The corona virus put world wide travel to a still stand in March, now in June some countries are slowly reopening and kick starting their domestic and even international regional travel, but when will demand fully recover ? What needs to happen for recovery ? What are the different phases we can identify and what are indicators that signal a recovery for your destination ?
In this blog we collected indicators from dozen of sources to help you to create your own scenario, which will be different for every country and company. Creating scenarios are helpful because this enables you to work agile, based on your scenarios you can define your strategic options and plans and roll them out once the phase starts.
Possible Recovery Scenarios for the Tourism Industry
Before discussing possible scenarios we have to understand that even though its about months (July 26 ) into the crisis we still don't know a lot of things. And while making a scenario realize you cannot build predictions on what you don't really understand, and you can not extrapolate developments under highly uncertain, unstable and for regions different and conflicting conditions. Because that involves making assumptions about how unmeasurable things affect other unmeasurable things.
Especially the time table of a vaccine and implementing a vaccine, immunity of people and the way how social distancing and lock down measures to prevent the spread are implemented by different governments are highly uncertain, as well as shaky confidence by travelers, this all results in difficulties to plan but how and when tourism will return back to profitable numbers.
Unanticipated and unintended consequences of purposeful action can be positive, but also negative or ‘perverse’ (Merton, 1936), think about allowing travel in exchange of privacy.
Even though prediction is difficult we can make certain assumptions and work out different scenarios if we list out our uncertainties.
Uncertainties : what are the things we don't know yet at the moment but do have an impact on the recovery of travel within (domestic) and to your country (inbound)
- How does the world build up immunity for the virus (with larges groups of immune people its more difficult for the virus to spread and cause risks while traveling)
- When will there be a vaccine widely available
- When the corona virus in the region or in the country be under control
- When will in country travel restrictions lifted
- What will be the social distancing policies of the country
- When will my country allow international travelers to come to my country again
- When will other countries lift the travel ban to our country
- What kind of health measure will there be for international traveler
- What are the policies of countries where our inbound travelers have to transit
Which indicators can you look at to predict when which phase will start.
Availability of a vaccine and the implementation of that vaccine.
Time lines availability: Most Positive - Early 2020 - Realistic Mid 2021 - Negative End 2020
Time lines implementation: Most Positive - 2nd Quarter 2021 - Realistic 4th Quarter 2021 - Negative Never
More and more people start warning a vaccine might not be the answer, but that we have to live with it. And adapt to it accordingly.
Amount of testing by a country : do traveler feel they are safe (don’t get change to get corona) -
Amount of testing by an incoming country - do service providers and citizens & communities feel safe to receive people from a country. (Riots in china after people from Hubei spread again over country, Tour guides refusing to work with Chinese)
Country policies - allow domestic travel once virus stabilize (China) or once the virus is Rooted Out (South Korea)
- Surveillance measures ? like coronamap.site in South Korea
- Cluster, state or country approach ? In Asian countries like Singapore, south Korea we see a cluster approach, there is nation wide social distancing and other measures, but severe lock downs happen around clusters. However in early April. clusters keep on popping up. In China these new cluster can lead to severe measures like locking down the whole harbor of Guangzhou.
- How do people react on reopening - In china nature experiences did very well (to well) and then were in some parts closed again.
- When will big events like sport games and festivals reopen ?
- Bookings - currently (7 April) bookings in the Netherlands are practically dead until august (this is domestic and nearby countries. People are scared and practical issue are playing a part, for example the toilet blocks in hostels and campings, cities etc.
People love to go out and lot of people are willing to take certain amount of risk or are ignorant for risks.
Early indicators for recovery can be
How will domestic airlines deal with social distancing in different parts of the world.
How will people approach big events: sports games, festivals etc ? Will this give them confidence ? How fast will that go ? What kind of people go.
Organised Travel Trade Show - which ones will be the first ? Where ?
Phases needed for Travel to come back:
To look at which phases we can identify we can look at national scenario's. Most countries have something like:
Dealing with the first peak of covid-19 victims, making sure the health system can cope. Most countries chose for a lock down to prevent the virus from spreading.
Slowly open up society, note most countries don't even have a road map for this (April 2019), because to many uncertainties.
We do know that non essential international travel is going to be one of the latest things to be opened.
And we do know that social distancing will be one of the key policies to avoid spreading during this phase.
We are slowly going back to a normal situation in which international travel is allowed again. Hower its not sure that the new normal will be the same as the old one.
The phase starts when countries have widely implemented a vaccine, international cluster management in combination with surveillance became reality or wide spread immunity is reached.
All of them are not expected before the end of 2020
Normalization will take place region per region.
