Ground Transportation is the most flexible link in the supply chain of a service, adapting to the conditions of the moment such as variable schedules of flights, trains, and ships, as well as the conditions of the traffic in the city where it operates.
Tourism is undoubtedly one of the sectors most affected by the global pandemic. Within this immense industry, land transportation has been one of the most affected.
The sector faces numerous fixed expenses such as insurance, parking, transport licenses, or leasing. At the same time, the operational cost is high. For example, an operation from 4 or 5 vehicles implies having two people for administration/management of reservations, planning, and dispatch of services.
Also, the sector has a low-profit margin given the high competition, a low barrier to entry, and seasonality.
Ground Transportation is the most flexible link in the supply chain of a service, adapting to the conditions of the moment such as variable schedules of flights, trains, and ships, as well as the conditions of the traffic in the city where it operates.
All these factors mean that many times some services do not cover the operating costs. COVID will bring new trends and opportunities for the sector:
- The interest in avoiding overcrowding tourism promotes the search for new destinations and the rediscovery of extra-radio towns or cities. The tourist map will be broader, but since the air network will hardly change in the short term, it will be Ground Transportation that allows link airports, train stations, or ports with the new destinations.
- Private or personalized trips at this juncture have value-added since they give greater guarantees of safety and protection sanitary. This constitutes a great advantage for the sector.
- The growing trend of home working is likely to reduce the seasonality, since the possibility of working and traveling at the same time, will increase travel in the low season.
- Non-hotel accommodation will grow. This trend will allow new areas where tourists stay. More accommodation with less capacity will mean more transfers.
Taking advantage of the opportunities offered by the new situation requires assuming challenges that the sector must face. Changes will demand digitization and automation of processes.
COVID will be an inflection point, I trust that thanks to the great adaptability, the sector manages to capitalize on opportunities.
Mariano Chiesa is COO Europe Shuttle. He has a Degree in Tourism & Master in Marketing. For 20 years he developed professionally in different areas of Tourism such as Official Bodies and Associations, Travel and Accommodation Agencies (CEO Hostelling International Spain). For a few years with his own business in the Transport sector with Europe Shuttle.
