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

Summary

1. Prolonging tough days for Tourism, Aviation and Hospitality
2. On an optimistic note, with the border reopening and increased demand in 2021, the industry is hopeful for a revival
3. Local tourism with utmost measures ensuring the health and safety of the travellers as well as industry workforce is going to be the New Normal

Tourism, Aviation and Hospitality industries are all interlinked with one another. Each one’s success or failures can impact the other. Though novel coronavirus (COVID-19) pandemic has ravaged major countries across the world, this resulted in tremendous damages in Tourism, Aviation and Hospitality industries as well.

It’s been only a few months into the coronavirus crisis, but industry experts are already forecasting its effects in the near future. The future is uncertain and unstable, and the results on the market are quite evident. Even though the spread of the virus is slowing down, it may surge again with its second and third wave; hence the disastrous impacts on these industries are also snowballing.

The World Travel and Tourism Council’s (WTTC) report says, more than 197m travel and tourism jobs will be lost due to prolonged travel restrictions. Currently, many countries have placed a blanket ban on international travel. The impact of extended travel restrictions could also wipe out US$ 5,543 bn in the sector’s contribution to global GDP. Millions of people’s livelihoods depend on a thriving Travel & Tourism sector.

The International Air Transport Association (IATA) delivered its report on the financial outlook for the global air transport industry. IATA believes the sector is expected to lose US$ 84.3 bn in 2020 for a net profit margin of -20.1%. But on an optimistic note, with the border reopening and increased demand in 2021, the industry is expected to be cut losses to US$ 15.8 bn as revenue many rises to US$ 598 bn.

Owing to the contamination risk, tourist and business travellers are choosing to travel locally, closer to home with drivable distance. Though the global hospitality industry is in critical condition, after bottoming out, the industry is seeing signs of life. The data suggest as the countries are reopening with the first phase of domestic travellers, hoteliers across the globe recognise the light at the end of the tunnel. The Hospitality Sales and Marketing Association International (HSMAI) Europe latest research shows the industry in dire need of revival and cannot remain fixed to the pre-COVID way of working.

Their report states,

• 43% of guests will only stay again at hotels if there are strict corona guidelines
• 29% believes customers will only book direct with their trusted brands
• 36% stated that a contactless stay empowered by technology would be the new standard especially for check-in, check-out, F&B orders

Also read: Tourism Sector's Challenges And Strategies During Covid-19 Crisis

Post-COVID crisis, the travellers, are cautious and are only willing to take the risk of venturing out if the trip meets with all the possible guidelines pertaining to the safety.

Tourism industry-

The Australian tourism sector is expected to face A$55 bn hit through the next financial year. The reopening of state borders is very much uncertain, and international travel ban too may remain until 2021. With these restrictions in place and travellers choosing to stay home, tourism industry expenditure is forecast may fall from A$138.5 bn in 2019 to A$83.8 bn. These predictions have come from the Australian Trade and Investment Commission in their May 2020 report.

The report shows that domestic holiday activity is expected to drop 26 per cent to A$40.2 billion in 2020-21, with 13% to A$19.5 bn drops in Domestic visits to friends and family. Local business trips are expected to reduce 35% to A$16.9 bn.

Experts believe the economic impact would be much severe if the domestic travel restriction in Australia is not lifted soon. The health and safety measures for travellers and the industry workforce are paramount. That’s why the Gloria Guevara, WTTC President & CEO, recommends opening ‘travel corridors’ between countries who have controlled the spread of the virus. This will provide immediate support to the Travel & Tourism ecosystem and be vital to kick-start economic recovery, followed by rebuilding the livelihood of millions.

The culinary tourism is also severely affected due to the disruptions in operations in both the travel industry and food & beverage industry.

Adapting global health and safety protocols will also ease the burden from travel operators.

Last month Australian Prime Minister announced the international travel ban might extend till July 2021, Aussies preparing themselves for more local and virtual travel. Australia tourism board have already revamped its national marketing strategies. Tourism Australia and Tourism Western Australia did a remarkable job in launching virtual extravaganza for hungry travellers.

By arranging virtual tours to the pristine beaches of west cost or dancing on the tunes opera music or learning to cook exclusive Aussie secret recipes, Australia tourism with their tourism campaign Live From AUS, has managed to keep the travellers engaged online.

Domestic tourism hot spots like the Gold Coast have increased their ad spent to attract more local travellers.

Trans-Tasman travel bubble is also threatened with rising COVID-19 cases in Australia. Last week both Australia and New Zealand prime ministers discussed the possibility of reopening borders for both countries but yet to reach an agreement.

Also read: Trans-Tasman Travel Bubble to Decide Fate of Travel Space Amidst COVID crisis?

Aviation industry-

Travel restrictions for international travel will be another reason that medium and long-haul destinations will suffer, ultimately hampering the aviation industry. To survive the airline industry may have to cut the services and increase the airfares. This may not please the customers who are probably already planning the virtual meetings rather than spending on expensive and risky air travel.

Reduced passenger demand and inadequate cargo demand, the aviation industry also faces high debt scenario. As of now, airlines are highly dependent on domestic travel. IATA expects long-haul travel to resume ‘not so soon’.

In June 2020, when airlines started to restart operations, Melbourne Airport welcomes 123,887 passengers, but that was still down from 1,963,625 in June 2019. However, Sydney Airport recorded a bit positive data, with the domestic passenger in June more than double in May.

Hospitality industry-

Will life get back to the post-COVID scenario? Experts believe, not in the foreseeable future. With the government announcing an extension of its Jobkeeper scheme, the Accommodation Association of Australia and Tourism Accommodation Australia have expressed their gratitude. Jobkeeper scheme has been successful in maintaining employment for 30,000 people, about 75,000 people have already left the industry. Australia’s major accommodation organisations have applauded this positive announcement.

The multi-billion-dollar scheme will be reduced from its current A$1,500 per fortnight to A$1,200 from October through December and then to A$1,000 for the final three months in 2021.

Tourism Accommodation Australia CEO Michael Johnson believes that international travel is uncertain for at least 12 months; hence domestic tourism is the only way out.

Restaurants and bars are coming up with innovative ideas like offering gift cards.

With an emphasis on local tourism and ensuring the health and safety of the travellers as well as industry workforce is going to be the New Normal. All the major sectors,

Tourism, Aviation and Hospitality, are revamping their strategies to sustain in this crisis, and going forward will implement newer game plans. The operators remain confident that Australia will recover soon and remove restrictions starting with state borders. All this while following the orders from health experts.