Lets discuss what will happen when with the travel industry
After the first protect phase of making sure the medical system of the country is able to cope with the number of covid-19 patients, and the situation is more or less under control, countries will slowly open up in phases.
Re-Open Regional Domestic Phase 1
- Big nations will go from country wide approach to local lock down measures and start to open Small Scale Leisure activities within the vicinity of home
- - Small near city and instate leisure and nature activities mainly to replenish physical and mental capacities will be started up first with caps to make space for social distancing.
- There is big pressure on governments to open up from business as well as early travelers that want to go out this leads to initial enthusiasm and crowds, but it looks like that in most countries the majority is in a wait an see mood, the spike in recovery of attractions like restaurants doesn't seem to lift off, though in other countries even sport matches with ten thousands of people gathering are allowed.
- The world wide protests for equality for everyone and the black lives matter protest could contribute to more confidence towards group gatherings. In early august 2020 we see crowds at beaches, significant amount of people are not scared.
Early signs opening:
- Most countries make road maps to ease the lock down and health and regulations domestic tourism is part of the opening and comes after shops, restaurants and services like beauty parlors and barbers are allowed to open again.
- People are allowed to go to their holiday homes again and or visiting friends and family.
How does reopening for domestic travel look like ?
- Opening in most countries will go careful and with "strict" health and social distancing guidelines for hotels, restaurants, transport and attractions.
- Some countries will have health screening at attractions, transport and at other public places.
- Social Distancing will still be obligated in most countries and when places are getting to busy people are send away.
- Capping on the capacity of attractions and advance reservations.
- In China we saw opening and closing of attractions and areas in the beginning. Because new clusters were detected and too many people gathered at same places.
- Anxiety for the virus prevented people to go out in massed though some popular places can become crowded by more adventurous risk takers.
- Its interesting that domestic travel and international travel is opened up before the majority of communities feel comfortable in opening up for travelers, in June only 47% of people in the USA felt comfortable in opening there communities to travelers.
Which and how many people will start domestic travel again?
- First people with green health codes ?
- -> China green health code: just a few hours a day (Wuhan) (to prevent big distances), also measures only one person per household per day.
- Countries might apply surveillance techniques that we see in China to scan peoples health risk before they are allowed to enter a museum, cafe, restaurant etc.
- In the early stages of the crises, some groups were suggesting that immune people should be allowed to travel, but there is a catch if immunity isn't provided through a vaccination. -> That people are going to game the system and want to become immune through getting sick, which is a threat to keep the health system under control. Later the whole immunity was questioned since some people got positive again. For domestic it ended up mostly that accommodations and attractions screen the health of visitors and the social distancing and the wearing of masks need to prevent the spread of covid-19.
2 groups of travelers - early adopters that will rush to go out, and a conservative watch and see group
- There are 2 groups, people that are very eager to go on holiday - and they will all book at the same time (as soon as they can), while others are scared and are in a wait and see mode.
- There is a big generational difference in the willingness of travel : almost all young people are willing to travel in July 2020, while only about a third of the 55+ people.
- This will result in a first big peak form early adapters after which more conservative people will slowly follow.
- Another reason for a sharp peak is when a rebound happens in the 3rd or 4th quarter of 2020 is that people need to finish their holidays, some companies allow their employees to take over more holidays to the next year and some companies asked their employers to take leave days during lock down, but there are still significant amount of people that "need" to finish their leave days. After sitting so long in their homes, the urge to go away is high with lot of People. In China they experiment with reducing the numbers of working days a week.
- In China Hilton said half April 2020 that occupancy was 22% (from 9%) early February.
- In China we saw an early peak of bookings around the Labor day holiday.
- In China during the may 1 holiday, several hotels sold out.
- Mainland China’s average hotel occupancy ended the week of July 11 2020 at nearly 53 percent
- In New Zealand we saw that on Saturdays in July 2020 occupancy of hotels was about 75%
- In Vietnam domestic travel started up slower than expected during the first holiday (labor day) after travel restrictions were loosened on April 23, people were mainly scared to take flights. Two weeks after 1st of May Vietnam recorded their highest daily new cases. Though still low about 20 -25 and after that quickly returning to a few or none a day.
- In the Netherlands opening up of restaurant did not come with a demand that suddenly all restaurants were bookend, the high segment was doing the best.
Travel Experiences products popular after covid-19
- McKinsey says 11 may 2020: after lock down the first thing people want to spend money on is eating out the second is travel.
- Research published in June 2020 : 97 percent of USA respondents would be traveling this summer via road trip, while air travel is expected to drop by an astounding 73 percent. Rail, cruise ship and bus travel are also expected to fall by 86 percent.
- In Korea people were first allowed to do drive through activities, enjoy nature from their cars. In other countries we saw drive in cinema's, concerts and watching football on screens just outside the stadium.
