are sparking in some regions, such as China, so we can take positives out of markets that are almost over the hump and starting to flatten the curve. The questions around when confidence in the industry will rebuild, is not an overnight matter – it will take time and as an industry we need to prepare to deal with the challenges that come with the nature of a pandemic such as this one. We are staying close to our customers to see how they are feeling, offer feedback and advice around short-term options. The key to cushioning the impact is working together over the next few months, keeping focused on the long-term goals of resurgence.
This was posted in Bdaily's Members' News section by WEX .
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