The pandemic has severely affected the lifestyle of the majority of people around the world. Its most common feature in most of the countries is economic shock to all the industries especially Tourism and Hospitality.
The coronavirus has destroyed the world's economies and disrupted life in ways that only an year ago were unthinkable. Never will the universe be the same. But businesses have now begun to come back on track at some point and people have started travelling. The pandemic is notably the most impactful crisis after the Second World War that has utterly wrecked havoc in the world. It has affected developed, developing and underdeveloped countries. Countries that are facing unprecedented outspread of this disease are the US, Brazil, Italy, India, Spain, South Korea, France, Iran and so on.
Aviation industry has proven to be an important part of the economy as it holds strong cross-industry linkages with upstream as well as downstream sectors. It has witnessed a draconian abetment of fleets, dramatic dwindle in demand, suspension of numerous employees and accelerated cessation of airlines. The economic repercussions on the travel industry is speculated to be immeasurable. There is a decrease of about USD 400 Billion due to shrinkage of travel demand as per a research.
The business models and economics of commercialized aviation will be redesigned. They will also be required to remodel a new normal in order to acclimatize. This includes new health measures and protocols, new travel curtailments and restrictions, and possibly more impactfully, new ethos and travel keenness from passengers.
Challenges for Tourism and Hospitality Sectors
The pandemic has severely affected the lifestyle of the majority of people around the world. Its most common feature in most of the countries is economic shock to all the industries especially Tourism and Hospitality. Tourism and hospitality sectors thrive on visitation trends and decision-makers make significant efforts to draw tourists to sustain the sector and increase the industry's multiplier impact. However, travel restrictions are being observed at national and international levels due to the ongoing situation. These restrictions include closure of border, ban on travelling, cancellation of events, fear of the disease, quarantine requirements, etc.
There was a decline of 38% in the total air capacity of the world in March 2020. The number of international passengers decreased in 2020 due to the outbreak of the pandemic. Hotels across the world face booking cancellations resulting in economic recession. According to the World Travel and Tourism Council, which represents private companies in the industry, the tourism industry contributes about 10.3 percent to the world's gross domestic product and creates about one out of four new jobs worldwide over the past five years. But due to the outbreak of the novel Coronavirus aka COVID-19, millions of such jobs have been lost. The future of Travel industry post covid would stress on the factors mentioned below:
- Most airlines may experience a need for financial support for a long time.
- The travellers would likely prefer destinations where safety standards are being taken care of.
- It is assumed that business will be as usual for the hospitality industry by the winter season of 2021-22. Once again, visitors from all over the world will start travelling to different countries.
- Travellers opting to travel locally as a safer and a cost-efficient choice.
- The airline industry too would offer limited kinds of seat choices than what they used to offer pre-Covid.
Revamp and Emanate
There are many approaches for airlines to emerge out of the crisis and adapt suitably. This will particularly depend on their regulatory, economic and social environs. Cost efficiency and excellence in operations could be the common theme for airlines. Airlines will have to maintain cost savings by checking its crew management and operations. Several airlines have revamped their passenger aircrafts into freighters in order to expand the reach or cargo network around the world.
For the longer term, reviewing the composition and network of fleets is important for the survival of airlines. Many airlines have postponed or cancelled or converted their standing orders for aircraft to more effective and lean aircraft. In addition to mounting cost pressures, airlines around the world are challenged by intense global competition and the need for agile operations.
Back to normalcy
A return to normalcy is much needed to recover. The industry is slowly coming back on track and recovering gradually. However, this approach is not sufficient to regain the required profitable levels. For such recoveries acquiring the travellers confidence in flying again is significant. Working with the broader supporting industries like tourism and hotels to elevate the demand and recapitulate consumer confidence.
Many countries are also currently implementing steps to create a more resilient post-COVID-19 tourism economy. This includes the preparation of plans to encourage a sustainable tourism recovery, the promotion of a digital transformation and the transition to a greener tourism environment, and the rethinking of tourism for the future. There is an urgent need for the travel industry to focus on enhancing technologies in order to fight the virus spread, it could be done by stressing on security efforts and sanitization. Below are the steps that should be taken to ensure safety:
- A strict check on passengers’ travel history
- Regular sanitization of hotels and airports
- One should avoid travelling, if unwell
- Social distancing should be continued till the time everyone gets vaccinated
- Use of digital menus, cutlery napkins and disposable crockery should be adapted by the hotels
- Limited contact with surfaces that are frequently touched, like elevator buttons, handrails, kiosks, etc.
- Contactless payment
- Test before and after any trip
- Be choosy about where you stay
One should follow all such safety measures during travelling as well as in routine.
Mr. Alok K Singh is a First Generation Serial Entrepreneur with a demonstrated history of building businesses in the Internet and information technology industry. He is skilled in Business Planning, Entrepreneurship, Strategic Planning, Business Development, and Venture Capital. He is a strong professional with a Master of Business Administration (M.B.A.) focused in Finance from Indian Institute of Planning and Management. He is the Co-founder and CEO of Travomint.