- Remote, solitude and small scale leisure activities or activities based on self guidance are products to focus on.
- Outdoors, Parks, Mountains, Outdoor sports like golf, cycling, running
- Beach destinations are doing very well in early recovery bookings in several countries world wide.
- Small cities and communities
- Self Drive Trips
- High End Luxury Private & Remote Experiences
- Holiday homes, Self catering chalets or RV's where you have your own place will do well as being one of the safest ways to go on holiday, they could eat demand away from hotels. Camping and RV places with private cleaning opportunities are also very safe option for travelers.
- Longer stays in combination with working, as working from home became more common people see opportunities to book a long stay in a destination while still working.
- Hotels seem more sloppy in recovery then holiday homes, according to Deloite research 30% feel safe to book a hotel. (mid may)
- Hotels might get a cap on their occupancy like they plan in Turkey and in Mexico.
- Our own hotel recovery dashboard shows growth in several Asian destinations but growth is with care, Japan and Thailand show the best recovery up to September 2020. In Europe most countries show a promising V shape recovery in hotel searches upto june.
- Increased use of contact less technologies.
- Their will be a lot of attention on how service providers keep their customers healthy. Hotels, restaurants and other facilities will get new health sop's.
- Some big hotels will have separate covid-19 areas in case you get sick, you are transferred to that area and are taken care off
- In the early stages, managing demand is important to avoid overcrowding of popular spots, big crowds might be actively discouraged until deep into 2021 or with second and third waves coming even longer.
- Crowd managing and social distancing measures will be installed at beaches, musea, restaurants and other attractions. Ticket systems, time slots for different groups, for example older people can go to the beach in the morning, others in the afternoon.
- Especially bars, clubs and indoor venues with alcohol and loud music that make people scream or come close to each other to be able hear what the other says appeared places where new herds popped up.
- In China visitors of public places are required to register via a Health QR code on their AliPay or WeChat app connected to their identification card, which must indicate green, or healthy, before they are permitted entry.
- Demand from China shifted towards independent vs group travel.
More changes in travel experiences post covid-19 travel bans.
When will domestic travel return ?
Opening up for domestic travel is very different per country because the phases of each country are different.
Most countries in Europe opened domestic tourism in June. Some countries, like Netherlands, Sweden, Norway allow domestic travel earlier or never forbid it as long as health policies like social distancing are in place.
- The return of travelers going on domestic holidays in Vietnam was lower then expected (while the country was very mildly hit (about 250 cases till re-opening)
- In the Netherlands holiday homes bookings in the second half of April 2020 for later in the season were up 40% compared to last year. (it's one of the few safe ways to travel having you own home.
Domestic opening in Asia
China already opened for domestic tourism in March 2020
Vietnam opened for domestic tourism in may
In Japan domestic travel will slowly be started in June with support of the government but with caution, entertain park Universal Studio for example will open 19 June but only for visitors from the region.
Thailand is opening domestic tourism since July 1, there are several crowd managing systems in place including pre registration of visiting national parks. There are also health screening measures when taking transport.
Indicators for return domestic travel
- Opening up for in dining and of cafes and restaurants
- Lock-down re-openings go in phases of around 2 weeks, after which governments and health experts can evaluate the data and decide on more relaxing measures. Some countries however choose to give road maps how the open up step by step. Later we saw that pressure of road maps opened up countries that didn't have the virus under control and it started to rise, like in the USA.
- The reopening of domestic travel will in most countries be based on the ability of the health care systems to cope with a rising number of patients. When cases seem under control and ICU's can cope pressure to open up will build up. Loosing measure will result as long as there is no vaccine or the virus is active in growing cases and deaths. If these are low and mostly under older and vulnerable people the public opinion will be fine, but if young people or large numbers of front liners have to sacrifices lives in order for others to travel or have leisure experiences the opinion could turn around. This will also depend if a country is able to open and close clusters and or if they prefer regional or country wide rules to be clear to the public.
Concerns : Harvard & Princeton Research showed the impact of mobility on the spread of Covid 19: 10 percent reduction in mobility stands for a reduction of 17 - 27 % drop in covid-19 cases per capita, making travel restrictions and lock downs, to the most effective instruments to reduce the spread. Thus sudden region or even country wide lock downs are always a threat when the virus is still around and there is a lot of mobility.
Re-Open Country Domestic Phase 2 - Open the whole country
Nations go to virus cluster measurement - identifying and locking down of clusters where the virus is active - Capped leisure activities allowed in the whole country.
If a country is big like China, USA and others, countries might first allow states to open and later the whole country.
