Recent surveys from sources like the Global Business Travel Association and a new BVK survey focusing on US traveler’s recovery preferences show that travel’s “new normal” won’t look like anything we’ve seen before.
American travelers for both business and leisure say they won’t be flying internationally any time soon. National travel will take first priority as the BVK survey shows. Most travelers will not want to go further afield than US destinations for some time.
For those who wish to know what “the new normal” will look like in international travel, one aspect is sure: it will likely be a lot more expensive.
Although fares are down at present because flights are empty, airlines are already looking at cabin designs that give customers more room in flight and most realize that flyers will not want to sit in the middle seat for some time to come, if ever. The days of packed flights at discount prices may be over. Even the CEO of Ryan Air, Michael O’Leary, recently stated that if he can’t put flyers in middle seats he will close shop.
Governments are considering the reality of requiring health certificates to travel and are already conducting temperature checks. If travelers are required to get an all clear at the airport and are unlucky enough to catch a normal flu or cold, they may have to rely on travel insurance to refund some or all of their expenses on a cancelled trip. Higher prices on travel insurance are likely to result if consumers feel the onus to purchase plans to cover all their international travel.
Hotels, too, are likely to be part of the upswing in prices as recovery moves forward into 2021.
New hygiene rules and social distancing may mean the end of the large scale events that hotels rely on for bookings: conferences, weddings and other social events. The consumer will most likely foot the bill.
The vaunted “democracy of travel” that we have taken for granted for many years will be challenged or may disappear entirely.
Even something as simple as a shared Uber ride may be no more. In NYC, currently, such rides are not permitted but it is hard to think of many people returning from the airport who would want to share their ride with a stranger.
Given such scenarios, how can travelers plan so they won’t be price locked out of their future dream journeys?Think of any international trip as a premium journey, as a trip to Bhutan currently is, with restrictions you must pay for. Realize that you may have to pay for documentation over and above what you normally pay for to prove your state of health or immunization. Last minute jaunts to far flung destinations may be a thing of the past for now, depending on your budget and resources.
Know and use your miles wisely. Airlines are reaching out to their elite status holders and ensuring that they know their miles will not expire prematurely. Check your status and keep on top of it, especially with code-sharing airlines.
Book with a travel agent. Now is not the time to try to figure out potentially needed refunds on your own. A good travel agent will get you the most flexible arrangements available and you may need them.
Consider using a travel specialist physician prior to leaving on any trip of over a week to an international destination. Physicians who specialize in “travel medicine” are up-to-date on immunization requirements and levels of infection around the world. A consultation with one of these physicians before your trip can help you be aware of risks of infections, help you plan for the safest trip possible and advise on what insurance is optimum given the time of year, infection rates, etc.
Consider a “travel bond.” Some companies are floating the idea of travel bonds which will allow you to pay now for travel later. The longer you hold the bond, the more value it accrues. These bonds help hotels stay in business during quarantines and help consumers plan for more value-added trips in the future.
Postpone the multi-generational trip until after a vaccine is available. The risk of traveling with over 60 individuals at higher risk along with children and parents is too high. Pare group trips down to the lowest number of individuals possible and opt for the most flexible travel plans on the market.
Pay for flexibility from now until there is a vaccine. Do not purchase any products, seat, tour or hotel room that you cannot get at least a partial refund on in case of pandemic shut-downs. Experts see a phased recovery that may move in and out of partial or total shelter-in-place orders.
Choose to travel to destinations where you have contacts or family with whom you can stay in case of a shut down. The recent experiences of thousands of influencers who ended up with overextended vacations at the whim of their hosts should be instructive. If you have family or friends in a given destination you may be able to stay with them instead of a hotel until you can find a way home.
April 27, 2020
In an SEC filing made last week, Colombian air carrier Avianca (NYSE: AVH, BVC: PFAVH) revealed that their auditors, KPMG, will inform the airline’s audit committee that “substantial doubt exists as to our ability to continue as a going concern.”
The full statement on page 3 of the SEC form 6-K reads as follows:
“Our independent auditors, KPMG S.A.S. (“KPMG”), have informed our Audit Committee that, in the absence of further information in support of our ability to meet our obligations as they become due and to comply with our debt covenants, KPMG’s auditors’ report on our consolidated financial statements as of and for the period ended December 31, 2019, will include an explanatory paragraph indicating that substantial doubt exists as to our ability to continue as a going concern.”
Avianca has faced worsening financial and operational difficulties over the past 3 years, and the Coronavirus COVID-19 Pandemic may have pushed the airline over an existential cliff. Even before governments ordered closures of airspace, Avianca had scarce cash on hand to cover current liabilities, and had just completed a debt restructuring and closed on additional financing. Now the airline has more debt, less revenues, and has fallen behind on payments of leases and financing.
At an 81% load capacity in previous conditions, the airline announced that it was retooling its aircraft to add even more seats, but passenger demand is unlikely to recover in the coming months once travel is permitted again.
Avianca’s North American patron, United Airlines (NASDAQ: UAL) is not optimistic either. In their own SEC form 8-K filing, they stated “Our significant investments in AVH and its affiliates, and the commercial relationships that we have with Avianca may not produce the returns or results we expect.”
