A Covid-19 vaccine is unlikely to be a quick fix for the ailing travel industry, which will still take years to recover to pre-pandemic levels, according to Booking.com.
“We believe that a vaccine and/or proven treatment is critical for people to feel safe to travel again, and even then, it will be years – not quarters – before travel returns to 2019 pre-pandemic levels,” said Angel Llull Mancas, vice president and managing director, Asia-Pacific, at the online travel service provider.
If and when a successful vaccine programme is rolled out globally, the travel industry’s recovery will also be dependent on the world economy and consumers’ willingness to spend money on leisure amid a downturn that has decimated corporate revenues and triggered salary cuts and even redundancies for many workers.
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To date there are several potential vaccine candidates that are undergoing clinical trials, but the World Health Organisation said widespread vaccination against the coronavirus is only likely to be achieved in mid 2021.
Travel is one of the industries hardest hit by the pandemic, as international borders have closed to stem the spread of the disease. In the first half of the year, hotels in Asia-Pacific were estimated to have lost at least US$50 billion in revenues as 80 per cent of them had to cease operations temporarily at the height of the pandemic.
The global aviation industry, excluding airlines, is likely to lose US$2 trillion this year, according to an assessment by Zhang Lei, founder and president of the Institute for Aviation Research, an independent think tank.
“The pandemic has had an immense impact on many industries across the region, including travel, due to travel restrictions all over the world and the sheer unpredictability of the virus,” said Llull Mancas. “The travel industry continues to be under significant pressure as the world continues to grapple with ongoing outbreaks, limitation of cross-border movement and health concerns which deter many from confidently exploring beyond their homes.”
Those willing to travel these days prefer domestic travel, beaches and nature trips. Alternative accommodation – anything from campsites to tree houses – is also popular, accounting for 40 per cent of new bookings on the platform in the second quarter.
Drive-to destinations are becoming more attractive as tourists are less likely to travel by plane.
“Since the beginning of the pandemic, we’ve seen a dramatic uptick in the use of specific words used by guests when they ask questions about a property. For example, the use of the words ‘clean’ and ‘hygiene’ have both increased by over 60 per cent,” Llull Mancas said.
Demand for international travel could fall by as much as 80 per cent this year, and recovery to pre-crisis levels could be stretched into 2023 if the global economy sinks further amid a worsening coronavirus pandemic, according to the worst-case projections of consultancy Euromonitor International released in June.
“On a more granular level, [hotel] properties that have been previously dependent on business travel may see their [average daily rate] reduced due to less corporate travel, and it may not return anytime soon, especially for the MICE segment,” Llull Mancas said, referring to meetings, incentives, conferences and exhibitions.
This finding is echoed by the latest data from global payment services company Mastercard. An analysis of its networks found that as of July, consumers in the G20, a group of 19 wealthy nations and the European Union, are spending within a “home-centered retail radius” as people travel and spend closer to home.
Another finding is that smaller hotels are faring better – their rate of recovery is more than 50 per cent better than larger ones.
More from South China Morning Post:
- China’s post-Covid-19 travel industry sees green shoots with tourists embracing short trips, luxury stays in lessons for global operators
- Coronavirus: Hong Kong’s screening system for airport arrivals holds lessons for travel industry in post-pandemic world