- Small (none essential) interstate travel will be allowed, where some states won't accept citizens from other states (which could result in tension) and or installing obligated quarantine of self quarantine measures from visitors from other states like in what happened in May, June, July 2020 in the USA. Maybe some cities and communities lock themselves in this phase. (Happened in China, in Spain cities lock themselves, and also in Nepal). The different measure like for example quarantine measures for people from other region will initially lead to confusion of what is allowed where.
Which people ?
- Though many people are still scared there are also many who have a very strong desire to go out. This might lead to spikes in bookings and unavailability to cater all, because everyone is going at the same moment.
- In China you saw (19 April) that a lot of people were extremely eager to travel for (1st may, labor day holiday) , bookings and flights are up significantly from the moment people are allowed to book.
- Flying: different carriers take different health measures like, temperature checks, middle seats empty and other. Read this eyewitness report of experiencing domestic flying in Thailand that shows the change in domestic flying.
- Other changes during flights are less food, prepacked food, less flight attendants and other measures that reduce contact and or cut costs.
- Most EU countries have been opened in June 2020.
- Though domestic interstate travel is allowed in most states in the USA. In September 2020 still only 42% feels somewhat comfortable to do a domestic trip in the upcoming six months.
For an overview of travel openings checks the travel opening website from Skift.
Re-Open Inbound Travel from selected countries
Initially nations were careful, but pressure to open up for the holiday seasons of summer 2020, made countries open there borders, mostly for selected countries. Policies vary very much per country. Countries changed policies frequently, internal measures as well as outbound travel advices to other regions.
- - None Essential Travel bans within the country are lifted and Domestic travel will be encouraged : since corona virus is still present in other countries border stay sealed.
- - Very small scale business international travel might start - heavy screening for those who travel and possible 2 weeks quarantine on arrival.
- Probably only short haul countries with direct flights since transits might be cumbersome.
- Countries will lift travel advises to certain countries and try to form travel bubbles.
- Travel advises and the negotiations between countries to ease them among each other will define which travel bubbles will open up. Do countries allow their citizens meeting other foreign travelers that might be of a higher risk group ? In the visiting country or during transit ? How will our citizen react on opening for risk countries ? All questions that impact to what kind of selected countries a country can and will open up to.
- Countries and regions open up and close, rules change based on cases going up and down due to new outbreaks and waves. In July 202 it happened for example that the UK suddenly installs a 14 quarantine for people returning from Spain. We have also seen countries introducing negative travel advice overnight like for example the Netherlands did for Croatia in July 2020. The opening and closing and changing rules, erodes trust among travelers and will delay a full recovery. Travelers are unsure what they can expect when travelling out of the country, what will happen when rules change, will they be able to go back etc.
How will regional travel reopen ?
- There is a group of people very eager to book and do international travel, however this could be an initial peak that flattens again because the majority of travelers is avoiding risks until there is vaccine.
- An article in Bloomberg in June 2020 claimed the amount of people willing to fly dropped from 60% during the Covid 19 peak to 45% in June.
- The booking window might be very short, companies should prepare themselves for a sudden wave of bookings when travelling is allowed.
- Airlines will start flying when there is enough demand, this depends per destination.
- However Airlines will start flying with loss if they expect a profitable line in the long future. They do this to secure their slots at the airports, if they don't fly the slot might go to a competitor.
- Initially IATA made a suggestion airlines maintain some social distancing measures and don't put planes fuller then 2/3. (Currently an airplane needs to be 2/3 full to get to a break even point). In early May IATA came with new suggestions, which include mandated face masks and temperature checks. IATA says social distancing is not needed in airplanes because of the vertical airflow and the way people sit, spreading of the virus in an airplane is low. A suggestion that is taken over by many governments.
- Flights might first be more expansive, then suddenly really cheap, because there will probably be over supply in the number of airlines, competing on a limited number of routes, leading to a price war, that will result in a shake out, after which tickets become more expensive again especially when social distancing and new health measures become the new norm. If a flight can only fly with 2/3 of its normal occupancy ticket prices have to increase around 43% and 54% some sources even claim future airline ticket prices could double.
Health Measures Airlines during reopening
- Many airlines are introducing temperature checks and or let passengers wear obligated face masks including Korean Air, Air France.
- Some airlines like AirAsia and Qatar are letting there flight hosts wearing PPE outfits.
- Some airlines introducing rapid covid-19 test before boarding like Emirates.
- Transit countries like the United Arabic Emirates demand testing while entering but also transiting the country.
Travel Experience during reopening
- Because many forms of social distancing measures are still in tact experiences could be very different than we are used from before the covid-19 era.