United Airlines admitted in the filing that their stake in Avianca may turn out to be worthless, stating:
“As a consequence, we may not realize a satisfactory (or any) return on our invested or loaned funds with respect to AVH and its affiliates.”
United went on to discuss the operational impact an Avianca collapse could have, since it relies on connections with Avianca and Copa Airlines to complete its route network in Central & South America.
“Further, these investments may not generate the revenue or operational synergies we expect, and they may distract management focus from our operations or other strategic options. Finally, our reliance on Avianca in the region in which it operates may negatively impact our global operations and results if AVH does not successfully recover from its debt restructuring or the COVID-19 pandemic, or is otherwise impacted by general business risks or performs below our expectations or needs. Any one or more of these events could have a material adverse effect on our operating results or financial condition.”
For travel companies looking at how and when they might emerge from the Covid-19 crisis, scenario planning is a big part of the equation.
Many now believe domestic travel will rebound first followed by intra-regional travel, as countries reopen borders and consumer confidence grows.
Companies from all segments of the industry are cutting costs and adapting business models now, to put them in the best position for whatever comes on the other side.
Prior to the crisis, Smart Travel Lab highlighted sustainability, over-tourism, "seamless" journeys, the future of workforce and security as the five main themes to impact the industry in the next five years.
It now believes that health and sustainability will top the agenda for the next 18 months.
Christiaan Uittenbosch, co-founder of Smart Travel Lab, says: "All companies should be on top of these two topics, not only to be in business and stay relevant, but travelers will be looking at them for a strong and positive answer."
The organization, which is focused on sustainability in travel, has got together with Kantar, to put together four scenarios to depict what a post- Covid-19 travel industry might look like.
• Close Call: "the Surge for Survival" describes how companies taking drastic measures to survive will also need to be prepared for the pent-up demand as consumers are released from lockdowns. The report says there will be a "short window of opportunity to recover from losses" but stresses companies need to have the resources to compete.
• Panic Attack: "Stay local, stay safe" predicts that consumer behavior, naturally more risk averse during the crisis will have changed habits for the longer term. This means travel companies will need to earn trust again.
•Recurring Nightmare: "Two seasons, two travelers" describes a scenario where the virus comes back for portions of the year. This leads to consumers able to travel for a part of the year and in lockdown for the remainder. In this scenario, more well-off segments of the population able to spend the year away from it all while others are unable to afford to travel. The report says brands would need to choose who they target in this model.
• Brave New Reality: "Travel Safety by fiat" envisages a world where Covid‐19 is a permanent feature but governments step in to manage it with regulation. The scenario would see borders close as and when infection emerges and would mean companies could operate in "a relatively stable and prosperous business environment" but be prepared for restrictions being put in place.
The full report can be downloaded here.
The challenge that is now facing almost every Caribbean nation is how best to recover the tourism economy without which future economic growth and sustainable tax revenues will be all but impossible.
The COVID-19 pandemic has shuttered the industry, made hundreds of thousands of workers unemployed, pushed many hotels, airlines and cruise companies into financial meltdown, and caused travellers to fear placing themselves at risk in any situation where public health cannot be guaranteed.
According to Frank Comito, the CEO and Director General of the Caribbean Hotel and Tourism Association (CHTA), 87% of Caribbean hotels have suspended operations and are not accepting guests. His initial estimates indicate that from March to mid-April, the industry lost US$1.3bn in room cancellations and Caribbean governments’ total tax revenue on visitor spend may have fallen by around US$0.5bn.
For the Caribbean, the most tourism-dependent region of the world, the obvious consequence is an urgent need to consider when it can reopen for business, how it positions itself when international travel again becomes possible, and how it should adapt its offering.
Some Caribbean countries, most notably Jamaica, are already well ahead of the curve. It has established a multi-disciplinary task force to determine not just how and when to bring visitors back, but to ask difficult questions about its tourism model.
Jamaica’s Minister of Tourism, Edmund Bartlett, says that the new group will be asked to establish a realistic view of the tourism baseline that Jamaica has to recover from; give consideration
to multiple alterative versions of the island’s tourism future; establish as far as possible a time line; and develop a strategic posture for the journey back, taking account of national imperatives and scenarios. He also believes there is a need for strategies that create a much closer integration with agriculture and data-led thinking about market development.
It is an approach that recognises that tourism and the way it recovers will not be as before and that much more thought needs to be given to forms of sustainability and better-balanced economies.
Nonetheless, the greatest immediate challenge, absent of either a vaccine and/or some form of reliable visitor health certification, is that the virus could asymptomatically be imported into the region from countries that have not done enough, have failed to deliver an efficient response, or are simply in denial.
Without a vaccine, such an eventuality will remain politically and electorally sensitive for several years and have xenophobic implications. It will also impact on the frequency of air and sea lift, foreign relations, public health policy, taxation, food security, insurance provisions, and much else, well before the marketing specialists are able to address consumer perception.
Jim Hepple of Tourism Analytics in Aruba believes that governments will be so concerned about importing the virus that US residents in particular travelling to and from the Caribbean will require government approved health documentation to board flights and pass immigration, and on return to the US may for a period be subject to some sort of quarantine, making questionable the idea of a short or even two-week vacation.
