The road beyond Coronavirus Pandemic – how can the travel industry survive the biggest setback of the decade?

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The whole world is conjointly combatting the pandemic, COVID-19 aka Coronavirus that has already caused serious casualties across 160 countries. As per official records, nearly 223,104 confirmed cases reported worldwide and approximately 9,149 deaths, as on 19th March 2020. Effect of the virus is felt across sectors as worst-hit countries suffer complete lockdown to prevent the spread. “Trade, markets and, most importantly, travel – all setting off a domino effect on the global economy”, according to Phocuswire.

People are panicky, Governments are worried and Nations are locked down to control the spread of this highly-contagious virus, but amidst all of this chaos, China reported no new virus cases in Wuhan, the origin of the outbreak.  But, worldwide, the virus is spreading like wildfire and the epicentre of the pandemic has shifted to Italy, a nation that suffered maximum casualties outside China and Iran. Even Southeast Asian Nations like India and Pakistan recently jumped onto the bandwagon after residents started returning home in numbers from countries already facing the crisis.

The Travel and Hospitality Industry is facing a complete shutdown of businesses post-outbreak after enjoying two decades of exponential growth. There are enough reasons to worry as recent trends point towards a plausible economic breakdown worldwide. But, the main question is how prepared are we to survive the pandemic? Or, how prepared are the industries, especially travel and tourism in combatting the virus?

The Travel and Hospitality Industry is facing a complete shutdown of businesses post-outbreak after enjoying two decades of exponential growth. There are enough reasons to worry as recent trends point towards a plausible economic breakdown worldwide. But, the main question is how prepared are we to survive the pandemic? Or, how prepared are the industries, especially travel and tourism in combatting the virus?

Important Statistics to Consider

Airlines have been hit hard, facing a huge drop in flights to Asia. The report says, IAG, British Airways Parent Company, witnessed approximately 8% drop in shares in a span of 10 days.

Business tourism suffered the worst hit of all, with nearly all MNCs including Nestle, BMW, L’Oréal and a few others suspending all international travels for at least a month. The International Air Transport Association or IATA warned of a major downfall in global air travel demand for the first time in 10 years, after major Airlines such as Air Seoul, Air New Zealand, Asiana Airlines, and others cut back services, as per recent reports.  In fact, IATA has predicted that airlines are likely to lose up to 113Bn US$ this year, courtesy COVID-19.

We hear the same story about the Cruise Line Industry that is in peril post-outbreak.

On the other hand, the tourism industry is facing a similar dilemma. According to recent reports, the Russian Tourism has projected to lose under 100 Mn US$ post-Coronavirus outbreak. With countries shutting down international borders and issuing countrywide lockdowns, the pandemic is set to strike the final nail to the coffin for the industry.

The ancillary businesses are also tasting the brunt of the pandemic. On-demand cab service providers, for instance, Uber and Lyft are already tasting the aftershocks greatly.

But, this is not the first time the whole world faced a major crisis. The industry did witness such setbacks in the past and had successfully overcome loses. Here is a list of examples of how the sector rode the trying times and emerged as winners.

How the industry survived a similar crisis in the past?

At the turn of the century, the whole world came face-to-face with some of the major game-changing incidents recorded in history that severely disrupted industries and lives of all those closely or distantly associated with them.

9/11 in 2001, SARS Virus outbreak in 2003, Swine Flu pandemic, and the 2004 Indian Ocean Tsunami are examples that disrupted tourists’ movement for a short period of time and negatively impacted the Global Tourism Industry. These incidents pose a real challenge to organizations, questioning their ability to survive, adapt and overcome changes.

Such catastrophes, natural or man-made, greatly affect travellers’ travelling plans greatly, according to a recent study.

Though we say preparing oneself aforehand can spare us from facing a major worldwide economic lockdown, something that experts are predicting ever since Coronavirus took the shape of a pandemic, but accurately predicting crisis like natural disasters or epidemics is difficult, if not impossible.

According to WHO, an epidemic can turn into a pandemic if the disease never appeared before and the disease-carrying agent, for example, fly, bacteria, water or air, infects one person causing serious illness and finally, the disease spreads easily among humans.

Coronavirus fulfils both these criteria.

In the wake of the H1N1 outbreak, Governments advised people to abstain from travelling to foreign countries. A similar situation occurred when SARS appeared in 2002-2003. Travellers were responsible for spreading the disease across international borders.

However, in both cases, the tourism industry resumed services after the pandemic eased out and governments made travellers feel safe again.

But, that was the time when the world together witnessed a rapid surge in technological innovation worldwide. Concerted efforts were made to help OTAs expand their businesses manifold. And despite suffering serious damages, the travel and tourism industry managed to pull a major growth in 2006, contributing nearly 5,160 Bn US$ to the Global GDP, according to Statista report.

What did we learn from past encounters?

The main question, therefore, is what did we eventually learnt from our past experiences? We have seen major loses did not stop the big players from pursuing their goals to continue riding the rough waters and shielding themselves enough to survive the aftermaths.

Investment in innovative technology grew around this time.

For example –

Post-2010 eruptions of Eyjafjallajökull in Iceland, Virgin Atlantic invested in social media campaigns to generate deeper connections with their customers to drive sales. Their campaign, ‘Looking for Linda’ promoted its travel destinations and garnered 15000 entries from its followers.

Likewise, post-Zika outbreak, Celebrity Cruises concentrated its efforts in enhancing its technological capabilities despite the tourism industry suffering immense loses. The company introduced greater personalization for customers through multiple channels and giving them a seamless digital experience.

Such incidents taught us that irrespective of suffering loses and witnessing deaths in the wake of natural disasters and pandemics, public health agencies, governments and different industry players work together to mitigate the situation and find ways to recover from the setback by weighing different options.

True market players never got caught up with the crisis but chose to move forward by improving their core competencies and finding ways to get the best out of the critical situation. This is what we learnt from our past encounters.

What are the measures taken by the industry?

What is needed at this point in time is to prepare yourself to meet a possible economic breakdown? A recent report says the U.S. travel and tourism industry is seeking 150 Bn US$ in relief as Coronavirus cripples business.

Other measures are adopted such as arranging travel funds, offering travel loans, removal of fees for permits renewal and licenses, as well as, excise exemption for liquor for both the travel and hospitality industry, seeking funds from the Center, according to a recent study.  

Key Takeaway

This situation will also pass and the industry will recover very soon, as was witnessed in earlier cases. All is needed is to follow measures as implemented by the Government, avoid crowded places and travel to Coronavirus affected countries, clean hands and stay safe as much as possible. Only with conjoint efforts can we fight away the virus and save humanity again!

About the author

Goranga Tech is one of the leading travel software company who develops various Travel Online Software & Travel Applications for the travel industry.

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