Overview
Prior to COVID-19, travel and tourism had grown to be one of the most important industries in the global economy, accounting for 10% of global GDP and employing over 320 million people worldwide. In 1950, at the dawn of the jet era, only 25 million people travelled abroad. By 2019, the figure had climbed to billions of dollars. For many economies, the travel and tourist business had grown to almost unfathomable proportions.The global pandemic, the first of its kind in a new era of interconnection, has put 100 million jobs at risk, according to the United Nations World Tourism Organization. Many work in little and medium-sized businesses that employ a large number of women, who make up a large portion of the tourist labour. Tourism-dependent countries are likely to face the brunt of the crisis’s impacts for a much longer period of time than other economies.
Travel between countries
We can expect an increase in international travel within nations. With manageable and moderate COVID-19 cases and vaccination availability. As long as death and hospitalization rates remain low, these regions are willing to accept rising case levels. A large proportion of the population in numerous European countries and the United States has been immunized. Such people are confident enough to travel both locally and internationally, thanks to the implementation of safety measures such as the EU-issued digital health certificates given to people who have been vaccinated against COVID-19. Despite variable rates of new caseloads in these places, the vaccine’s efficacy (to reduce the spread of the disease) has been demonstrated thus far.
Bringing back the capacity
The most immediate objective for all enterprises in the travel supply chain is to restore capacity or, at the very least, ensure their ability to do so. Many contracts and temporary workers in the restaurant business who were laid off during the epidemic have found new occupations and are hesitant to return to their previous positions, resulting in a labor shortage. Last year, more than one in every 10 workers in the United Kingdom departed the hotel industry. In the United States, there was still a shortage of about two million leisure and hospitality employment in April, which was significantly worse than before the outbreak.
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Commercial approach
Travel firms may need to reconsider their business strategies. Airline passengers and hotel visitors will have different profiles: more leisure guests, later booking periods, and a greater demand for flexible tickets. Historical booking curves are no longer a reliable predictor of future behavior. To forecast demand and improve pricing, travel businesses must use every source of information available to them. Flexible pricing structures can also alleviate customer anxiety in the face of today’s increased levels of unpredictability. EasyJet, for example, now offers a Protection Promise program that allows travelers to make free adjustments up to two hours before their departure. Hotels will need to find other uses for meeting and conference rooms, which will be more difficult to fill. Airlines must figure out how to fill intercontinental business class, which is most likely to be done through premium leisure promotions. The growth in passenger numbers may be greater than the boom in earnings for all travel companies, as the most profitable corporate business has been late to return.