Although regional tourism has a proven ability to recover from crises, and industry optimists are hoping to see visitors return this coming winter season based on the region’s recovery after 9/11 and the 2017/18 global financial crisis, these inflection points provide little guide to where the world economy and by extension where tourism now is. At best, the world and send markets are about to enter a recession or worse, and as polls show would-be travellers have become fearful of leaving their own country: factors that suggest that the time horizon for the start, not the end, of Caribbean recovery may be as late as the fall or winter of 2021.
As Australia and New Zealand have already indicated, it is also quite possible that governments in the region’s major source markets may not immediately encourage external travel, preferring first to incentivise staycations in order to stimulate domestic economic growth and protect public health.
It may also be the case that not every category of visitor the Caribbean has welcomed in the past will wish to or be able to travel. Older travellers may be reluctant and may no longer be able to obtain medical or travel insurance for nations deemed to be at higher risk. Moreover, hotels and other visitor facilities may be cautious about litigation and insurance should the virus reappear in a manner traceable to one of their properties or facilities.
There is also much to be considered in relation to the cruise lines. The first post-pandemic requirement will be to stimulate employment and tax-generating long-stay land-based tourism, then after that to develop a unified regional response to the cruise company’s divisive approach to destinations.
While acknowledging their value, Frank Comito points out the cruise lines need to be better regional players. The Caribbean, he says, “will have to explore whether it has the collective will to address from an equity perspective the role of the cruise sector vis-a-vis land-based tourism in its many forms”.
More generally, the outlook for a rapid global economic recovery and the return of international tourism is not promising.
Marla Dukharan, one of the region’s leading economists, expects a recession and almost every Caribbean economy to contract, causing governments to have to become more important as drivers of economic activity, needing to come together to find common regional economic solutions involving support from the IMF and others. She also believes that “tourism activity and the businesses which depend even partly on tourists, will not see their levels of revenue recover for years to come”.
Addressing all these and other issues will require much thought, joined up local and regional responses, a high degree of realism about how Caribbean tourism markets will reopen, and most likely fierce global competition as all nations see visitors as a means to rapidly power future economic growth.
Just as importantly, the crisis facing the sector offers an opportunity to governments and international financial institutions to think long and hard about how to rebalance Caribbean economies, so that the region in the longer term is much less reliant on the fortunes of a single sector.
A second column addressing the way ahead for the Caribbean tourism economy will appear next week.
(David Jessop is a consultant to the Caribbean Council and can be contacted at firstname.lastname@example.org(link sends e-mail).
We’ve been here before: a pandemic, inequality, economic stagnation and climate change brought down Medieval Europe
APRIL 26, 2020 6:00PM
In predicting the future, we often turn to our past experiences. Humanity has, after all, faced pandemics like this one before — many times, in fact — and few are as memorable and menacing as the Black Death. Arriving in Italy in AD 1347, the Black Death, now believed to be the bubonic plague, rapidly spread throughout Medieval Europe, wiping out between one-third and one-half of the entire European population.
The people of Medieval Europe were not unaccustomed to suffering, but this was unprecedented. Death would come within days or even hours of showing symptoms, and for those who fell ill, the mortality rate was probably upwards of 60%. Panic spread even faster, and the most sacred bonds of society began to unravel. Medieval chroniclers tell us of priests abandoning their flock, parents abandoning their children, husbands their wives, and vice versa — anything to escape the contagion. In some areas, Jewish communities were blamed and viciously attacked, while in others, throngs of penitent Christians publicly whipped themselves in imitation of Christ. For many, it was the end of the world.
What's often missing from this story, however, is the wider context and the lasting impact of the Black Death. This is a story not only of unfathomable tragedy, but also of transformation and rebirth. The plague, in combination with a host of other related and overlapping crises, delivered a death blow to Medieval Europe, ushering in a new age — the Renaissance and the rise of so-called agrarian capitalism — and ultimately setting the stage for the Industrial Revolution and the modern world. And the calamitous 14th century is not as far removed from our own experience as we would like to think.
Europe at the end of the 13th century was not so different from Europe today. Since the Second World War, we have experienced an unprecedented period of economic growth, and so it was for Medieval Europe on the eve of the Black Death. From AD 1000, Europe's population doubled or even tripled, and the economy became increasingly commercialized, underwritten by an increasingly sophisticated financial system, as new cities and towns emerged, universities were founded across the continent, and the magnificent Gothic cathedrals surpassed the Great Pyramid at Giza as the tallest man-made structures in the world.
But like the modern world, there were cracks in the façade — warning signs that the social and economic foundations of Medieval Europe were not as solid as they appeared. As the population grew, increasingly marginal land was turned over to agriculture, with diminishing returns, resulting in lower yields per capita and pushing the population dangerously close to subsistence levels. This left little slack in the economy to absorb a significant shock, and the 14th century would soon bring one shock after another.
First and foremost, the climate was changing. Sound familiar? Medieval Europe benefitted from several centuries of warmer weather, which boosted crop yields, but by the 14th century, the world was entering the so-called Little Ice Age. The changes were relatively minor when compared with our own climate crisis, but the impact was significant. Cooler and wetter weather depressed agricultural yields, at a time when there was already very little slack in the food supply. This contributed to a broader economic slowdown, as yields declined and prices rose, but it also brought Europe to the edge of famine.
