The resilience of the travel and tourism industry
By Vinay Malhotra, Regional Group COO – South Asia, Middle East & North Africa and Americas, VFS Global
The COVID-19 pandemic has sparked much introspection among business and industries globally, with travel being no exception. While the travel world is possibly never going to be the same again in terms of how businesses and travellers view services being offered at every step of their journey, experts expect a recovery of the travel and tourism industry by mid-2021 or even later. According to a March report by McKinsey, recovery pace will be faster for domestic travel, which can be around two to three quarters and slower for long-haul and international travel, which can be over six quarters.
The positive side to this is the opportunity for the industry to rethink their existing operations and think more expansively and sustainably about the future and perhaps even act on once-in-a-generation ideas. For instance, health and hygiene will take precedence moving forward and we will see changes in business and social interactions in public places, including visa application centres, airplanes, and popular sightseeing spots. There may also be a surge in more niche models, such as wellness and health-related travel, with a more centred and balanced lifestyle becoming the new way of life.
A resilient industry
The World Travel & Tourism Council (WTTC) has predicted a global GDP loss of USD 2.1 trillion in 2020 from just the travel and tourism industry. In terms of international tourist arrivals, the World Tourism Organisation (UNWTO) expects it to decline by 20 per cent to 30 per cent year-on-year in 2020. A majority of our own VFS Global Visa Application Centres for 64 client governments across 144 countries of operation had been closed, temporarily. That should give you a sense of the impact to all businesses in this space. That said, our centres are already re-opening in more than 40 countries at present.
However, past experiences have shown the travel and tourism industry to be extremely resilient to geo-political and economic shocks, as seen during the 2008-2009 financial crisis and the 2003 SARS outbreak. Starting with business travel, and then VFR (visiting friends and relatives), travel will slowly and steadily regain traction.
The changes ahead of us
Travellers will look for an assurance that all touch points during a journey have adopted the health and hygiene aspect, in addition to security. Online or ‘contactless’ transactions could become preferable, while guidance from travel agents and customer care will become more important as well. Technology will become an important enabler in ensuring an enhanced customer experience, and companies should explore solutions that allow travellers to maintain social distancing norms as much as possible while offering a high standard of service.
We are confident that when the situation improves, the travel and tourism industry will rally and show a positive trend. This is an opportunity to emerge out of complacency and carefully monitor the evolution of the crisis and its impact on the industry, and align services to cater to new demands – indeed, an opportunity to be a part of the paradigm shift in travel while ensuring a more comfortable experience for travellers remains our top priority.