How COVID-19 is affecting the travel industry’s future

COVID-19 Overview

When the first few cases of COVID-19 occurred within China’s Wuhan region in December 2019, nobody could have predicted the devastating impact it would go on to wreck upon the world. As of April 20, 2020, more than 2.4 million people worldwide have contracted the virus and of them, over 165,000 people have died. 

Countries around the world have declared themselves to be in a state of emergency, and more than a third of the global population is now in some form of ‘lockdown’; aside from grocery shopping and working in necessary frontline jobs (such as medical roles or in supermarkets), people in cities and towns across the planet are currently forbidden from leaving their own homes. 

Almost every person and industry in the world has been impacted by the spread of COVID-19, but few industries have been hit as directly or greatly as the tourism industry. As travel bans and restrictions come into force and people find themselves unable to journey further than their front door, every element of the tourism industry – from flight operators and hotels to travel agents and tour guides – has taken an unwelcome blow. 

Industry statistics

A March 2020 survey of 162 travel and tourism organizations carried out by the Adventure Travel Trade Association (ATTA) shows what we all already knew: the present situation (and the future ahead) looks bleak. 

84% of respondent companies (largely tour organisers and operators) told ATTA that they had either a ‘somewhat negative’ or ‘negative’ outlook of their prospects, while booking demand fell by around 63% for 2020’s 2nd quarter as a whole. Cancellations dramatically rose, and ATTA estimated that survey respondents had lost roughly $14.3 million in revenue as a whole already this year. 

While 32% of the ATTA survey respondents were hopeful that operation would return to normal during the 3rd quarter of 2020 (July – September), the global situation continues to change rapidly on a daily basis and companies are presently facing serious concerns about paying employees, handling cancellations and keeping staff and customers safe. 

Travel restrictions

A number of travel bans and restrictions are currently in place across the world, with a large number of countries (including Japan) adopting measures to minimise the potential for imported COVID-19 cases to enter the country. 

As a result, airlines are naturally suffering severe losses. Japanese airlines are expected to lose around 1 trillion yen this year, with major carriers such as JAL and All Nippon Airways expecting to lose around 400 billion yen in revenue in the first half of the year alone. 

Of course, the travel restrictions are impacting not just airlines, but all aspects of the tourism industry. For the first time since 1964, Japan saw a 93% drop in visitors during the month of March. Rather than the overwhelming influx of visitors expected during the Tokyo Olympics, the Japanese tourist industry is currently facing the reality of several months with hardly any international travellers at all. 

Negative outlook

The highly-awaited Tokyo Olympics have been rescheduled for summer 2021, which should come as a welcome boost to the Japanese tourism industry after months of poor sales and limited profits. With that said, there is still a considerable amount of fear that even after a year, COVID-19 could have an impact on the games. 

In April, a leading Global Health scientist from the University of Edinburgh in Scotland publicly announced that if a COVID-19 vaccine is not widely available by the start of next year, then it may be ‘very unrealistic’ to think that the Olympics can take place. 

With scientists predicting that the creation of a COVID-19 vaccine could take around 18 months at least, the most recent expert opinion is that the current worldwide state of ‘social distancing’, travel restrictions and limited movement could continue for as long as two years. If this is true, then the impact on the tourism industry (both in Japan and overseas) will be devastating. 

Next steps

As things currently stand, it’s impossible to know exactly what the future holds in regards to the COVID-19 situation. China, which is believed to have been where the virus originated and enforced the first of a global series of lockdowns, has begun to lift travel restrictions and aims to restore the country back to its pre-corona state. 

As a model of success, China appears – on paper – to be the perfect example. After just 10 weeks of lockdown within the city of Wuhan, life can once again resume. Yet before other countries can begin to look to a similar future, they must first acknowledge the fact that new COVID-19 cases, both asymptomatic and otherwise, are cropping up within the country every day. It would appear that even after weeks of strictly enforced quarantine and limitations, China is yet to defeat the virus. 

With warnings of second and even third waves of the virus coming from expert circles of leading scientists, there is no way to accurately predict when tourism will restore to normal, nor can we guarantee that the way we travel will ever return to the way it previously was. For this reason, it’s important that companies and organisations across the industry begin searching for alternative ways to “future-proof” themselves; from entering the domestic travel market to delving into the virtual reality experience world, now more than ever there is a need to be creative and adaptable if companies hope to survive. 

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