Then, beginning in 1311, Europe began to experience a series of crop failures across the continent in what became known as the Great Famine. Reaching a peak in northern Europe in 1315-1317, the Great Famine may have killed 5 to 10% of Europe's population, less than a generation before the Black Death arrived in 1347.
At the same time, Europe entered a prolonged period of heightened geopolitical conflict, during which a dizzying array of kingdoms, principalities, sultanates and city-states waged innumerable wars, both large and small. Chief among these, in terms of social and economic impact, were the ongoing hostilities between England and France, culminating in the Hundred Years' War (1337-1453), and the fall of Acre in 1291, the last remaining crusader city in the Levant, which prompted a papal ban on trade with the Mamluk Sultanate. These conflicts inhibited trade between northern and southern Europe and between western Europe and the eastern Mediterranean, further slowing the European economy and incurring a massive fiscal burden that would soon ruin the European financial system and provoke uprisings in both France and England.
Northern Italy was the heart of the financial system at this time, and a small number of very large Italian banks, often referred to as "super-companies," were lending huge sums of money across Europe. As was the case in the 2008 financial crisis, few banks actually had the cash recorded in their ledgers. All available money was loaned out or tied up in investments, leaving the banks severely under-capitalized and vulnerable to insolvency in the event of a sudden large withdraw or a major default on their loans.
Both of these eventualities soon came to pass, triggering cascading failures across the financial system. First, war broke out between England and France in 1294, prompting King Edward I to withdraw huge sums of money from the Riccardi of Lucca, approximately equivalent to several billion dollars today. The Riccardi simply did not have the money, and Edward seized whatever assets he could. Then, over the following decades, three more super banks, the Frescobaldi, the Bardi and the Peruzzi, all of Florence, were each ruined by successive English kings who refused to pay their debts. Most spectacularly, Edward III defaulted on billions of dollars-worth of loans from the Bardi and Peruzzi, triggering a run on Florentine banks in the 1340s, setting off an international debt crisis and effectively ending public borrowing for the English crown. This was now less than a decade before the onset of the Black Death.
Meanwhile, the Catholic Church, the cultural and epistemological bedrock of Medieval Europe, was facing the most significant legitimacy crisis in centuries. The ambitious King Philip IV of France, who also played a central role in the credit crisis of 1294, was embroiled in a high-stakes tit-for-tat with Pope Boniface VIII when the King's men attempted to arrest the elderly Pope, inadvertently killing him. Shortly thereafter, in 1305, a Frenchman, Clement V, was chosen to be the next pope, and the papacy was relocated to Avignon, France. This understandably cast a long shadow over the Holy See, and the Avignon Popes were widely disliked and distrusted. The crisis only deepened in 1378 when a second pope was elected in Rome and a third pope was briefly elected in 1409 before all three were deposed in 1417.
We might compare this crisis of faith with the current legitimacy crisis of science in the United States. Like the scientific method, the Church was a shared way of knowing — a pathway to common understanding, which was essential to the social order of Medieval Europe.
It was in the midst of this spiritual, economic and geopolitical crisis that the Black Death arrived, sweeping through Europe in 1347-1353 and upending the balance of power, almost overnight. The psychological effects are difficult to identify with any certainty, precisely because so many other calamities were already tearing at the medieval subconscious, but the economic effects of the plague were nothing short of earthshattering. By killing perhaps 50% of the labor force, the Black Death drastically altered the supply of labor, land and coin. Wages skyrocketed, as labor was in short supply, and rents declined, as the plummeting population density created a surplus of land. Both of these developments substantially benefitted commoners, at the expense of the elite, particularly in England.
To understand why, it's important to understand the structure of the medieval economy. Past societies are never as simple or homogenous as we make them out to be. But by and large, Medieval Europe operated on a feudal or manorial system, in which most of the rural population was essentially servile, owing rent and/or services to aristocratic landowners in exchange for the use of their land. Peasants could have myriad different statuses, but in general, the archetypal serf was legally bound to their lord — although they could buy their freedom (or run away). Serfs worked the lord's fields (called the demesne), and in exchange, the serf was given a home and their own plot of agricultural land, from which they could eke out a living.
The archetypal serf was not paid for their work in the lord's fields — that was their obligation to the lord in exchange for the use of the lord's land. The modern equivalent would be if your landlord was also your boss, and in order to live in your apartment, you had to sign away your freedom and that of your children, in perpetuity. Not only that, the medieval lord was also the primary unit of legal, civic and military power, often serving as the first stop for legal matters and the first defense against brigands and rival kingdoms.
In the wake of the Black Death, however, the shortage of labor and the abundance of land empowered peasants to negotiate better terms with their lord, and the lord, with no one to work his fields, was in no place to refuse. This was especially the case in England, where the aristocracy was more dependent on the cultivation of the demesne. With perhaps half the population gone, there were simply not enough peasants to work the land, and the average income of the English lord declined significantly. In response, the lord's wheat fields were increasingly turned over to livestock, or rented out to tenant farmers, who would pay the lord a fixed rent, keeping the agricultural produce for themselves.
