Effects of COVID-19 – Travel & Tourism
I’m watching and learning from global reaction to the spread of the COVID-19 pandemic. There’s no doubt that some countries have handled it better than others. The time for “blame games” and recriminations will come later; let’s first learn from the different types of “fallout” we’ve seen. My first article was on “Social Fallout” and last week I wrote about “Supply Chain Fallout”. This time I’ll look at Travel & Tourism.
The first major event (in China), was the grounding of all transport: buses, trains, aircraft. This spread to other countries as they, in turn, understood the need for maintaining social distancing, people stopped travelling and the demand for transport dried up.
One could also say that testing of inbound travellers started to happen about the same time. Taiwan, it is said, was checking arrivals from Wuhan back in December 2019, as they had already heard through their contacts on the mainland that “something was going on”.
Cruise lines were among the first victims of the pandemic after calling in to ports where infected cases already existed. The Diamond Princess was the first vessel to declare an emergency, but now has only 13 active cases on board, compared to the total diagnosed of 712 (many will have been repatriated and perhaps shown symptoms after reaching their homeland). Since then, cruise lines have suspended voyages and laid up ships.
Airlines grounded flights. Singapore Airlines has 98% of its fleet on the tarmac. Others have gone into administration thanks to a combination of high debt, low revenues resulting from the pandemic and (in some cases) over-aggressive expansion. International visitors have been banned from many countries
As a result of the drying up of tourists, hotels and tourist sites emptied. Disneyland in the US has furloughed thousands of employees.
Restaurants, souvenir shops, tour guide services: all have lost out. Some are closing, many more will as they see their incomes dry up, unless government aid can keep them afloat.
Countries that depend on tourism will suffer the most. In ASEAN, Indonesia, estimates a $10billion loss in revenues, with the island of Bali suffering in particular. Myanmar, wracked by ethnic conflict, predicts a 50% drop in tourist arrivals whilst Thailand forecasts a 50% - 60% fall. With tourist spend accounting for up to 11% of its GDP, this is serious. Vietnam sees a loss of $3-4billion.
Hospitality industry workers are all suffering. Without tourists, hotel guests, diners in restaurants, souvenir buyers they have nothing to do, and yet must remain ready for the time when restrictions are eased, aircraft take to the skies and cruise ships dock at their ports. For some countries, travel, hospitality and tourism will be the “kick start” that their economies need.
I’ve spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management. I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My website provides a full picture of my portfolio of services. For strategic questions that you should be asking yourself, follow me at @wkm610.
Labels: Crisis Management, Leadership, Strategy
posted by William Martin @ 09:21
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