- Some destination will demand visitors to download a health / screening app on their phones during their travel
- Some countries during this phase will install quarantine on arrivals to get into the country. Some actively check and trace during these quarantine weeks and arrest when rules are violated like Hawaii
- Countries like (Austria) offers testing on arrival or demand PCR result proof before arrival to avoid quarantines. The PCR in advance testing is putting a burden on test facilities in source countries, which are sometime even unable to do testing in time like in some parts of the USA during end of July
- Contact less innovations for check-in, entering hotel rooms, payments and other solutions will be introduced in a fast pace rate.
Indicators to look for when re-opening could take place are:
- Residents are allowed to return home, they are also the ones who are able to go through long quarantine procedures.
- People are enjoying cafes and restaurants in as well outbound as inbound country.
Travelers Concerns to deal with
- What are the health and safety rules, is there a change i can get into quarantine ?
- Could my home country suddenly block the borders, is there a change that i will get stuck ?
Who are early travelers after covid-19 ?
- Solo travellers planning longer trips and willing to undergo quarantine might be first travellers to test the water.
- Young travelers upto 35 years are suggested to go first because they are less vulnerable for the virus, however the economic crisis hits them most, they have no reserves and are the first to lose jobs.
- Millenials are the one with the least financial buffers in the west and also the ones who are hits most by the recession.
- American research shows people between 50 & 64 are least worried that they will get coronavirus.
- Demand on long distance destinations might grow slowly, American research shows a lot of people first want to build up confidence with domestic travel, but they also want to keep financial buffers.
- After a peak of people who have been waiting to go on holiday (early adaptors) demand might fall back and then slowly grow to levels before the pandemic which might take years.
- Early travelers are those who are risk takers, adventurous people, outdoor lovers and maybe those who are immune and in some countries have a "green code" that allows them to cross borders. For most countries and accommodations travelers need to sign a health declaration to be a able to travel or stay.
- Adventure Travelers, Family Groups first, Group Travel will recover slow.
Criteria Travelers will look at to travel after covid-19
- Public health and safety standards.
- Drop of number of cases in their own country
- Drop of number of cases in transit country
- Drop of number of cases in country of destination
- Travel Advisories
- Restriction policies of country of destination
- Quarantine and border control policies
- Possibility to experience the destination, opening of restaurants, attractions hotels, national parks etc
Which Destinations will open when ?
When regional travel will reopen depends per region. Underneath an overview of re openings per continent. Many destinations planned opening in the 3rd quarter of 2020, but due to second waves there is still a lot of confusion and changes. According to the UNWTO at May 18 100% of all the countries had at least some form of travel restriction while 75% of them had their borders completely closed.
CNN reports that Australia and New Zealand are discussing on creating a travel bubble in which their citizens can travel to each others countries. They are talking on maybe opening up for each other in August. Other countries on the radar to be slowly added are according to the CNN article, Taiwan and Hong Kong and maybe a few pacific islands.
Asia - Arrival & Travel rules
- Singapore has flying suspended till mid / end December. But opened several "green lanes" with China, Brunei, Indonesia, Japan, Malaysia, South Korea and Taiwan. Essential business travel is allowed as long as a business applies for the travel request and a swab is taken max 48 hours prior to arrival. Singapore is in talks with New Zealand & Germany to do the same. Travel Advice Singapore.
- Singapore create an special zone with hotels, meeting rooms and conference space for business travelers to meet, you can go in without quarantine for max 14 days and have to do a test every other day.
- Japan will open June 2022 for package tour travelers.
- Thailand opened for international tourists with a Special Tourist Visa target on long stay visitors, there is pcr test on arrival and a 2 week long quarantine.
- Korea, in December 2020 all none essential incoming travel is suspended.
- Qatar Airlines will open 50% of its routes by June (note opening a route could vary from once a week and upwards) capacity is also used for cargo.
- Chinese airlines are allowed to fl once a week to one destination per country, this policy will probably last till at least july 1.
- Sojern sees early planning activity (april 2020) in its database from Asian travelers from Hong Kong, Indonesia, Philippines, and South Korea for the december holiday.
- Research shows that Chinese urban travelers showed interest in Thailand again (end of April 2020) mostly for the October 2020 month.
America - Arrival & Travel rules
Antigua and Barbuda: Opened June 4 - Latest policy changes August 9; All travelers need negative Covid 19 Test before arrival. All people first need a 14 day quarantine.
British Virgin Islands - Opened December 1 - Register in advance, negative pcr test, 4 days hotel quarantine
St. Lucia: Opened June 4 - Show Covid 19 Free Certificate on arrival, Temperature check on arrival, Temperature checks in hotels. Travellers from all countries are allowed, but travelers who come from non travel bubble countries can only stay in their hotels and do certified tours and activities.
