That COVID 19 is impacting travel and tourism like no other episode in recorded history is now understood by all. Now is the time to look ahead, post COVID times, and here the consensus is that change will become the new norm, that travel and tourism will adorn new clothes. Here are some specialist views, experts in inbound, outbound, and international travel and aviation and we get a ringside view on shape of things to come!
Consolidation is Inevitable, leading to more Robust Industry with Profitability, says Kapil Kaul, CEO, CAPA India.
COVID 19 is an unprecedented crisis and the worst ever for the aviation and travel industry globally. There is uncertainty about the depth and duration of this crisis. COVID 19 is like a world war and its impact will be long term – both on demand and behaviour related to travel.
Travel will recover but the speed of recovery will be slow and painful. The cost of recovery will be massive and government bailouts will not be sufficient to save most of the travel and aviation enterprises. Consolidation is inevitable and may be perhaps necessary to bring fundamental changes. We have 800 airlines globally – most of them struggling /loss-making and some are government owned. We don’t need 800 airlines – fewer but stronger airlines is what we need! In the US, for instance, we have 8-10 players now and the industry has delivered record profitability in the last ten years, due to consolidation.
Chicago Convention 1944 – post World War 2 – has to be dismantled to allow a new modern framework to emerge. We need to remove restrictions on ownership/ control and the archaic bilateral regime to allow such a strategic consolidation to take place. Aviation has to be treated like any other industry. COVID 19 – which has dimensions of a world war- can act as a catalyst for this change and enable a more solid commercial airline industry to emerge.
Similarly, post COVID 19, consolidation is required across the entire aviation and travel value chain. We need strong global players across all the sectors and not a very fragile and over fragmented industry structure. However, such fundamental changes will require a coordinated global leadership with a strategic commitment to change.
In India, we need one large FSC and 2-3 LCCs and not so many players to bring order back to Indian aviation. Similarly, the travel industry needs urgent rationalization. We have too many travel agents (including OTAs) and tour operators. The entire distribution industry needs consolidation at a fast pace.
Other near-term global trends, over the next 1-2 years, that I expect are as follows:
– More short-haul and domestic travel and possibly less by air.
– International leisure travel may get impacted till we have a vaccine.
– Business travel will continue with remote working as much as possible with more secure video conferencing platforms. Only essential travel may be allowed by corporations.
– Sanitization / hygiene/ cleanliness may be in sharp focus while choosing an airline/ transit airport and even the destination.
– Global leisure travel from and to China may get impacted – change led by consumers. We may also see some major Geo-political shifts post COVID 19.
– Hub carriers like Emirates / Qatar/ Lufthansa/ BA/SQ may be impacted with more travelers preference for direct flights.
– Long haul LCC will come under more serious pressure.
– Social distancing and inspection protocol may further hurt airline viability and return to service.
– More recognition to the frontline staff and crew. New staffing protocol to ensure safety especially for the front line.
– Thermal scanners and other forms of technology will be widely used.
– Industry will significantly shrink due to the financial impact with serious impact on consumer/ competition.
– Online travel will significantly gain over the traditional channels.
Impact of COVID 19 cannot be avoided but post COVID, the travel Industry must reshape to fit into the new order led by the economic and behavioral changes related to travel.
Now is our moment as a serious destination to bounce back with a highly coordinated positive campaign, says Rohit Kohli, Joint MD, Creative Travels
Inbound Tourism in India is almost decimated, and this time it has nothing to do with India.
Recovery of inbound tourism will depend on many factors – how long the virus lasts in India, how long it takes the airlines to recoup and get their network going again, and most importantly it depends on how soon governments in our main source markets allow their citizens to travel to Asia and specifically India. If anyone feels business will come back to an even 75% level of what it was last year, they are misguidedly optimistic.
We are all part of the most important historical event since World War II, because of which the global tourism industry has probably changed forever. India, like all major tourist destinations around the world, will have to fight for its space in the shrunken world market more than ever post Covid 19. Success of destinations will depend on how each reaches out to the travellers’ mindset and how soon once the dust starts settling. India certainly has an advantage in that we have much more to offer in one country than most other countries do, but my fear is that we will waste this opportunity. Both industry and governments need to put their heads together to avert such a loss in opportunity. We are going to start from ground zero, and we can benefit from this unique situation, when we can start beaming our message afresh as a destination.
India has been presented with a fantastic break. Till January 2020, India was at its lowest in reputation due to all the news on crime against women, pollution, riots etc. Unfortunately, India did nothing to counter that all this while. A lot of that has got forgotten, and now is our moment as a serious destination to bounce back with a highly coordinated positive campaign. This is the only way to secure the future of tourism in India.