The ambitious commoner could now acquire sizable tracts of land, and with the agricultural product of that land entirely at their disposal, commoners were incentivized to maximize the productivity of their land and sell the surplus at market for a profit. This transition is often referred to as the birth of Agrarian Capitalism.
Urban laborers and craftsmen also benefitted from rising wages. The average lifespan increased, and standards of living improved across the board. The shortage of skilled tradesmen even created new opportunities for urban women: the widows of merchants and craftsmen were encouraged to run their husbands' businesses, and the number of female apprentices in London increased significantly at this time.
The aristocracy, however, were predictably appalled by the newfound power of the common rabble, and the elite sought to maintain their position by imposing artificially low wages and by compelling laborers to accept any available work. Sumptuary laws, which restricted what commoners could wear and eat, also became common during the 14th and 15th Centuries. However, these laws do not appear to have been effective, and tensions continued to mount between the aristocracy and the wider populace, who were increasingly impatient for change.
This, combined with the soaring fiscal burden of near-constant war, set off a series of uprisings, most notably the French Jacquerie of 1358 and the English Peasants' Revolt of 1381. The aristocracy responded with force wherever they could, but they could not turn back the clock.
Even in war, their role was changing. While the medieval lord was renting out his fields, the knight was increasingly losing his place on the battlefield. This was, in theory, the primary purpose of the secular aristocracy: to be professional killers, to defend the realm and to protect the clergy and the peasantry. But starting in the 14th century, infantry units comprised of commoners, like the Swiss pikemen and English longbowmen, began to win a series of decisive victories against mounted knights, revolutionizing military tactics and hastening the obsolescence of the feudal aristocracy.
All the while, a new intellectual spirit was taking root across western Europe. Influential thinkers like John Wycliffe and Marsilius of Padua began to question the worldly authority of both the Church and the state, arguing that power rested ultimately with the populace rather than the ruler, and the unworthy ruler could lose their right to govern. Writers and philosophers were increasingly concerned with the here and now, the individual and the observable, rather than the abstract and the universal. The works of Chaucer, Petrarch and Christine de Pizan celebrate the uniqueness of the individual, savoring the moment and often drawing attention to the messiness of the human experience. William of Ockham directly challenged the tedious abstraction of medieval philosophy, famously advocating for more efficient and rigorous reasoning à la Ockham's Razor.
A new confidence in scientific thought began to blossom, as precocious scholars like Nicole Oresme and Jean Buridan postulated the rotation of the earth and the law of inertia, more than a century before Copernicus and Isaac Newton. In the wake of the Black Death, plague doctors were among the first to believe they had surpassed the knowledge of the Greek and Roman world; ironically, they were wrong, but the lower mortality of later outbreaks led many doctors to proclaim they had cured the disease, which instilled a new faith in scientific progress. This was the beginning of a paradigm shift, the repercussions of which have shaped our modern world, and the calamitous 14th century was the crucible through which this new paradigm came into being.
Now, seven-hundred years later, what, if anything, can we learn from this — what can the crises and consequences of the 14th century tell us about our own pandemic and the impending aftermath? On the one hand, the current pandemic pales in comparison to the Black Death. The Black Death killed at least 30% of Medieval Europe, whereas the new coronavirus is unlikely to kill more than 0.03% of the US population. There will be no labor shortage in the wake of the coronavirus; quite the opposite, there will likely be a labor surplus, due to the ensuing economic contraction. As for rents, the housing market is essentially frozen as people shelter in place, and housing prices are likely to decline in a recession, but the real cost of housing relative to income is unlikely to see the kind of seismic shift experienced after the Black Death.
However, if we take a wider view, there is more to the late medieval crisis than a shortage of labor and a surplus of land. The devastation of the Black Death may have been the straw that broke the camel's back, but Medieval Europe was already on course for social and economic upheaval. As is the case today, great-power conflict was brewing, and with large parts of France already under English control, the eventual showdown between England and France was probably inevitable. Inequality was also a source of stagnation and tension well before the Black Death, as the European economy was becoming increasingly commercialized, a new urban middle class was emerging, and the role of the aristocracy in war, in economic production, and in civic life was shifting. But most significantly, and most presciently for our own time, Europe was headed for a climate catastrophe, and regardless of the Black Death, the continent would have almost certainly faced a series of demographic shocks, like the Great Plague, until considerable changes were made to the existing socio-economic system.
The lesson we should take from this today is not the differences between the coronavirus and the Black Death, but rather the broader similarities between the 14th century and the 21st century. As we emerge from our makeshift bunkers — thankful and perhaps overly confident from averting a worst-case scenario — war between China and the US still looms ever larger, socio-economic inequality is reaching record levels, trust in institutions and our established epistemology is waning, and as we enter the worst depression since the 1930s, climate change once again threatens to throw us back into the Middle Ages. The coronavirus has exposed deep fissures in our society, but it has not been severe enough to force us to address these problems. We may feel as though we dodged a bullet, but if we continue business as usual, what happens next is likely to be much worse. The calamitous 21st century is just getting started, and a more apt parallel for the Black Death is probably yet to come.
With all the uncertainty surrounding the coronavirus pandemic, many Americans are reconsidering upcoming travel plans.
