The state of the travel industry
The COVID-19 pandemic is a health and humanitarian crisis, and it is also an economic shock. The outbreak has initiated an undeniable call to action for the travel industry to now rapidly assess these fast-changing developments, and the ensuing impact on their people, their customers, and their organizations. Currently, passenger travel and tourism is a public health hazard as well as a global economic problem. Travel companies are now making rapid decisions that will affect their very survival.
What now? Reduce, restructure, rebuild.
As demand falls and as borders close, the travel industry is reducing today at an unprecedented pace. Cruises have stopped, many airlines have stopped all scheduled service and hotel occupancy is low. The industry will be restructuring soon - and the fortunate travel companies will pass from restructuring to rebuilding for a new normal.
Next steps for travel companies
Because passenger air travel is the fastest vector for virus transmission, it is the most dangerous path for a resurgence of this economic crisis. Governments are recognizing this at different speeds, but the end outcome is clear: most, if not all, borders will be shut to people for as long as the virus circulates. The recovery for this crisis will only start when measures have been taken and travel is judged safe. Domestic passenger aviation will resume first, followed by international travel on a bi-lateral basis. When proven safe, national aviation systems will open back up to each other and the flow of people will again begin.
Government support is coming, with strings attached
Government support to economies is beginning in earnest. Travel companies need to be prepared to address the demands that will be placed on them when they accept the funding, irrespective of the source. Assuring public safety, creating wins for people and other themes can help travel companies 'reset' and potentially come out better than ever. The determination of those strings will be political, and the industry still has time to work with politicians and others to shape those demands for stronger, safer, and more resilient travel.
We anticipate these "strings attached" will be focused on creating "a new normal" for our industry, centered on the following themes:
Looking beyond the immediate future
The COVID-19 outbreak has resulted in dramatic disruptions to Travel leading to new paradigms and many cases, permanent shifts. Companies will be forced to make quick decisions to ensure short-term confidence and longer-term business sustainability. What will be needed to meet the urgency of today and the demands of tomorrow? All Travel companies immediately decide how they will improve in the six key themes we’ve outlined and address how to re-size and re-engineer their organization for a new normal. Many will apply new technologies to facilitate immediate responses, but these could pave the way for longer-term strategies that improve overall resilience and competitiveness.