Consolidation will happen in both sides of the market, yet India could come out trumps, says Vikram Madhok, MD, Abercrombie & Kent India
- The fall out of this dreaded virus has sent our Industry in a tail-spin from airlines, hotels, tour operators and all related service providers.
- I do not see its revival in 2020 as this pandemic plays out globally in both our primary & secondary markets. Additionally, countries that are not as badly impacted will also be apprehensive towards travel.
- Long haul markets as India will bear the brunt thru 2020. However this will turn and I do believe India will see a partial recovery in 2021.
- We will also see a shakeout in our source markets with FTOs who are not strong financially to weather this ugly storm! Hence there will be consolidation. A similar situation will be with DMCs in India resulting into a loss of jobs at both ends. The same will be with Hotels & Airlines which are extremely capital intensive with a large number of employees.
- To preface this point, India was on top of its game in 2019/2020 till this crisis hit us. At A&K we were witnessing strong double-digit growth from the US, Australia, Germany, UK and to a lesser extent from Europe. Going forward, FTOs will scale down their offerings into India in the short term under 2 years till they see strong signals with an uptick in business to once again enlarge their offerings.
- To reiterate, in the long run I see tremendous growth into India as on date mid-April, we seem to be handling the spread of the virus better than most countries & especially in relation to our population. Should this situation remain clients will perceive India to be safe to travel to. Countries such as China & some European countries which are impacted severely will take longer to bounce back!! We will gain from this provided we take a few steps.
As we speak, we are actually seeing a small but steady flow of requests in 2021. Also, several clients who had booked with advances paid in 1st quarter 2020 have deferred their travel into fall of 2020 and 1st quarter 21. Hence all is not lost.
The Union and state governments should use this time to address all infrastructure bottlenecks during this period. We should embark aggressively to build pockets of excellence in the main tourist treasures of India.
Another important point that could help our Industry revival is the vaccine most countries are working on, including India. Should this be out by the 3rd quarter of 2020, it will hasten the process of a turn around. Most clients would be reassured on their safety for International Travel especially out of the US; the Americans are accustomed to taking flew shots with the change of season, and especially when they travel.
Be Positive, Adapt and Plan Ahead to stay ahead in our tourism efforts, says Ajeet Bajaj, famed mountaineer, and owner, Snow Leopard
The world has changed and turned upside down. The biggest crisis of our times … the Corona virus pandemic has hit us hard like a storm in our lives. It has become a “VUCA” world, there is volatility, uncertainty, chaos and ambiguity of an unprecedented magnitude, both in our lives and as organisations. Change is inevitable….
“It is not the most intellectual of the species that survives; not the strongest.., but ….the one that is able to adapt to and to adjust best to the changing environment,” Charles Darwin, Origin of Species (1859)
In the Indian Armed Forces they say that when the going gets tough, the tough get going…… as human beings and as Indians we all have to be resilient, get going and be effective. The French term “sangfroid”, the ability to stay calm and cool in a crisis, must become our middle name.
I would like to share the 7 Cs for Managing and Leading during this crisis from John Quelch of Harvard Business School:
Post the pandemic, the travel, tourism and hospitality industry must adapt quickly to survive. Some likely trends:
- Domestic travel likely to pick up first followed by adventure, wildlife and gradually corporate travel & the MICE segment
- Inbound could pick up gradually starting October 2020, but more likely in the first quarter of 2021. Visits by NRI/OCIs, beach tourism and the Buddhist sector may herald the beginning of Inbound.
- Outbound likely to start in Q1 of 2021
- FITs and small groups
- Focus on hygiene, cleanliness and sanitation
- Travellers will want to avoid crowded areas
- Airports to have additional health screening
- Covid 19 cards for all travellers
- Change in the visa regime of many countries
- Step up communication with their teams, customers and suppliers
- Be fast, focusedand flexible
- Leverage technology
- Get support from government schemes
- Renegotiate with banks
- Build reserves (this can happen again)
I would like to suggest that the Tourism Industry during this crisis, must be a ‘ force for good’ for our country and humanity at large. I would to close on a positive note with a quote from His Holiness, The Dalai Lama, “Every day, think as you wake up, today I am fortunate to be alive, I have a precious human life, I am not going to waste it. I am going to use all my energies to develop myself, to expand my heart out to others; to achieve enlightenment for the benefit of all beings.”
Emerging trends out of this crisis – A “New Normal: will emerge”, says Sheema Vohra, MD, Sartha Global Marketing, LLP
The big trends are emerging before us. I do see health and safety concerns will become prime considerations and maintaining high hygiene standards is very important. I also believe the following trends will emerge:
- Use of technology for contactless transactions
- New set of behaviors / habits
- On line a way of life – virtual experiences, online offers, entertainment, shopping, etc.