ValuePenguin, a company which specializes in assessing the value of financial products, recently conducted an online survey of more than 1,200 Americans and found that 48% of Americans have canceled summer travel plans due to coronavirus concerns. Alongside reconsidering upcoming travel, Americans also appear to be changing their views on travel in general, with 43% reporting feeling more negative about the industry as a whole and 52% admitting to being more fearful of future overseas travel.
Nearly half (48%) of Americans canceled summer travel plans because of COVID-19. Additionally, about 1 in 6 (16%) expect to wait more than a year before traveling again.
46% of those who had upcoming travel plans lost money on nonrefundable deposits and cancellation fees, averaging $854.30 per person. Most of the lost costs came from airline tickets (59%) and hotel rooms (44%).
The coronavirus pandemic is changing consumers’ views about travel.
Forty-three percent feel more negatively about the industry as a whole, and many will change their behavior as a result. For example, 55% said they’re less likely to take a cruise once the pandemic is over, and 52% are more fearful of overseas travel.
1 in 4 Americans are planning a celebratory trip once the threat of the coronavirus disappears, especially millennials, Gen Xers, parents of children under 18 and six-figure earners.
40% of consumers said they’re more likely to purchase travel insurance for future trips due to the coronavirus. However, 18% said the health crisis made them less likely to consider insuring their future trips.
More than a third (35%) of Americans don’t expect to use all of their paid time off (PTO) this year and many said their employer changed PTO policies as a result of the virus. Those policies range from the good (13% are allowing unused PTO to roll over into next year) and the bad (20% are reducing the number of vacation hours for employees).
Consumers are canceling summer trips, and many lost money on nonrefundable travel costs
Many consumers who canceled summer trips lost more than their chance for fun in the sun. Forty-six percent lost money on nonrefundable travel — mainly on airline tickets (59%) and hotel rooms (44%). Those who booked with Airbnb had better luck, as only 22% lost money on an Airbnb reservation.
Other losses included tours or activities (25% of consumers), cruise deposits (21%) and other travel related expenses (11%). Unfortunately, those who canceled travel plans lost a staggering average of $854.30.
Coronavirus is changing Americans’ travel behaviors
While many Americans are feeling uneasy about traveling right now, it turns out they may be less eager to travel even after this crisis passes. Many consumers said the pandemic has changed their views on the travel industry, with 43% feeling more negative, and only 15% feeling more positive toward the industry.
Brett Holzhauer, credit card expert at ValuePenguin, believes this change in feelings represents a bigger shift in consumers' view of the travel industry. “We’ve all been in the position where airlines haven’t been the best to work with, whether that be their customer service or their policies about cancellations. And now with this large pandemic going on, people are revolting, saying we aren’t going to tolerate these ridiculous policies that some of the airlines have,” he said.
Cruise lines in particular may feel a strain from this shift: Fifty-five percent of those surveyed said they’re less likely to take a cruise once the pandemic is over. Baby boomers were the most likely to stop cruising because of the pandemic (65%). International travel also seems to be taking a hit from the pandemic, with 52% of consumers saying that they’re less likely to travel internationally once the pandemic is over. Once again, baby boomers were most likely (61%) to feel this way.
Financial strain likely plays a role in why so many Americans may want to avoid traveling internationally post-pandemic. Twenty percent of consumers said they’re reallocating their vacation fund toward other expenses, although 27% are still contributing as usual. Consumers are also considering more precautions with their money, as 40% said they’re more likely to purchase travel insurance in the future due to the coronavirus pandemic.
Consumers shifting away from travel credit cards
Even those who want to travel will likely need to wait a while, which makes collecting travel points less appealing for the time being. Of those with a travel credit card, 43% have altered their behavior with that card due to the coronavirus, with 32% using their travel credit card less often and 11% switching to another card completely.
Holzhauer feels that stepping away from travel credit cards is a good move right now if you have other options, “I think it is very strategic and smart for people to adapt with the times when it comes to making purchases and earning cash back or travel rewards,” he said. Holzhauer noted that now is likely not the best time to be hoarding travel points as the future of the travel industry is uncertain.
Some are looking forward to traveling again
Not all consumers are afraid of travel (although 16% plan to wait more than a year before traveling again). A quarter of those surveyed are planning a “celebratory trip” once the pandemic is over. Millennials (34%) and Gen Xers (32%) especially are looking forward to getting out of town. And 41% of those who earn $100,000 or more said they are planning a post-pandemic trip. A similar percentage of parents with children under the age of 18 (42%) also plan to take a much-needed vacation once life returns to a more normal routine.
Paid time off (PTO) will likely play a big role in how much people can travel once we bounce back from this pandemic. Twenty percent of those with PTO through their employer said that their employer reduced their PTO due to the coronavirus. On the bright side, 13% reported that their employer is allowing them to roll over unused PTO, which will likely come in handy as 35% don’t expect to use all of their PTO this year.
What does this mean for me?
Your travel plans, career and lifestyle may have been affected by recent coronavirus-related events. If so, keep these few helpful tips in mind:
If you’ve canceled or need to cancel travel.
If you have to cancel a trip due to travel restrictions or health concerns, or would like to cancel an upcoming trip, you may be worried about being refunded for nonrefundable bookings. Some airlines and hotels are making exceptions for cancellations right now. Holzhauer recommends working with individual vendors first to get refunds. If they refuse to budge, he then suggests looking into your credit card's travel insurance policy.
