COVID-19 and Travel Businesses
March 10th, 2020
Reading the news headlines about COVID-19 can lead to panic and perhaps even some misinformation. While COVID-19 isn’t just hype, the media frenzy may be leading to fear and panic buying of toilet paper, water, hand sanitizer, face masks, and more. The contradictory headlines of “don’t panic” vs. “pandemic outbreak” are wreaking havoc on how consumers are getting accurate information and are affecting the world economy.
Concern over the spreading of the virus has resulted in many canceled conferences and sporting events, and more. Many out of the box solutions are being found — like holding the sporting event but not allowing spectators, making events online only, or postponing until a later date. Some companies are encouraging employees to work from home. These solutions are prudent and wise.
Additional consumer demand on household products like disinfectant, hand sanitizer, toilet paper, water bottles, and more has boosted these market segments as a consumer reaction to start preventative measures. Also, online shopping and entertainment sectors are also increasing. Consumers can shop for products online without disruption and can also watch or participate in online entertainment. No matter how you look at it, COVID-19 has some tricks left and is likely to surge and recede before it runs its course.
Now with the Centers for Disease Control and Prevention (CDC) recommending postponing or canceling travel to high-risk areas, some consumers are postponing and canceling all trips. The CDC does not recommend canceling or postponing travel to level 1 locations. Even with these clear guidelines from the CDC and with no federal restrictions in place to prevent travel within the United States, the travel and tourism industries are suffering disruption.
The World Tourism Organization (UNWTO) has revised its 202 prospects for international tourist arrivals to a negative growth of 1% to 3%, which is an estimated loss of $30 – $50 billion in international travel. Before the COVID-19 outbreak, projected tourism growth in the US was 3% to 4% in 2020. The impact of the COVID-19 epidemic will affect the whole tourism industry. UNWTO Secretary-General Zurab Pololikashvili says that “small and medium-sized enterprises makeup around 80% of the tourism sector and are particularly exposed with millions of livelihoods across the world relying on tourism.”
How do these tourism enterprise businesses combat this decline in tourism? UNWTO and the World Health Organization (WHO) have issued a joint statement calling for responsibility and coordination in working together with the tourism sectors. “Tourism’s response needs to be measured and consistent proportionate to the public health threat and based on local risk assessment, involving every part of the tourism value chain — public bodies, private companies, and tourists, in line with WHO’s overall guidance and recommendations.”(UNWTO)
The International Air Transport Association (IATA) has warned that the “2020 global revenue losses for the passenger business of between $63 – $113 billion, depending on the spread and containment of COVID-19. As bleak as these statistics are, the good news is that the tourism sector has consistently proven its resilience and ability to bounce back and lead to wider economic and social recovery.
Predicting the speed of market recovery is a tentative assessment at this time, due to different sales strategies. Setting realistic short-term, mid-term, and long-term goals helps with implementing a growth plan. Clear and direct communication with customers, as well as regulatory agencies, will help uphold a positive public response when the outbreak stabilizes. “In the early days after the SARS epidemic, the confidence of the traveling public was low, and no substantial immediate rebound was (planned). This lack of communication with the public slowed the recovery.
We can learn from the past. Tourism channel segments can stay connected with their clients for their health and safety, as well as their travel and reservation policies. Frequent communication with updates about cancellations, restrictions, or other measures will increase trust in your offerings. Transparency towards the customers will help you prepare and respond appropriately when the COVID-19 has passed the peak.
Preventing the spreading of germs is a realistic solution for slowing COVID-19. The CDC does recommend:
- Avoid close contact with people who are sick.
- Avoid touching your eyes, nose, and mouth with unwashed hands.
- Stay home when you are sick.
- Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
- Clean and disinfect frequently touched objects and surfaces using a regular household cleaning product.
- Wash your hands often with soap and water for at least 20 seconds, especially after going to the bathroom; before eating; and after blowing your nose, coughing, or sneezing.
- If soap and water are not readily available, use an alcohol-based hand sanitizer that contains 60%–95% alcohol.
After the end of this epidemic, tourism will have a shortened recovery period. Focus on those most valuable customers by optimizing your marketing and communication plans. Perhaps offer additional bonuses or services when customers book through your agency. Individual business travelers will be first to return to traveling as compared to larger meetings and group travels.
In the interim, focus on forecasting energy, labor, and unnecessary expenses. Can you eliminate the need for overtime? Or could you encourage employees to take annual leave during your slow periods without having to have a replacement for their position? Throughout history, the hospitality industry has never been completely destroyed in any tough period. Although we can not completely prevent COVID-19 from spreading, we can launch into recovery mode now. The future of the travel industry is positive, and we know that healthier days are coming.
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