The impact on international tourism of COVID-19 is the equivalent of five to seven years of growth, the Global Travel and Tourism Resilience Council was told this week.
Nina Wittkamp, expert associated and partner and McKinsey & Company, estimated the financial hit to be worth around $300 to $450 billion, far higher than the 2008 global financial crash.
But she said many travel companies have quickly pivoted to focus on the future while navigating lockdowns to secure their survival.
“It’s important to take both a short term and a long term view,” Wittkamp said. “A granular return to travel requires short term initiatives which may prove costly but will preserve the sector for the long term.
“We see lots of support in up-skilling now and advanced forms of customer service across the sector and investment in new products to improve productivity in the industry.”
Wittkamp said the industry needs to see enhanced travel insurance options and will see revised visa restrictions and that firms should prepare for various possible scenarios.
“No one has a crystal ball that can accurately predict how the future will unfold. We believe it’s critical for the sector to prepare for multiple scenarios.
“The crisis is bringing new challenges for the travel and tourism sector. We are dealing with a reduction in demand and a number of consumer trends leading to a new normal and new opportunities.
“We see lower consumer confidence for at least the foreseeable future, but willingness to travel in some geographies will remain.
“There are signs of recovery with some people willing to travel this summer, but a lot of borders are still closed.
“It will be a very granular situation depending on geographies. We will probably see some consolidation in the industry with mergers and M&A and businesses are likely to carry more debt and high fixed costs which could become unsustainable.
“We will see new eco-systems for collaboration with health agencies and also science to develop new protocols to stay focused on the customer journey.
“Consumer trends are increasingly moving to digital channels, people will prefer local brands and there will be high expectations of hygiene and health and safety.
“People will spend more time researching what the experience will look like, what are the terms and conditions for booking a trip. Across all segments customers will look for flexible booking options.”
Wittkamp said the COVID-19 crisis is a health crisis but also a crisis for people’s livelihoods.
She said it is a false choice between the two and it is vital to safeguard both people’s health and economies.
“But the stakes have never been higher,” she said. “Travel is going to come back. It provides experiences, and people want those over just having things.
“We are already seeing interest in online searches [for travel], but it will take time.”
Wittkamp said forecasts for the sector for this year are “dire” although domestic travel is likely to come back and she said firms need to be more agile and invest in technology to serve customers.
But she said “we see lots of co-operation opportunities across the industry to bring back confidence”.
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