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COVID-19: Fast decision-making helps travel companies survive

March 22, 2020

The state of the travel industry

What now? Reduce, restructure, rebuild.

Next steps for travel companies

1. Assure public safety

What are the implications?

The industry members will need to work together to deliver personalized and relevant messages in coordination with regional health organizations as those organizations communicate that it is safe to return to travel. It is also very likely that the industry will be asked to gather and share precise traveler details and globally monitor macroeconomic, geopolitical, and environmental events, and asked to put formal, predefined contingency plans in place and then continuously update them based on these developments. In the event of a crisis, the industry should plan for the expectation that it will seamlessly coordinate a response and communicate corrective actions to customers.

2. "Wins" for the travelling public

What are the implications?

Airlines will need to radically rethink their business model towards “customer-oriented” rather than efficiency-oriented. The average cost of delivering a trip will undoubtedly rise to meet new standards which means that back office cost reduction and efficiency will be required. AI-assisted customer engagement and a simplification of legacy systems, fare rules, and operational procedures will be required to help enable Travel companies to respond in a coordinated and aligned fashion to similar incidents in the future.

3. Truly human employment

What are the implications?

Companies will be expected to take greater responsibility for the care of their people in both good and bad times. They will be expected to have plans in place that take into consideration the cultural and legal differences across regions. They will need the ability to shift large portions of their workforce from one role to another and enable them to work remotely.

4. High-speed one order

What are the implications?

The successful rebound of the travel industry means that industry members need to regain the ground lost by COVID-19. This will require cooperation across the industry to make it as easy to purchase a two-week tour of a remote region as it is to purchase a round trip ticket between two major cities. It means that a single standard like “One Order” that evens the playing field for all markets to benefit must be established.

5. Anti-trust protection

What are the implications?

The travel industry will be expected to maintain and ideally improve access to a wide selection of fairly-priced travel services. They will need to be able to expand and/or wind down parts of their operations. Furthermore, government participation or bail outs may lead to the introduction of “open access” and “fair price” regulation, creating the foundation to operate and regulate airlines as effective public concessions in a competitive marketplace. All of this must be done in a transparent way and adherent to antitrust laws globally.

6. Better than ever

What are the implications?

Travel companies will need to carve out headroom in their operating model to foster innovation. They will need to build an innovation engine that runs in parallel to their everyday operations. They will need to show improvement in their contribution to the natural environment and human performance while also demonstrating they have a business model that can sustain the effects of another event like COVID-19.

Looking beyond the immediate future

Contact us

Emily Weiss

Senior Managing Director – Global Industry Sector Lead Travel

Jonathan Keane

Managing Director – Strategy & Consulting, Travel, Aviation Lead

Liselotte de Maar

Managing Director – Strategy, Travel, North America

John Luth

Former Managing Director