The ongoing COVID-19 crises have brought almost all the industrial activities across the globe to a standstill. Tourism is one of the many such industries which is facing the headwinds. The industry is facing a significant impact on its revenue stream due to the downturn incurred by tourism activities across the globe. Many countries across the globe used to consider tourism as one of the key contributors to their economy. This share towards the overall development of GDP is also expected to take a hit in the near future.
The tourism activities can be categorized into leisure and essential activities. Due to the pandemic, leisure activities are expected to take a big toll as people are preferring to stay home to be safe. However, the essential travel and tourism will increase and resurge as soon as lockdown across the globe lifts and business activities resume in stages. All in all, the future doesn’t look that bright at least till the vaccines are not being introduced in the market, which looks like an overambitious task to achieve till the end of this year.
According to the World Travel and tourism council (WTTC), the Covid-19 pandemic could affect nearly 50 million jobs across the globe, which eventually will derail the growth of the overall industry in the near future. Moreover, according to the World economic forum, Asia is expected to be the worst affected region for the tourism industry and after the pandemic is over, it could take more than 10 months for the industry to get back to “new normal”.
Furthermore, the WTTC also predicts that international travel can be affected by nearly 25% which is equivalent to three months of loss of travel. Moreover, The U.S. is also one of the worst affected regions, The U.S. travel association projected a loss of nearly 4.6 million jobs through May. Alongside this, as the travel has restricted, the business for casinos and hotels has been on a downhill in states such as Nevada. All these numbers indicate the dark cloud of uncertainty presently hovering around the travel and tourism industry across the globe. The timing of the pandemic outbreak is also something that has escalated the effects. This spring-summer season is the one that attracts maximum revenue for the companies and due to the outbreak of COVID-19, the revenue streams have taken a major toss.
Travel and tourism agencies are adopting to upgrade their knowledge with regards to the new normal and the government guidelines to be followed to stay updated with the regulations. Few of the market players are adopting different strategies and focusing on designing packages comprising of domestic and short-haul international flights as they believe that those will be the first location people will prefer to travel once the lockdown is lifted. These companies in collaboration with other marketing agencies are designing innovative marketing campaigns to attract and motivate people to travel to destinations such as Victoria, Melbourne, and Ireland.
Agencies are pulling up their socks to be ready for an upsurge in business from about 4 months from now by attending different types of travel-related seminars and training their employees virtually. Industry stalwarts are assuming that the meetings, events, and incentives travel segment along with the cruise ships and coach tours will take a significant dip in the near future as people will not prefer to travel in groups.
The airlines and hotel industry are being provided a significant financial aid across the globe, however, unlike these, the cruising industry has nothing for rescue, and owing to which it is expected the cruising business will have to face a significant impact. As the regulations have increased, the cruise business owners are in fear that the business opportunities are getting diminished. This can be witnessed by the fact that shares of companies such as Norwegian, Carnival, and Royal Caribbean have taken a dip by nearly 70 percent which is a big no for the overall prosperity of the industry. However, the silver lining in such difficult times is the fact that the hotel occupancy in China has improved after the initial drop.
Furthermore, Dubai has proposed to open tourism from 7th July alongside implementing strict health measures. On similar lines, Sri Lanka and the Maldives are also planning to open their borders for tourists. All these measures are acting as moonlight in dark for the tourism industry.
What needs to be done by the companies is to understand the consumer behaviour post this pandemic, access their present business model and change and implement the new one considering the new travel habits to be back on track as soon as possible.
Aditya is currently pursuing PGDM from Goa Institute of Management (GIM). He has work experience of years in market research with number of research reports under his belt from various domains including Automobile, Energy, Oil and Gas and Construction. He aspires to make a career in marketing after completing his post graduation.