Turks and Caicos: June 5
Aruba: Opened in phases from June 15 for Caribbean Countries, Europe, USA & Canada, you need to fill in a health declaration and some states in the USA need to do a PCR test before boarding. Other visitors have the option of either testing before arrival and or upon arrival but then movement is restricted until results are out. South & Central American Countries are banned. Travel Insurance is obligated.
Jamaica: June 15 - Travelers have to fill in a travel authorizations form in advance, that have to be presented when boarding the airplane and while on arrival.
St. Barth: June 22
USA, Mexico, Canada over land borders stay closed till june 22.
US Virgin Islands: Opened June 1 , Closed again on August 19, after cases spiked and reopened after a month on September 19 - Temperature check on arrival, 50% capacity in buses and safari, reserve restaurants in advance, proof of negative covid 19 test or 14 days of quarantine.
Bahamas: July 1
Barbados: July 1
Bermuda: July 1
Bonaire: July 1
Dominican Republic: July 1
Puerto Rico: July 15
Turks & Caicos is planning to open on July 22.
Cuba: Late August
Cayman Islands: September 1
South West plans to start flying to Mexico & Caribbean destinations from June 7.
In Europe the Baltic states: Latvia, Estonia and Lithuania formed a travel bubble in may 2020.
Most countries in the EU are opening per June 15 or July 1 for European or Schengen visitors excluding UK & Sweden citizens. Though with several restrictions considering social distancing and health measures. Travel from and outside the EU is not advised (thus not insured) and comes with a 14 day quarantine.
Paris icon and most famous museum of the world the Louvre is planning to open on July 7 while other iconic Paris museums open earlier.
Though heavily hit in March & April and Lombardy still struggling Italy opens open up borders from June 15.
Seychelles: open for listed countries, countries allowed have a threshold, if covid 19 cases in these countries go up, those countries are not allowed, when they go down, the countries are allowed again. All visitors need a negative PCR test (including children)
On Cheaptickets there is a map which countries are open on google data studio .
IATA has also a world map with travel restrictions, including latest rules if you click on a country.
Normalization Re-Opening Inbound Travel from most countries
Normalization of inbound travel from most countries can only happen if whole regional blocks have managed to control covid-19 which can only be done when the availability of a vaccine is widely available.
However some countries that have very effective trace and measure rules could open their borders for the whole world, think about China, Korea.
It's a possibility that the new normal will be very different, that long haul will be much more exclusive and destination will focus from on regional visitors from countries in their own continent. And then this phase might never return as we thought it will.
When will world wide inbound open ?
The uncertainties per country are immense and many factors that have nothing to do with health issues also play a role, like for example what are insurers willing to insure. In the beginning of may 2020 insurers start to exclude extra cost because of covid-19 and you can also not cancel anymore because of covid-19. This means that if there is a certain outbreak in a country you booked your holiday too and you don't want to go anymore, the insurance won't pay. Or if you are in a country that suddenly goes into a lockdown because of an outbreak the insurance won't pay.
Coronavirus will be active in places around the world until deep in 2021 and maybe longer. (The spanish flu had waves coming back for 3 years).
This means going abroad will stay risky and clusters of countries might, internation travel for the bigger mass might not be possbile until 2022.
Long haul travelling for the masses seems highly unlikely in 2020 but when will countries open up their border and could we see an early wave of long haul travelers ?
Most positive scenario : september
- Schengen (EU) will probably be closed till September, several political leaders including Macron and the EU president van der Leyden hinted towards this, nobody in, means also nobody out.
- Sojern sees some activity in its flight search database from september onwards (23 april 2020)
- Intrepid suspended all its tours until end of september
Underneath the UNWTO scenario published on may 7
For me the worst scenario is the most optimistic scenario.
Update 29 July - EU had a positive impact on in EU travelling, but it fragile. As for now over sea markets are still very low, there appeared an attitude difference in EU markets and Asians, EU markets might recover faster, as they seem to be willing to take more risk. Very interesting will be how the USA will emerge out of this crisis will they go long haul fast ?
Recovery could be between the orange and green line, but the line will go steady up in the beginning and then go slowly up, recovery will take the whole of 2021 and maybe longer.
The uncertainties for a 2nd or 3rd wave will not be gone by September which makes booking a holiday for most people very risky because you don't know if a country or areas goes suddenly in lockdown again.
Research show most people only have confidence in cross border travelling after a vaccination is available, this makes the blue line almost impossible to be true.
Airlines play a big part in recovery especially in destinations in southern Europe or Asia. Airlines themselves have optimistic scenarios that run on 80% capacity for 2021.
The world will be reopened with measures that will protect mostly the rich countries and people against the risks of covid-19, while poorer countries like Greece, Thailand, etc, want to take risks to open fast, while the UK, Germany don't want their citizen to be exposed to such risks.