According to Holzhauer, the best way to go about working with your credit card company is to, “First off, of course be pleasant to the customer service representative, everyone is under a very stressful time right now, you’ll never get anywhere with a frown rather than a smile." He advises patience. "Things aren’t going to get done in a timely manner … Give it some time, save all of your documentation, don’t expect anything to happen right away.” Holzhauer emphasizes holding on to any documentation that supports your claim, even if you have to wait until things calm down to present your case.
Worst case, you could try selling airline tickets you can’t use!
If you’re looking to book travel.
Whether you have wanderlust or business requires you to hit the road, booking travel can be nerve-wracking right now. If travel can wait, Holzhauer recommends booking as far out as possible for the time being. “Even the federal government doesn’t really know when things are going to open back up,” he warned. He also suggests booking any travel with a travel credit card that offers insurance. If your credit card does not offer travel insurance, then he recommends buying some from a third-party travel insurance company.
If you have leftover PTO.
While a sandy beach probably sounds good right now, a staycation may have to do the trick. Don’t let PTO go to waste, even if you have no official vacation plans. Working from home can be particularly challenging and stressful, so a few days of a major movie marathon may be in order!
One of the best things you can do is remind yourself that this difficult time will pass. Be patient while you wait for travel refunds and for your work life to settle into a new routine.
ValuePenguin commissioned Qualtrics to conduct an online survey of 1,201 Americans, with the sample base proportioned to represent the overall population. The survey was fielded April 3-6, 2020.
Generations are defined as the following ages in 2020:
Seychelles President Danny Faure addressed the people of the Republic of Seychelles tonight on the easing of restrictions related to the COVID-19 situation.
Travel and tourism is the biggest money earner and industry in the Indian Ocean paradise. Opening tourism is not without great risk. It is also necessary to prevent an economic collapse of the country. President Danny Faure knows this and thinks he has a plan. Can this be done safely for Seychelles and visitors?
Transcript of President Danny Faure’s address to the People of Seychelles
Seychellois brothers and sisters,
Today, more than 3 million people around the world have been infected with the coronavirus. The number of people that have died with COVID-19 is more than 200, 000. We see the suffering and pain caused by this virus every day on the news. In these difficult moments, Seychelles stands in solidarity with countries and people around the world at war with this virus.
Here in Seychelles, we had 11 people that tested positive. 5 among them are still in the treatment center. 6 have recovered and have been discharged from the treatment center. I am happy to say that 3 among these 6 people have returned home.
Luckily, since the 11th case we recorded on 5 April, we have not registered any new cases of COVID-19.
Measures in place today are to keep our population safe. They are measures that are necessary. Some of them, such as the restrictions on funeral services, has created a lot of pain. I know that throughout this period, it has not been possible to be physically present with our loved ones, our family and our friends. I thank you all for your understanding and your sacrifice.
Faced with the greatest threat to human health today, we rallied together and collectively stayed in the line of defense. We have all played our role to break the chain of transmission of this virus and we did it to keep our community healthy and safe.
Tonight, I would like to thank the Seychellois people for your solidarity, your unity and your discipline. I would like to especially thank all our health workers and volunteers, and everyone working in essential services and critical services. On behalf of the people of Seychelles, thank you so much.
Seychellois brothers and sisters,
If the situation stays under control up until Sunday 3 May, we will start to lift certain restrictions in force the next day.
Given this Public Health Emergency, the lifting of measures must be done gradually, with a great deal of caution. There is no place for error.
Following my discussion with the Public Health Commissioner, Doctor Jude Gedeon, and his team, I would like to announce a gradual easing of restrictions as follows:
From Monday 4 May,
Firstly, all restrictions on the movement of people will be removed.
Secondly, religious services, including funeral services, will be able to resume following guidance from the Department of Health.
Thirdly, all shops will be able to stay open until 8 pm in the evening.
Fourthly, the majority of services and businesses will be able to reopen. Construction companies can resume their work as per guidance issued by the Department of Health.
From 11 May,
All child-minding and day-care services, all post-secondary institutions including A-Levels, Guy Morel Institute and the University of Seychelles, will reopen.
From 18 May,
All primary and secondary schools will reopen.
From 1 June,
Firstly, the airport will reopen for commercial flights in line with guidance issued by the Department of Health.
Secondly, Seychellois will be able to travel abroad as per the guidelines and regulations issued by the Department of Health.
Thirdly, leisure boats and yachts will be able to enter Seychelles territory, respecting any guidance from the Department of Health.
Fourthly, sporting activities can resume, following guidance from the Department of Health.
All other measures will stay in force.
We must remember that the situation is dynamic and that measures can be reviewed or revised at any moment in the interest of protecting public health.
Next month, Air Seychelles will carry out repatriation flights for our Seychellois patients presently in India and Sri Lanka. These flights will also serve any Seychellois currently stuck in these two countries: I urge them to get in touch with our Embassies.
Seychellois brothers and sisters,
We are in a new reality. One that requires a new way of doing things, a new way of living, and a new sense of responsibility.
Even if certain measures have been lifted, we need to stay on our guard and take every precaution against this invisible enemy. If the situation changes, restrictions may need to be re-introduced: we will review the measures with the aim of continuing to safeguard the health of our people.
