SARS? yet another `shock to the system` for both the travel industry and travelling public alike, who are…
SARS? yet another `shock to the system` for both the travel industry and travelling public alike, who are having to increasingly learn to cope with uncontrollable external events, which are rocking the foundations of travel businesses, Mark Bedlow, Director of PricewaterhouseCoopers Travel Group reports. The industry is still reeling from 9/11, the Djerba shootings and the Bali Bombing, and currently feeling the impact of the war with Iraq, and now SARS, he long-term impact of which could be quite significant. Short-term it very much depends on just how quickly the lethal virus spreads, whether carriers are treated in time to prevent the death toll from rising to alarming levels and of course the degree of media attention – all factors which are very much out of the industry`s hands.
Flexibility in a company`s cost base is a key lesson that ought to have been learned from the last Iraq war, and further hammered home with 9/11. By cutting back on non-discretionary spend, invoking more flexible working patterns for staff to reflect the reduction in revenues, companies can great reduce their exposure. To further limit damage, companies should start planning to capitalise on the eventual upturn looking at how they might maximise their revenues from their existing customer base and secure new additional customers
As it does not physically overlap with Asia as a destination, the European short-haul leisure market may remain relatively immune to SARS, however SARS simply adds to the current malaise and gloom over the summer `03 leisure market.
The obvious sectors to be affected are hotels in Asia and those scheduled airlines flying to those destinations irrespective of point of origin. Will this be the final nail in the coffin for some of the less efficient airlines – we have recently seen Air Canada go into the Canadian equivalent of Chapter 11? The major risk is that as business people in particular stop travelling so this in turn further slows down the economic performance of the global and in particular the US economy.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