Trust is essential for a fast recovery and though some governments did good and build trust, on an average level trust levels in the world towards governments and other people are at all time lows. Regaining trust won't go that fast, though people do forget fast with the fast flood of information, however in this case whole societies are traumatised, having gone through 2 big earthquakes i know how long it lasts until that fades (years).
Trust actions of companies like Corendon that offer corona free holidays that will erode trust for the bigger group. You can only go on holiday in a closed environment.
A lot of money will be pumped in domestic tourism campaigns this will suffer inbound tourism dependent tourism countries like Greece, the blue line seems not realistic for them and people will game: in other words if a lot of Russians will go to Turkey, will the Germans follow ?
The recession is a big unknown, countries that were hit hard during the last financial crisis like for example Spain, took years to recover. The blue line seems thus really not possible.
That means that the green line becomes the most optimistic scenario, but also that you need to define an even more pessimistic scenario to add to the table and that could make our current pessimistic secenario the most likely one.
Conditions that need to be met for "full" re-opening of international inbound travel
- The world has a few clusters of coronavirus left - cluster management goes from nation to international level - medical resources become free - international community will jointly work together to erode virus from such clusters. Travel bans for countries might be very flexible and open and close - big uncertainty still exists for bookings
- Coronavirus is world wide under control and almost eroded, vaccination and medicines are widely available - international travel will restore to a normal level though health security measures will stay intact.
- Several countries are implementing vaccination programs
- Return to normal from a country will also depend on the images that came from those countries during the crisis, Terrible images and videos can deeply hurt the image of these destinations as safe to travel to.
- The emotional impact in hard hits countries and areas like Italy, Spain, New York, might leave a partly traumatized society that doesn't want to expose itself to risks. Numbers from such countries might take much longer to recover.
- Most Countries lifted their covid-19 related travel bans
- People feel confident to travel again Research in the USA at April 13 2020 showed most people feel comfortable to get back to normal life only when a vaccine is developed.
- Risk assessments for future waves are low, that new waves are coming is sure as long as the virus is not under control and countries need to get back to some kind of normality because you can't live in lock down and social distancing forever. Where first second waves were thought to be happen only in the 4th quarter now in July we see that the relaxation of measures in the USA and EU already lead to smaller and bigger second waves. Fear or possibilities for second waves makes planning for a holiday that is far away difficult, and full with risks since you can suddenly be part of renewed lockdown rules and get stuck and or have a holiday experience with a reduced quality. We see most people reducing these risk by takings smaller holidays closer to home as long as these risks are real.
When will demand be on pre-covid 19 levels
- Full recovery for long haul markets will take years. Not only demand needs to recover but also flight connectivity. Routes that have been canceled need to return which will take time.
- Emirates is planning in July to fly mid august to 58 cities out of 150 cities pre covid 19 crisis.
- Air France - KLM forecasts that in 2021 they will fly on a 80% capacity.
- Social distancing will lead to bottlenecks at outgoing airports, transit airports, incoming airports and the transportation systems in countries. Such bottlenecks put a cap on the number of coming tourists for maybe years to come. Depending on what kind of measures stay intact after a vaccine is widely available.
- Hilton expected during the presentation of its first quarter 2020 results it might get 2 to 3 years to get back on the level of about 70% occupancy.
During all the stages of going back to (a new) normal travelers will not only be concerned if a destination is virus free, but also about what kind of other people from what kind of countries they might encounter not only in but also en route to a destination.
Potential 2nd or even 3rd waves might lead to stricter health measures and potential new travel bans. Second waves could come when the new flu season kicks (in the Northern Hemisphere from September onwards with a peak in the winter months) or when relaxed measures, leads to new virus clusters that suddenly spread rapidly. As long as there is a risk for 2nd or 3rd waves, booking a holiday far in advance is a risk and will be avoided by most people especially if the vacation is expensive.
Health measures taken by service providers not only give trust but can also scare people, a temperature checks of all guests and denying access to those with a high fever is a risk to go on holiday to such a destination. It's not uncommon, having a fever during your holiday.
The above stages are only security and health stages, they don’t look at the economic situation of the world. Economies world wide are now heading for are or are already in a recession, and this probably gets worse in the upcoming months.
Impact recession after covid-19 on returning to normal demand
The covid-19 crisis is followed by an economical crisis.
Unemployment rates might go up with double digit numbers in several countries, thus for a while people will have less budget for holidays and or might create a buffer to be ready for future crises.
The economical crisis hit young people and lower educated people most.
The lengths of the crisis is still unknown but institutions like the IMF warn the crises will be bigger then the financial crises of 2007/8.
The debt rate of companies is high, because of a low interest rate, if companies are not able to pay back those debts a domino effect could happen.
