TROTTINGS*

 

Travel: back to the ‘old normal’ – tomorrow

Not quite, but soon, very soon – two months?

 

This tentative, and tenuous, belief is based on a few developments:

 

-Markets where covid coronavirus cases are rapidly falling are rapidly opening. However, the definition for ‘rapidly’ is in the eye of the beholder – as well as a continuous reduction in new cases over the previous 10/14 days.

 

-Rapid (every 48 hours?) easing of restrictions. Remember those reports, only weeks ago, picturing the ‘new normal’ – aircraft centre-seat blocked, plastic separation-shields, airline cabin-crew in hospital-like protective clothes, and so on?

 

-Vaccines, etc. Despite the fact that hydroxychloroquine has been largely dismissed as a possible cure, there are now frequent (almost every week?) reports of other treatments, the latest being dexamethasone.

 

-Continuing speculation that a vaccine may be discovered as early as September – which is only about two months away. Although ‘discovered’ is not necessarily the same as ‘available’.

 

 

That said, there are many not-minor potential problems. They include:

 

-Some travel operators – airlines, hotels, rentalcar companies, travel agencies, ground/tour operators, etc – have run out of money.

 

-And many travel operators are close to running out of money. It is no good knowing that you can fill all the aircraft’s seats if you cannot afford the fuel for the plane to take off, or the landing fee at the destination airport, or even the salaries of hotel check-in staff.

 

-And many of those that have not shut down, might be very close. That would normally mean pushing up prices to make up for their peak-covid losses – but potential travellers might not buy if prices were not low, which means prices at before-covid levels.

 

-Potential travellers might not have time or money for leisure travel so soon. That said, many fortunates received government support – some generous – and not much to spend it on. Could that positive cancel out the negative out-of-money?

 

 

NFAs (no-frills-airlines), particularly Ryanair of course, are trying to motivate potential travellers with low fares. For this near peak-season period, many fares are lower than before-covid.

 

But those low fares may be short-term motivators – say for July only. If there were a reasonable (an airline’s management would decide what is ‘reasonable’) response in the market, will prices jump starting August? And would fares noticeably-higher (noticeable to the customer) slow the recovery?

 

For inbound leisure travel, some destinations plan onerous conditions for visitors. In Cambodia what can be considered a US$3000 bond. In the Maldives, various conditions on travellers and the industry that appear designed to steal money from travellers, not to reduce risk (some of the more unjust have since been eased). Although these will slow visitor recovery in those destinations, the thrust of the moves will be negative – but even for travellers to other destinations.

 

Will visitors wonder whether they are welcome or not? Cambodia and Maldives are effectively saying No.

 

In turn, negative moves or sentiments might push some travellers to consider domestic travel, or near- or ‘friendly’-destinations. That, however, in itself, is not necessarily a problem.

 

Still not clear is when we will start to see moves in the direction of the ‘old normal’. Perhaps only when 2020 totals are added will we know. Our comments are based on a return to normal, not a recovery of what has been lost.

 

The WTTC*, in its best-case scenario*, forecasts that covid will have caused a -41% fall in all-2020 arrivals, and -26% in domestic travel.

 

For a return to our ‘old normal’, our indicators are necessarily complicated – because at the time of writing, covid is still growing fast in some countries – notably Brazil, US – and regions, notably South America.

 

Our recovering regions are Europe (except Sweden, UK), most of Asia (despite recent outbursts in China, Japan, Korea), Australasia (although Australia seems reluctant to reopen, possibly because it can profit from growth in domestic travel).

 

For those recovering regions, we would need to see – for domestic travel plus visitor arrivals:

 

-July. Minus 10-20% traveller-plus-arrival numbers.

 

-August. Minus 5-15%.

 

-September. Minus 0-10%.

 

-October. 0%.

 

-After October. A possible slight fall for the northern winter as some travellers will have taken ‘late’ travel July-October, and may not be ready travel again so soon. However, that may be countered by the hopeful recovery of the still-hurting places such as Brazil, US.

 

 

*Notes:

-Best-case scenario: Current (in early June) measures starting to ease from June for shorthaul- and regional-travel, from July for medium-haul, from August for longhaul.

 

-WTTC – World Travel & Tourism Council – is a lobby group for the travel business. It has its own methodology for calculating the turnover of the travel business including not just inbound, outbound, and domestic travel, but other industries involved in the business. For instance, if 0.5% of the world’s cars go into the car-rental business, that measure would be calculated into the turnover of the overall travel business. It terms all this a travel GDP (gross domestic product), which we usually reduce to TGDP.

 

-Unfortunately, WTTC is not always clear that its data is related to this grand total, and often its commentary appears to be related to just one sector – often, the inbound visitor business. In addition, it sometimes uses the terms ‘travel’ or ‘tourism’ alone; we cannot always determine if these mean something different from ‘travel & tourism’.

 

-WTTC’s name does not help – the ‘TT’ is ‘travel & tourism’, where we would define ‘travel’ as covering all segments of the travel business, with ‘tourism’ meaning ‘leisure travel’ to most observers, just one segment. This means that most people and bodies the WTTC lobbies may think they are discussing just inbound leisure travel.

 

-WTTC reports that the travel business in 2019 represented 10.3% of world GDP.

 

 

 

 

The Fox.

*Trottings = Travel Jottings

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