What is the future of tourism and the travel industry and what does it mean for consumers and vacationers? This is a particularly poignant issue today – World Tourism Day – which is the annual event promoted by the United Nations World Tourism Organization (UNWTO).
Before 2020, much of the anxiety surrounding the event centered around issues of over-tourism and sustainability. Now, of course, that has all changed. According to the UNWTO, between January and May of this year, international tourist arrivals were 85% below 2019 levels and 65% even below 2020. For the industry, the only positive news is that the domestic tourism has rebounded strongly in many parts of the country. the world.
From a purely financial standpoint, it is estimated that the pandemic will result in a loss of more than $ 4 trillion to the global economy and millions of job losses. And tourism is not expected to return to pre-Covid levels until 2023 or – more likely in my opinion – even later. Overall, developing countries have been hardest hit, with tourist arrivals in 2020 estimated to have fallen to between 60% and 80%. These countries also tend to have much lower domestic tourism, which could offset some of the losses resulting from a collapse in the number of foreign visitors.
But what does all of this mean for the consumer? Many of us might feel inclined to wait – or take our UK vacation – and expect to resume our normal travel habits once the pandemic is better under control. But the problem is, if too many of us continue with this approach for too long, then the consequences can come back to bite us. We can see that the travel industry has been hit so hard that the companies we once relied on to organize our vacations are no longer there.
I admit that this was a scenario I had warned against early on in the pandemic, when so many trips were canceled and (possibly) reimbursed. In the meantime, I – and most other observers – have marveled at the resilience of an industry that has had to suffer such a huge economic blow. Travel agencies are historically extremely vulnerable to economic headwinds. Let’s not forget that just two years ago, before the pandemic even began, one of travel’s biggest names, Thomas Cook, collapsed, wiping out the plans of tens of thousands of vacationers. (The brand name has since been relaunched.)
Remarkably, despite the collapse in bookings, there have been very few Covid-related failures among airlines and travel agencies. Most have found a way to survive through injections of shareholder cash, layoffs and heavy reliance on leave plans. But what will happen when the government stops leave payments at the end of this month?
Certainly, some failures of travel agencies are now inevitable. Even in good times, fall is a relatively weak month for bookings. With depleted reserves and little money coming in, it will become increasingly difficult for many businesses to survive.
The biggest impact will, of course, be on those who lose their jobs. For the most part, consumers’ money will be safe. We are well protected against financial failures through bonding and credit card protection programs. But we, the travelers, will also suffer if a significant number of operators, agents and airlines go bankrupt when the leave scheme ends.
My first concern is the loss of expertise. Travel is a complex activity that requires experience, contacts, knowledge and the subtle ability to understand a client’s needs and preferences. If a significant number of smaller specialist agents and operators fail, it could be years before this side of the industry is rebuilt.
Second, fewer businesses mean less variety. Instead of being able to choose from a wide range of companies offering a rich selection of themes, routes and departures, we may find ourselves faced with a choice of Hobson vacations. And with less choice, of course, less competition and, inevitably, higher prices.
Demand is still so low that we have yet to see a serious impact on vacation costs. But travel agencies that survive the pandemic will inevitably have to restore profitability, repay debts and replenish their reserves. The less competition they face, the more aggressively they will do it and the more we will have to pay for our trips.
The silver lining for consumers is that – for now – we still have an incredible chance to travel to a good selection of destinations at great prices. By booking and traveling now, we can not only enjoy great value for money and surprisingly quiet locations, but we will also help the industry survive and ensure that we can better enjoy our vacations in the future. .