"This is perhaps the best time for the country to invest in badly-needed travel infrastructure with emphasis on sustainability and environmental protection, for the time when tourism rises again."
"This is perhaps the best time for the country to invest in badly-needed travel infrastructure with emphasis on sustainability and environmental protection, for the time when tourism rises again."
In the aftermath of the still ravaging pandemic, beyond the lockdown, however modified it shall be, clearly the biggest loser, the main economic victim of COVID-19, is the tourism sector.
And it won’t be easy for the industry to recover. It will take time.
For the current year, there is the uncertainty of when this scourge can be contained.
When will a vaccine that would inoculate whole populations from this novel coronavirus be discovered? And how can our medics and scientists protect us from mutations of the virus as it happens in different parts of the globe?
There will be a primal fear of traveling especially to those destinations that were hardest hit. Unfortunately the hardest hit are also the most frequent travel destinations, not only for Filipinos, but for most of the world: Europe, the US of A, China, Japan, South Korea.
As of this writing, more than 2.4 million cases have been detected, 30 percent of these in the United States, 40 percent in Europe and in its most popular destinations at that. And then there is China, from whence the virus originated. The virulence may have been contained in neighboring Japan and South Korea faster than in other parts of the globe, but the fear is likely to persist, hopefully to get better in 2021, when the Olympics unfold in Tokyo.
With demand down, the airlines will find it difficult to recover. One of the biggest come-ons that propelled the tourism boom in the last three decades is the cheaper cost of flights. Budget carriers a-plenty filled their carriers to the max. How will they maintain such low fares if there are less people traveling?
The major airlines, many of them with substantial government ownership, flag carriers they are called, will likewise reduce the number of flights, adjusting to the lower demand. The immutable law of supply and demand takes over, and likewise, fares will go up. That demand gap will not be easily filled by business travelers, nor the few who can afford higher fares.
Hotel occupancies all over the world will take a hit. Even if they lower their rates, with airlines unprofitable and flights reduced, where will the hotels get the warm bodies to stay in their rooms?
The sad part of the “new normal,” as many call the aftermath, is that so many trillions of dollars have been invested in the expansion of the travel industry because of the boom of the last three decades. And most of these trillions were financed by banks and financial houses who kept seeing a never-flattening curve that pointed northward year after year. Even with blips owing to the 1997-98 Asian recession, or the 2008 financial crisis, the world travel industry remained healthy. What happens now that the boom has bust?
Down the line, we have the restaurants, especially the pricey Michelin-starred fine dining restaurants where financiers invested in sky-is-the-limit accoutrements and hired chefs at astronomical salaries, now facing bankruptcy. And the thousand-dollar per night resorts, what will happen to these?
With higher plane fares and fewer flights, cheaper bookings including Air BnB, and their on-line purveyors, Agoda, Expedia, etc., will have to rack their brains on how to revive the moribund travel industry. Pity the mom-and-pop pensions and family inns as well. And of course the travel agencies and tour operators, who to begin with were already affected by the online reservation systems even before the viral contagion.
The fastfood joints will survive the crisis, as domestic food demand, even dining-out will remain inelastic, or if affected, slightly. But their premium will be price-driven, which means lower bottom lines. Consumers will be more value-for-money spenders.
There may be a temporary spike in home-delivered meals, which is good for the consumer logistics sector, until people get tired of the “new normal” and find it safe enough to go to crowded places.
It will also take time for cinemas and theaters, concerts and plays, to come around. The big winners are Netflix and HBO and all the other producers of home-based entertainment. (Oh, how we will miss Broadway and the West End, or even the Cultural Center!)
Unfortunately the travel industry is also a big, big employer. A big chunk of our OFWs’ work in the travel-related sector, from chefs to chambermaids to drivers to waiters. What jobs can we provide when they get back home?
Of course, the ocean cruise industry, where space confinement led to high infection, will be in extremis. The cruise vessels, too employ thousands of our OFWs.
The travel sector is now looking for survival formulae, including promoting domestic travel. But the lingering fear, at least for the next year and a half, will choose the “safer” destinations, such as islands yet unfrequented, but where hardly any infrastructure has been built.
On the longer term, this is perhaps the best time for the country to invest in badly-needed travel infrastructure with emphasis on sustainability and environmental protection, for the time when tourism rises again.
But as it is, funds earmarked for tourism infrastructure have now been diverted to the “war” against COVID-19. Saving lives now matters more than future prospects.
Having been part of the tourism sector in the past, I find it quite painful to write this article. I am sure our publisher, once also a pillar in the travel industry, reads this article with pain. I find proposing solutions difficult at this time.
