Impact of social distancing on travel, hospitality, and luxury businesses

Impact of social distancing on travel, hospitality, and luxury businesses

Summary

  • The coronavirus pandemic put the life on hold and transformed it into something completely different.
  • Strict travel restrictions in place – less traffic and pollution greeted by the Australian government and its citizens.
  • Even though the hospitality and arts industry took a big hit during the pandemic, they seem to be bouncing back in most Australian states.
  • People are expected to choose quality over anything when thinking about purchasing luxury products.

March 2020 was the turning point for many people around the world. World Health Organisation (WHO) declared a new global pandemic, meaning the new disease is active on the whole planet. One of the many questions that folks started asking themselves was – how will my life look like once coronavirus gets contained? What is going to change?

Unfortunate for the humankind, many things have changed that were considered a regular part of life. Governments tailored social distancing and lockdown measures because they have been proven effective for diseases that include close social contact between people. Travelling abroad, or even within the same country, became either different or completely forbidden for a vast majority of the world. At one point, people could not even sit down and socialise with their friends at cafes or restaurants. When it comes to luxury businesses, it seemed like purchasing a luxurious bag or a vehicle was a thing of the past or a very far future.

Travel restrictions

World leaders knew that the only way of stopping the spread of the virus would be limiting or fully restricting people from travelling. In order to prevent social contact between individuals, public transportation, such as buses or trains, needed to limit a certain number of people in each vehicle. For instance, in New South Wales, stickers were put on each available seat with at least a 1.5 metre of distance in mind. Working from home gave people the chance of not getting to work on crowded buses, resulting in reduced travel demand. Avoiding peak-hour time became a new normal for many persons, as viruses are more likely to spread in a confined space with many people inside. When it comes to a better sense of security, people were expected to use more taxi services, with better social distancing and higher hygiene standards inside a taxi car.

Apart from public transport, car traffic also decreased, leaving empty streets, and producing less pollution caused by fossil fuels. At one stage, some police patrols were even encouraged to fine people for travelling outside their suburbs in case the purpose of going out the area was non-essential.

Once domestic travel was regulated, borders across the planet were already shut for visitors and tourists. As of 20 March, Australia closed its borders for everyone, but its citizens, permanent residents and their immediate family members decided by the Australian Prime Minister Scott Morrison in his statement on the 19 March. From now on, returning travellers are obligated to self-isolate for 14 days in a hotel quarantine, where all their needs should be met during the time residing in the hotel. At first, the government paid for the hotel bill through taxes, but as more Australians were coming home, the idea of a free self-isolation at the hotel was altered. Australian Prime Minister Scott Morrison introduced new measures, demanding each state to regulate hotel quarantine costs by their own system. Returning travellers now need to give up to A$8,000 out of their pocket. The new system was not pleasantly welcomed by everyone, with some saying public health should be paid by the public.

DO READ: Will Potential Travel Bubbles Bring a Stroke of Luck for Australian Travel Industry?

A huge hit on hospitality

With hospitality businesses being forced to close, many employees were made redundant due to the COVID-19 crisis. All of them contributed to increased unemployment numbers, reaching 7.4% as of June 2020, according to the Australian Bureau of Statistics. People in hospitality and similar industries were struggling to make ends meet, hence why the Australian government introduced JobKeeper and JobSeeker stimulus packages as financial aid.

During different stages of lockdown, more and more cafes, restaurants, and pubs were given the green light for slowly bringing back their customers, as well as employees. On 1 June, NSW Government lifted social distancing measures in hospitality services, but due to a recent outbreak in coronavirus cases, they put new restrictions in place.

Compared to food and drink venues, art scene took more damage. Most cultural events and festivals got cancelled, leaving their locations temporarily closed. For instance, the annual festival of lights Vivid Sydney did not take place due to the recommendations of the Australian authorities. As the situation in New South Wales is slowly getting under control, galleries like Carriageworks decided to open their doors to visitors, containing new art installations and exhibitions.

Demand for luxury brands plummets

It is well known that Asian consumers, particularly Chinese, are top contributors to luxury businesses. Most of the luxury purchases are made outside of their home countries, an estimated 20-30%. Due to movement restrictions, those people could not leave their countries and experience the shopping thrill. It is expected from the brands to attract and tailor a new approach for Asian customers, in order to keep going.

Even though the final COVID-19 financial damage in luxury businesses is yet unknown, it is believed they lost more money than ever. Fashion shows are the first place where influential people purchase their expensive goodies when putting themselves on waiting lists after seeing the particular item. Currently, that approach is not possible, and designers were forced to move the catwalks online, being more creative in their presentation. On the bright side, some experts believe that post-COVID-19 transition will be a gold mine for small luxury businesses, assuming consumers will put their focus on the quality of the product.

Bright future

Even though travel, hospitality and luxury brands may have got hit the most due to strict restrictions worldwide, businesses in those industries are expected to improve once the virus gets contained. People will be eager to go back to their passion for travelling, socialising over drinking coffees and choosing luxury goods over fast fashion. As the pandemic is still raging in some parts of the world, such as the United States and recently Victoria, it is hard to know for a fact when people will be able to enjoy the things they used to before. Until then, we can only hope for the best and wait for the brighter future that awaits.

ALSO READ: 3 Sectors Hopeful of Revival in 2021 – Tourism, Aviation and Hospitality

 


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