Another risk is that because of the enormous amounts of money that have been lend to companies & nations, this might lead to non recoverable debts leading to a new credit crunch crisis might start. A credit crunch will lead to a long recession with huge amounts of jobless people. Another possibility is that countries start printing money which might lead to double digit inflation rates.
A deep economic recession takes time to recover Spain's, Italy's and Greece unemployment rates in January 2020 were still higher than before the credit crunch started more than 10 years ago. Though spending per capita in Spain was back on pre crisis level in 2016
Economic recession leads to a change in the way people book holidays, they are more careful, shift to shorter trips and or spend less when on holiday.
In order to restore normal demand, governments, people and companies need to have confidence again in health, security and in the economy.
Travel Experience Changes for the long future
Touch will be redefined in public places. Touch less systems to enter spaces and take actions could be done with gestures and scan based solutions with the help of mobiles and QR codes. Bio metric systems that can recognize faces with masks on to allow for access and or actions will be more common..
Prices of flying will go up; first there will be a big shake out, especially long haul dependent carriers will go through mergers or bankruptcy. The surviving airlines need prices to go up to recover some of the losses. This will make long haul travel less affordable for the general public.
My Scenario for Recovery of the Travel Industry
Underneath scenario could be a scenario for an Asian developing country. Demand recovery from different countries or parts of the world will be different, because countries are in different stages.
Where halfway July the corona crises was still party regional in September 2020 there are more 80 countries in the world that have daily 2 or more covid 19 deaths.
Though borders are opening up in summer 2020, there seems to be very little confidence to travel on especially longer distances.
Where some countries are riding a wave of infections out because lockdown couldn't be afforded like India others successfully brought there outbreaks under control, but it appeared impossible to keep citizens under strict measures and many of those countries are seeing 2nd waves. Something that will go on until a success vaccine program is widely implemented or heard immunity reached. When both of these will happen is still unknown in September 2020 but seems unlikely to happen before the 2nd quarter of 2021. Until then the crowd management policies to control outbreaks and social distancing will stay intact which means events, leisure activities, restaurants and others won't be able to fully open until that time because of the caps on amount of people and obligated social distance.
Scenario 1) - Domestic Traveling for most countries in Asia Starts Up in August
- Demand Domestic - 3 quarters to get back to normal level
- International Travel Starts Up in November
- Demand International travel 6-9 quarters to get back to normal level
- Scenario 2) Domestic Traveling Starts Up in November
- International Travel Starts Up in February
- Scenario 3) Domestic Traveling Starts Up in February
- International Travel Starts Up in May 2021
McInsey - expect domestic to recover with 2 / 3 quarters after travel bans lifted, international after 6 - 9 quarters.
2001 - 9/11 - According to skift article it took 3 years for flights to be on the same level
2003 - SARS - hotel performance in China saw a rebound to reach pre-crisis levels just three months after the travel restrictions were lifted.
2009 - Credit Crunch Crisis - Hotels in the US and Europe took an average of 2.5 to 3.5 years to recover their original occupancy rates before the crisis.
4) Re imagination ?
Could it be that travel with airplanes becomes luxury again ? If social distance becomes a new normal then transport will become much more expansive ? In stead of 3 people on a row this might be only 1 ? That would mean a ticket becomes 3 times more expansive .
Most likely ?
Stages Of Getting back to Normal
Country will open for traveling
- Domestic Traveling
- First around your city
- In your state
- Then your whole country
- Friction might apear
- Communities not wanting outsiders
- Travelers scared to go to certain areas
- Only healthy people can travel
- Proof of health
- Digital or Physical
- Contact with risk people
- Note that in china there is friction about the identification of A symtomic people ./ people who dont have symtoms
- International Travelling
- Myanmar opens up again for international travel from certain countries
- Other countries will ease their travel ban one by one
- They will first ease movement of their people
- Then slowly open public places
- Then events
- Then international
- Myanmar is not expected to go open first for EU countries
- Other nations ?
- Maybe nations will be opened for their own economic blocks / Meaning first ASEAN / BIMSTEC
- Starts Up in Aug
- Business first - August
- Healthy people second - September
- Rest - January
- You will probably get travel advisories lift country per country
- Countries with good monitoring systems might send out people first
- China / HK / Taiwan
- South Korea
People might be scared to receive people
- You can build trust by informing what you do to make sure only healthy travelers get into the country.
- Kind of Travel ?
- Solo / Couple
- Small group second
- Families ?
- Nature & Remote
- Sustainability might become much more important
Since money is issue and black money already a big founder of the real estate in which tourism products are housed, the change of an increase of black money in industries and especially the travel industry is high. Washing black money white, can come at a high price.