By Aradhana Khowala CEO & Founder, Aptamind Partners
OPINION / TRAVEL
WILL TRAVEL & TOURISM BE
COVID-19’S BIGGEST CASUALTY?
we are dealing with a potentially proliferating, multi- dimensional risk landscape with long term consequences and more questions than answers
W
hile the far-reaching impact of coronavirus on the travel, tourism and hospitality sector is not fully clear, the pause on travel and the disruption on the movement of billions of people, their associated expenditure and its sudden displacement has had massive ramifications on national, regional and local economies and employment across the world. If the listed stocks are indicators, Airline stocks are down 40%; hotel stocks are down 30% and OTA’s are facing a massive hit to revenues with global booking decline of 10%. The Aviation sector is in a crisis zone as plummeting demand has meant cancelled or reduced routes, voluntary unpaid leave to staff, hiring freeze and delayed or cancelled aircraft orders and
10
March 2020 Tourism India
What was not a problem two weeks ago because it was not my problem is today everyone’s problem. Businesses across the value chain are moving to survival mode which means preserving cash reserves, stepping up emergency cost-saving measures, reducing costs, negotiating and seeking extensions or capital cost reductions and the banal task of trying to survive and remain in business till the crisis unfolds so when demand and consumer confidence returns you are in a position to take advantage of it. now weaker carriers going out of business. The situation is no different for hotels and extended value chain in the sector and the base case assumption is that businesses would be impacted for the whole year and beyond.
A WORLD OF UNKNOWNS
What we know from recent events, market and consumer behaviour over the last two weeks is we are dealing with a potentially proliferating, multi- dimensional risk landscape with long term consequences and more questions than answers. The biggest anxiety is being confined into any space – cruises, airlines, hotels and worse being quarantined. Even the most rational amongst us tend to experience a complete lack of ability to shut the panic button off. It is a frustrating situation which is exacerbated in the case of Coronavirus as we are wading in a world of unknowns including if business interruption with
