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24. March 2021
by Varun Sharma
This eight-letter expression – which has a different level of severity in every country - is having a catastrophic effect on businesses associated with the hospitality industry.
Without people flying, hailing taxis, eating in restaurants, tipping bellboys and staying in hotels, travel is wobbling.
Office-based companies have been increasingly utilising internet video-tools like Zoom, Teams and Whereby to try and mitigate losses brought upon by COVID-19, but local curbs on mobility means that even the prospect of a holiday staycation has come into question.
In past years, I could sit here and comfortably report that 20% of all travel is deemed as luxury and that it generates over 65% of the total revenue for the travel industry. This year those figures are meaningless…
We have not been here before.
I was travelling extensively immediately post-9/11 and during the SARS crisis and our industry reacted swiftly and with calm. Airlines repositioned their aircraft tactically and accommodation providers prepared for a temporary slowdown in demand. However, these terrible events were localised and for the rest of the world, it was business as usual.
Travel agencies – even ones exclusively at the high-end – got through these difficult times by simply shifting their clientele from one continent to another.
COVID-19 is a worldwide pandemic and therefore nowhere is deemed totally “safe”.
Airlines are now struggling to reposition aircraft and indeed are mothballing much of their fleet and in some cases just shutting up shop – permanently. The hospitality industry is having to move its COVID hygiene goalposts on a weekly basis and many new hotel/restaurant openings have been pushed back indefinitely.
Every country has its own rules with some protecting lives over the economy and indeed some not.
I have been watching the global stock market achievers of late and the luxury goods sector has fared better than most. While the affluent cannot travel and spend in-transit, they are shopping from home, letting the keyboard splash their cash.
I also noted that after every country surfed over the first and second waves, there was a marked tick-up in the luxury travel sector as the travel-desperate, cooped up for weeks/months, escaped at their first opportunity and escaped in style.
A third and worryingly a fourth wave is taking hold in most parts of the world and now fresh plans are being made for future travel. The UK is gearing up for the reopening of hotels from April – after several false starts. The hope is that with so much of the population receiving vaccinations, hospitality will soon be back to normal.
Every day there are public pleas coming from international airlines and hotel executives to Governments begging for financial aid. Without this help, many of these previously successful companies will go to the wall putting millions of people out of work.
Most countries have instigated a blanket aid policy to the travel & tourism sector with no discrimination to whether you are a budget or luxury product. This has not always been in the case.
Going back to my now defunct figures from above, only 1 in 5 travel in luxury. So should Governments just focus its aid on the mass-market?
In 2003, I was a frequent visitor to Hong Kong during the SARS outbreak. The whole area was under lockdown – it was a veritable ghost town devoid of tourists – from mainland China or indeed the rest of the world.
Chek Lap Kok Airport – used to handling hundreds of thousands of passengers a day was seeing just dozens of confused souls passing through its kilometres of freshly carpeted corridors - it was painful to watch.
Hong Kong boasts some of the finest and most “luxurious” hotel brands in the world from the Four Seasons and Mandarin Oriental to Peninsula and Ritz-Carlton.
There are also a plethora of budget hotels catering for backpackers and those with humbler means.
I was having dinner at a small noodle bar just off Wellington Street with Kim who worked at the Concierge Desk at my outrageously plush hotel. With her was her lifelong bestie Flora who ran a clean and anonymous no-star hotel some distance from the bright & flashy lights of the Harbour.
While they worked on different sides of the tracks, they dined together once a week to talk about life, work, and boys.
It was clear to me that they both were suffering desperately from the drought of tourists and business travellers.
The owners, major shareholders and invariably upper management of the luxury hotels wear Armani and are paid more than enough to take a financial hit - but those who work Reception, restaurants, Front Desk and Concierge depend largely on tips to supplement their basic wage.
Kim the Concierge had four brothers and sisters - of school age – she and her Father were the only earners in the family. Without Kim’s “full” wage, the whole family suffered.
During the day, you would see her standing behind a gold-leaf festooned Concierge Desk, dressed-smartly, with a ten-million-dollar smile and she would – at any usual time – confirm reservations at the finest restaurants or source you that elusive 5,000 Euro tub of face-cream. Yet, she went home every night to a 2-bedroom high-rise apartment, two hours away on a train to her very different (but love-filled) homelife.
She and Flora equally depended on tourism and the all-mighty tourist-dollar.
Today, no-one knows what the future will bring. We live in hope. Vaccination programs are being rolled out in a majority of countries – some faster than others. Incredibly swathes of people are turning down the “jab in the arm” due to chat-room gossip. With travel passports reportedly soon to be introduced, no jab – no travel, will become the norm. The forward-thinking airline carrier Qantas has recently announced that passengers who have not been vaccinated will not be welcome to fly their services. On a basic level, bars & restaurants and hotel groups are on the verge of making the same requirement.
I welcome Governments which make COVID-19 vaccination mandatory.
The mood music is more soul than funk - but the tempo is picking up.
While I am trying to strike a measured message, I now, more than ever, realise the power that Mother Nature wields. Underestimate her at your peril. Whether it be volcanoes, earthquakes, or drought – She is in charge.
It is pleasing to see that travel agencies and tour operators around the world are anticipating the death of COVID-19. Airlines and hotels (the ones that are still standing) are preparing for 2021/2. Indeed, later this year the Tokyo Olympics “will go ahead” - albeit currently without fans, while the World Cup in Qatar, the following year, is gearing up for record numbers of visitors.
All fans of travel must now tirelessly promote their favourite airlines, hotels, resorts, bellboys, airports, countries, spas, vineyards, cities, race tracks, islands, diving sites, deserts, islands, inns, private jets, cruise ships, helicopters, taxis, safaris, golf courses, restaurants, bars, tourist attractions, museums, waiters, holiday parks, housekeepers, trains, distilleries, castles, ranches – basically everything connected to the industry – luxury or not … as without the promise of travel, life is bleak.