The Corona Effect on the Tourism Industry

The Corona Effect on the Tourism Industry
Challenges loom ahead Photo Credit: Shutterstock

Rupali Dean
April 08 , 2020
07 Min Read

The Covid-19 pandemic has placed the tourism industry under immense financial strain. What has unfolded around the world in the past couple of months is unprecedented. In this time of uncertainty, all industries are reeling but it is the tourism and hospitality sector that has been hit the most given all the border closures, travel restrictions and lockdowns. Airlines, cruise operators and hotels are seeing instant effects of the pandemic. 

Within the industry, experts say that mutual collaboration, sharing of information and linking up efforts towards common goals, have perhaps never been as important as they are today. “The only thing we can currently do is to stay united, remain safe and stand strong because we are all in this together," says Riaz Munshi, President, Outbound Tour Operators Association of India (OTOAI) & Managing Director, N.Chirag Travels. "We need to channel our energy towards innovative ideas, attend webinars and enhance our knowledge and skills. I believe that problems, such as the current situation, are not stop signs. They are guidelines that will teach us, prepare us and make us stronger. So we need to stay positive and be ready with new ideas to bounce back. But right now, our priority has to be safeguarding everyone against Covid-19, and to care for each other."


Loveleen Multani Arun, Founder Director at Panache World, Bangalore thinks it may be too early to spot signs of what consumers will do and in what kind of time frame. "It is a wait and watch scenario," she shrugs. "Thankfully, at Panache World, we are very adept at putting out domestic as well as international short-haul programmes. Because it is quite likely that people will want to do this kind of travel first, once the lockdown is over. We are keeping ourselves active, attending webinars, collaborating with our industry peers and making sure that we look after our employees with whatever bare minimum we need in order to survive these difficult times."

Loveleen Multani Arun, Founder Director at Panache World, Bangalore

The tourism sector is founded on good communication between people. “We are keeping the interest in the destinations alive so that consumers have a desire to travel there once the restrictions are lifted," say Beena Menon and Huzan Fraser Motivala, partners Beautiful Planet Destination Marketing. "We are doing this through PR, social media and by working with the travel trade. The current lockdown is giving us an opportunity to train a large number of travel agents about Ireland and Victoria as destinations. Since people are stuck at home and digital and social media usage has gone up significantly (by 1.4 %), this is the right time to get people’s attention and get them to think about visiting destinations like Melbourne, Victoria, Ireland, or start thinking of a trip to Al-Ula... People can be inspired to travel during the lockdown phase, and look at what destinations they would want to go to."  

Shravan Bhalla, Chief Executive High Flyer, India says they are encouraging the lockdown and believe things will go back to normal soon. "However, on the business front, we are making sure our team is prepared for business after about 4 months from now, by doing various specialist programmes on countries as well as by attending travel-related webinars." 

From travel to flying and hospitality, the industry will incur enormous damages globally as this was the first industry to get affected and it may well be the last to recover. “Once the situation settles, we predict travel to resume initially with weekend staycations, road trips and domestic getaways. This will be later followed by international travel," says Riaz Munshi. "However, if the government doesn’t step up to help and revive the travel industry, a number of companies will shut down resulting in huge unemployment. Even after things get better, we do not expect an overnight recovery, and in order to sustain that, it is essential that the government comes up with a stimulus to support businesses and facilitate their recovery.”

Travel as we knew it, before the Covid-19 breakout, will take several months to bounce back, say experts. “Even when it does, travellers are hopefully going to be more mindful about where they travel to," says Loveleen Multani Arun. "They will appreciate the destinations more, they will look at ways to connect with them, a bit deeper, and I do think that they will also slow down their experiences in each place. There will be more demand for the less crowded destinations and people might (thankfully) avoid the crowded, popular spots such as Venice, Paris, and Barcelona. Hopefully we will get over the over-tourism problem."

There is a lot of uncertainty as to when things will get back to normal. Flight connectivity, enactment of budgets and customer confidence are all vital factors in deciding what the future looks like. “Business travel will definitely reduce since people are getting comfortable and accustomed to doing business on video conferencing. VFR and leisure travel will definitely pick up once travel is determined as safe because there will be a pent-up demand for holidaying and meeting their family. MICE business is likely to be impacted in the short term, since due to the lockdown, performances of companies will be affected and they may not invest immediately in MICE trips. Coach Tours and cruise ship business is likely to be affected too since people will not want to travel in large groups,” says Beena Menon and Huzan Fraser Motivala.

Safety is one of the most important factors when one plans to travel. “Regarding Indian travellers, we expect a very small movement to countries which are affected the most due to Covid-19 for the next six months," says Shravan Bhalla. "Post the lockdown, we expect only business travellers, VFR’s, and student travel movements. We will also see leisure travellers int less affected countries. Initially, there will be longer waiting hours and extensive Covid-19 checks and body screenings at various international airports. This can be challenging specially for travellers who are unwell, elderly people and passengers travelling with small children”,.

Shravan and Minal Bhalla

Here's an international perspective to the issue. The government of Azerbaijan has taken the necessary steps to slow down the spread of the virus. “It has also injected a stimulus into the economy to ease the hardships faced by citizens," says Florian Sengstschmid, CEO of Azerbaijan Tourism Board (ATB). "Four working groups have been established to prepare specific initiatives to support the economy, local businesses and entrepreneurs, employees and their social protection, as well as support the currency and macroeconomic stability. They have also quarantined all those entering the country to flatten the curve and prevent spreading the virus further. A few four and five-star hotels have been converted into quarantine zones. Notifications are regularly shared with the people of the country about status of the outbreak, there's complete transparency. The State Tourism Authority of Azerbaijan is exploring new options to overcome obstacles, both for locals and for visitors. From social media to e-learning platforms, hackathons and webinars, the team is doing its best to keep Azerbaijan’s flame ablaze. This crisis is a first for our industry, and our drive and ambition to overcome it, to recover faster and stronger, is a real testament to what this business stands for: collaboration, adaptability and flexibility."

Florian Sengstschmid, CEO of Azerbaijan Tourism Board (ATB)

Sengstschmid points to a recent study undertaken by Global Web Index which showed that in some markets, as many as 50% of consumers have, voluntarily or not, cancelled upcoming trips. Instead of travelling, 70% of people are spending more time on their smartphones, staying in touch with loved ones virtually, or delving into a new TV series. "As the world sees a major shift in habits today, it has also giving us the opportunity to slowdown, re-assess priorities, and reflect on how travel will change in the future, and why it will still matter," he says. "As humans, there is an innate desire in us all to explore. So, once the borders are open and flights are back in the sky, I believe people will get back to travelling again. How travel habits change is yet to be determined, however we do feel that people will look at travelling to less crowded destinations – perhaps those that aren’t considered popular. I believe they would like to explore unchartered territories, new countries, unravel hidden gems, and discover diverse cultures."


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