Of all the industries to be affected by the global coronavirus crisis, perhaps the worst hit has been the travel sector. With around half of the world’s population living under some form of social distancing measures, many of which are full lockdowns, the industry has all but ground to a halt as people are forced to stay in their homes. In fact, around 93% of the world’s population is living in a country where cross-border travel restrictions prevent anybody from leaving or entering. For instance, while travel visas authorise individuals to enter and remain in nations during specified dates, many governments have suspended these documents, including the US, India and France.
The crisis has pulled the rug from under the travel industry’s feet to say the least. The number of international flights in April 2020 went down by 80% compared to the same period in 2019, with the airline sector alone projected to see its revenue plunge by a devastating 55% in 2020. Meanwhile, the dearth of international tourists has had a catastrophic impact on various other facets of the sector, from cruise companies to hotels and hospitality.
Here, we take a look at what this is all this means for the travel industry in both the short and long term. Can it bounce back from the pandemic, and if so, what will the industry look like when it does?
The unfortunate reality is that many travel companies won’t be with us once the pandemic is over. We have already seen a string of high-profile businesses laying off a huge portion of their workers, including British Airways, Virgin Atlantic and P&O Ferries, while many smaller travel organisations have completely gone under due to the coronavirus crisis. This includes regional airline Flybe, which collapsed in March 2020, and Colombian carrier Avianca, which filed for bankruptcy in May, citing the “unforeseeable impact of the COVID-19 pandemic.”
Considering we’re only a few months into the crisis, more companies are expected to experience the same fate, even with government bailouts being offered. As Paul Metselaar, chairman of Ovation Travel Group told Forbes; “History tells us that there will be fewer players in the wake of this event”, pointing to Flybe as an example. “It is entirely plausible that there will be other casualties in other segments as well.”
But it’s not all doom and gloom. Although the prospects for certain companies will be terminal, and most — if not all — will haemorrhage money and be forced to lay off staff, it is likely that the travel industry as a whole will bounce back from the crisis in some capacity. As the World Trade Organization has noted: “Tourism may have been brought to a near-standstill by COVID-19, but the industry finds itself in a unique position to help put the global economy back on its feet, once the pandemic has passed.” They point to the fact that tourism has a proven track record of resilience, bouncing back quickly from crises such as 9/11, the 2003 SARS epidemic and the 2008-09 financial crash.
This assertion is borne out by the fact that people are evidently still intent on travelling once this is all over. For instance, almost a third of Americans are planning to “go on vacation/travel when things return to normal”, according to a Harris poll. As such, it’s easy to deduce that the travel industry will indeed rebound. But while many of us will be eager to jet across the world as soon as we can, the harsh economic realities of a post-pandemic world means this may not be possible as quickly as we’d like. And even when the pandemic is over, many countries could still impose restrictions in ways they didn’t before, particularly with mandatory quarantining regulations, which prevent people from going where they want to. Therefore, expect people to travel differently for a while, including fewer international trips and shorter, cheaper holidays.
As well as the economic implications of the pandemic on the travel industry, and the ways we could be forced to alter our travelling habits, it could also bring about a number of other changes. These may include:
Many travel providers are already adapting their practices to prove that they’ll be safe once people start travelling again. This includes hotel companies like Hilton and Marriott introducing disinfectant wipes in public spaces, and providing staff with PPE. Many airlines have also implemented strict cleaning procedures and face mask requirements for staff and travellers.
To limit contact between people and surfaces as much as possible, it is likely that the travel industry will become even more automated. Don’t be surprised if measures like biometric identity verification and touchless document scanning become more common at airports.
Similarly, expect social distancing measures to become a more regular feature of travelling. People will be more comfortable flying if planes are less busy, so current measures such as empty middle seat assignments and a reduction in food and beverage services may become permanent.
Just like in some parts of Africa or South America, where travellers must show a certificate to prove that they’ve been vaccinated for yellow fever, the same may become true for COVID-19. Without one, individuals will then be denied entry into other countries.
The coronavirus crisis has taught us an important lesson: epidemics and pandemics aren’t covered under most travel insurance policies. Expect this to become the case, leading to a huge rise in the cost of travel insurance as a result.