- COVID 19 people has taught many people to be self-reliant, and they have enjoyed the experience. So, DIY information, services and products will become more important.
- Work from Home and Flexible work timings. Many people and companies will realize that there is no loss of productivity, whilst simultaneously saving on commuting time and expensive office real estate. So, this will become more and more common. Conventional office space will exist but go through a change.
- Physical distancing will become a way of life – including in business.
Significant trends in the outbound market in the short run:
- People will travel and this is based on the decline of COVID 19. Some travel should begin by October / November this year.
- People are spending a lot of time online, thus digital and social platforms will gain greater prominence to engage customers. It has now become very important to be present on relevant online platforms and optimize the experience.
- Safety, hygiene standards, clean air will become the most important considerations for travel
- Additional visa procedures might be implemented – example greater sharing of travel history, medical history, etc.
- Mandatory vaccinations before travel could be introduced.
- Airlines will carry lower loads due to social distancing and new hygiene standards, and this could make the airfares more expensive. Additionally, airlines will have to devise new standard operating procedures for hygiene and social distancing on-ground.
- Crowded activities will be avoided on the short run – sports arenas, theaters, entertainment, etc. New methods will have to be devised for seat allocations, entrances, exits etc.
- Choice of lodging will be based on safety, hygiene standards. They might have to introduce a certification for this purpose.
- Road trips will be in high demand as will private chauffeur driven vans for small family groups.
- Outdoor holidays, natural reserves, national parks, islands and other places with less people will be preferred in holiday itineraries.
- There will be demand also to travel to lesser known destinations and locations which are less crowded. Immersive trips, solo and couple travel will become more prominent.
- New guidelines will be implanted for business travel.
Positivity will further drive us back to sustainable, green, responsible & lasting travel & tourism options, says Rajeev Nangia, CEO, TRAC Representations
While we all are fighting together and globally almost all are mostly under lockdown, with very little or no knowledge of when we will come back to socialising from social distancing. The big question that comes forward is will COVID – 19 kill our aspirations to travel? Do you really think so! I don’t… human mind has great ability to forget and move forward and so this phase too shall pass.
While people are maintaining social distancing by not moving out of their homes, they are also socialising using whatever means they can find through various technology options. Business meetings over tech platforms, getting to chat with family and friends over another tech platform, expressing opinions over tech platforms. All COVID-19 has changed so far is to make us understand better use of technology. The most amazing part and the silver lining is how quickly we adapt and try to move on.
We are all actually waiting for COVID-19 to finish, and as soon as it finishes, humans will take even less time to restart and this time even with more resilience. While we wait, some are still in business and that’s business of assistance. Recently came across an app called “India Assist”, through which the Indian travel fraternity is actually trying to help those foreign travellers who are stuck in India and are unable to go back to their motherland.
On the other hand, travel trade while currently struggling with cancellations and almost zero revenues, is also preparing itself for situations post COVID-19. There are campaigns by some destinations who wait to welcome back travellers and some feel this is good time for training. But actually this is also time for trade to introspect and make changes in what they would like to sell to overcome the losses COVID-19 would have inflicted. I am sure trade has realised selling cheap and that price wars is no more an options, at the same time your skill is your knowledge and connectivity, which can help people even in difficult times. So, let’s get going prepare new itineraries that you would like clients to experience and earlier could not do the same due to paucity of time.
Remember Humans will not stop dreaming and will never stop travelling, it’s a matter of time before we are back to our business that we all love and call it Travel & Tourism.
The way forward will be for destinations that evoke confidence for safe and healthy lifestyle, says Bejan Dinshaw, country manager, Culture and Tourism, Abu Dhabi
The travel industry has emerged from disruptions and risks earlier and the current pandemic is not the first to upend the industry. This is simply because the travel industry has a way of levelling its wings and carrying on. Not long after the crisis, destinations will be redrawn on the travel map and onward the travel industry will go!
The resiliency of the travel and tourism industry will help it rebound as the effects of this pandemic ebb. We will see a boom of outbound travellers from emerging markets looking to make up for the lost time and demand will come stronger than ever. People will still want to go places however they will be a lot more cautious now.
They may initially tend to avoid big cities and public transportation. Cleanliness and hygiene will be addressed a lot more by hotels, resorts, theme parks, etc to increase the customer’s comfort level.
The importance of traveling with sensitivity to the environment is going to be higher on the agenda of the travellers. Destinations, airlines and hotels are going to embrace this trend. People will now move towards trips that allow them to experience a healthy and safe lifestyle. Emerging technologies like AI, machine learning, augmentation will be adopted and used aggressively to support travel experience.