Impact of COVID-19 on travel industry
The COVID-19 effect on Travel Industry is much greater than the other industries.
The Travel industry is one of the largest sectors in the economy.
The direct and total contribution of the travel industry to GDP from 2006 to 2019( in billion U.S. dollars) is 9.31 tr USD.
The number of international tourists arrivals worldwide from 1996 to 2018( in millions) is 1,323 m.
And no sector is more at risk from COVID-19. The industry is facing travel restrictions and cancellations due to the outburst of coronavirus.
Travel Industry has the biggest effect as the virus spreads along with the flight.
Hence the industry may have to face a shutdown.
In this blog, I will discuss the impact COVID-19 on the Travel Industry And what Travel Industry should do at the time of crisis.
BRIEF INTRODUCTION OF COVID-19
The first discovery of this virus was in 2019. And has not been previously identified in humans. It is a large family of viruses that cause illness.
The transmission was from animals to individuals, and now from people to others.
Its symptoms are dry cough, cold, fever, the problem in breathing, kidney failure, and even death.
As per the reports of the World Health Organization (22/03/2020), Novel Coronavirus ( COVID-19) situations include-:
The total number of confirmed cases is 294,110.
Total deaths around the globe are 12,944.
The total countries, areas, or territories with cases is 186.
IMPACT OF COVID-19 on Travel Industry
Here I am listing four impacts of COVID-19 on the Travel Industry.
1) Severe economic impact
2) Business travel decline
3) The decline in recreational travel
4) Loss of jobs
1. SEVERE ECONOMIC IMPACT ON TRAVEL INDUSTRY
That is COVID-19’s most evident influence on the travel industry.
With the spread of coronavirus in the world, the travel industry is suffering a lot.
And its business will continue to drag if this situation continues for more periods of time.
This industry is very crucial for our economy because it supports 1 in 10 jobs around the world.
Global income from international tourism for the period 2000-2018 is USD 1.45 tr.
This industry includes a lot of other things as this industry is very diverse. It includes hotels, airlines, the restaurant part, the technology part.
The direct contribution of travel and tourism industry accounted for 3.3 percent of the total global GDP in 2019.
Comparatively, the travel and tourism industry’s total contribution in 2019 accounted for 10.4 percent of the worldwide total GDP.
There is a drop in travel across the world, this is so because people are afraid to travel and the reason is COVID-19 as it is spreading from humans to humans.
Hence, there are cancellations of tickets for trains, flights, and cruises. People are canceling their booked hotel rooms.
This leads to a drop in demand and thus hugely impacting the travel industry.
2. BUSINESS TRAVEL DECLINE
Weeks ago lots of companies across the globe started making out new policies to work from home.
Hence, this leads to a change in the future of work, its slowdown in travel, supply-chain movement, and factory productions.
As a result of the travel ban, the government is also banning mass gatherings, so businesses are arranging video conferences, communication through telephones instead of traveling and meeting.
Industry events face the immediate effect of COVID-19, with business-related events being canceled, postponed, or virtual events taking place in their place.
Here is a list of various conferences which are canceled or postponed due to COVID-19 outbreak-:
Apple WWDC(June)- Canceled, online event to be held.
DELL WORLD(May)- Canceled, online event to be held.
FACEBOOK F8(MAY)-Canceled.
Google Cloud Next(April)- Canceled, online event to be held.
Microsoft Build(May)- Canceled, online event to be held.
SaaS Connect(April)-Postponed until October 5-6.
Nearly more than 50% of business travels have been canceled or postponed and many business travels are at risk of being lost.
The industry is losing its business of huge amounts due to the nature of the virus being spread through contact with humans.
This will have a negative impact on the entire global economy.
3. THE DECLINE IN RECREATIONAL TRAVEL
COVID-19 is not only affecting business travel but due to its effect recreational travel has become zero.
Families made plans to travel in summer or other times of year canceled their plan due to this pandemic.
Youngsters plan for trips with their friends or some of them going on solo trips, they have also canceled their plans which severely affect the travel industry causing huge losses to the same.
Once people cancel their recreational trips, it is a very thin possibility for them to plan it for the same or next year again.
This is so because it is not like business trips which are to be held again at some time.
Once people change their minds regarding their recreational trips then it is not likely to plan again in the near future.
In order to avoid huge losses as a result of canceling such as travel agencies working with their airline and travel partners, new customer policies are being developed.
New policies benefit customers and the travel industry on the date change, cancellation of travel plans of customers.
Also, their support team is working to solve queries of customers.
4. LOSS OF JOBS IN TRAVEL INDUSTRY
With the pandemic taking place around the globe, many employees have to leave their job forcefully due to an increase in overheads of the company.
Especially to those who are working at low wages.
Workers with low income like housekeepers, servants, waiters, etc are suffering the most.
The COVID-19 outbreak has hit the industry economically on a global basis. People not only cancel their foreign trips plans but also domestic travel plans.
The restrictions imposed by the government cause more drop bookings in the travel industry. Hence, more jobs are at risk.
Due to this, there is a financial crisis, no revenue generation is there as there are no bookings.
It may take a year or more to tackle this problem. The travel industry if requests the government to not charge taxes or charge subsidized tax rates for a year.
Also if the limit of working capital and interest-free and collateral-free terms are double.
Postpone in payment of interest on the loan for a year.
Then this will prevent the travel industry from going bankrupt and henceforth a lot of people will not lose their job.
WHAT THE TRAVEL INDUSTRY SHOULD DO NOW?
This time when no one is booking tickets or checking travel industry websites you can also make this time productive that will help the travel industry to attract more customers in the future.
IMPROVEMENT IN TECHNOLOGY
You should work on your websites and can make it more user friendly and attractive. Technology improvements are possible by working from home.
You can optimize search engines and also update your websites and make it more customer-friendly.
LOYALTY PROGRAM
To create a loyalty program we need a lot of research and analysis. So at this moment, we have that much time.
We can analyze our customers, demography and pricing strategies to make a loyalty program.
We must design such a program that will get us a high number of bookings when everything is normal.
MAINTAINING HEALTHY RELATIONSHIP WITH CUSTOMERS
Maintain good relationships with your clients by keeping in touch with them through emails or messages.
The clients should also be updated with the efforts you are taking to fight the crises and any special packages you have added.
Learn about other countries and their cultures with the help of webinars, google, youtube. This will also benefit your travel industry.
Stay informed and updated regarding what is happening around the world.
CONCLUSION
From the above, we can conclude that there are serious effects of COVID-19 on the Travel Industry and the whole world is also facing the wrath of it.
It affects its economic condition by the decline in not only in business travel but also the recreational travel in domestic and foreign countries.
Employees are facing the problem of loss of their job as there is no wealth generation.
At this time the Travel Industry should give more focus on improving its technologies and websites so that when the problem is tackle they can easily attract more customers.
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