We must continue to practice physical distancing and maintain good hygiene, in line with guidance from the Department of health.
The Department of Health has started working with organizations to prepare customized plans on how they can function given the new reality we are in.
Let us be conscious that during the month of May, no one is entering the country. We are the only ones moving around. Let us use this opportunity to consolidate the new practices we have learned: practice physical distance, wash your hands, maintain good hygiene. I encourage workplaces and schools to use this time to prepare and equip yourselves for this new reality and help us get ready for what we must accomplish together.
As long as this virus persists in the world, we will have to continue to scale up our public health response.
When we reopen our borders, we will undertake strict medical surveillance to detect any new cases and take the necessary steps
The second aspect of our ongoing COVID-19 response is strengthened contact tracing. We will improve the speed and effectiveness of our contact tracing to break any chains of transmission.
And finally, our ongoing response will be underpinned by testing. We will be maintaining high levels of testing and putting those who test positive in the treatment center.
With these 3 pillars: strict border controls, rigorous contact tracing, and testing, we will continue to minimize risks and keep the situation under control.
Seychellois brothers and sisters,
As we prepare ourselves for the lifting of certain restrictions, we also need to prepare ourselves to live in this new reality and consolidate a new way of doing things.
As long as there is no vaccine or treatment for this virus, we need to stay alert, maintain physical distancing, and continue to follow guidance from the Department of Health.
It will require a lot of work, a lot of sacrifices and a lot of readjustment on a personal and collective level. Things will not be like they were before. But I know that we can do it. And I know that because we are already doing it, together.
I hope that when measures are eased from 4 May, we can better appreciate the simple things: the sheer beauty of our country, the clear water in the sea, bird songs; the opportunity to see and reconnect with each other. As a student at school, better appreciation for the presence of our friends and our teachers. As a worker, a better appreciation for the opportunity to return to work and see our colleagues. The value of life, the value of family, the value of friendship, the value of the neighbourhood, and the value of community.
We have stayed united. Let us stay united people.
When we hear and see what is happening in the world around us, we recognize how we in Seychelles, we are truly a blessed people.
May God continue to bless our Seychelles and protect our people.
Thank you and good evening.
Travelers grounded due to the pandemic are willing to share personal medical history to reduce the risk of a renewed spread of coronavirus as a condition of restarting travel.
A survey by Global Rescue, a travel risk and crisis response provider, found travellers were now willing to take several measures they would have previously found objectionable.
"Many travelers are planning to hit the road again this summer and they are willing to share personal medical history and travel plans to help keep themselves and those around them safe," said Global Rescue CEO Dan Richards.
Based on 1,300 responses collected from its members on April 23-24, including government agencies, corporates, universities, nonprofits and tour operators, the company's survey found:
The survey also asked travelers when they expect to be travelling again. It found:
When asked for the reason for their first trip, domestic trips were favored by a two-to one margin. The survey also found:
And when asked about trips booked during the global travel restrictions, the survey found:
Coronavirus: Hong Kong’s screening system for airport arrivals holds lessons for travel industry in post-pandemic world
The city’s government has turned the airport into its first line of defense in the battle against Covid-19.
The monitoring regime would stay in place at least for now, a health official said on Tuesday. “The test that Hong Kong has adopted, I believe it has to stay for a while,” said Dr Wong Ka-hing, controller of the city’s Centre for Health Protection. “I don’t think we can easily do away with the testing in the near future.”
Hong Kong’s programme is being closely watched as the airline industry’s body prepares to meet health, civil aviation and airport authorities in the coming weeks. The International Air Transport Association recognizes that such comprehensive screening will become the new normal to ensure the virus does not resurface as global air travel resumes once the pandemic is brought under control.
“It is clear the health control conditions of passengers will be a key element to restart our industry,” association chief Alexandre de Juniac said. “What we are advocating for is having similar measures all over the world, to avoid a patchwork of complex measures in different parts of the world.”
Future measures could have wide implications on how people travel. The airline industry sees Covid-19 tests and temperature readings as a preflight check possibility. Sanitising gel, masks and social distancing once on board will also be explored.
Hong Kong offers a rare example of how a government can carry out mass coronavirus screening at a makeshift off-site testing centre. Travellers are sent to AsiaWorld-Expo near the airport directly upon arrival and must wait there for up to 12 hours for their results to be processed. But few airports are lucky to have similar set-ups.
Health officials admit they can handle only one plane of passengers at a time, given the necessary physical distancing among people.
“There is a question of capacity,” said Dr Chuang Shuk-kwan, head of the centre’s communicable disease branch. “We can only handle 400 people a day for better quarantine control. If we ask all passengers [after the pandemic] to do this, they would have to wait for hours for the test result and they may not be able to get the result for the same day, so it is a challenge.”
The current screening volume is a far cry from the 200,000 passengers who normally use the airport each day. The health officials could not say whether testing all arrivals would be part of the strategy opening up air travel, or if the number could be scaled up. Testing has been problematic in Britain and the United States, with both struggling to handle the numbers.
“There are a lot of practical and logistical measures that we have tried to figure out and that need to be discussed and presented during this summit to civil aviation authorities, airport and health authorities to see if they are safe and secure,” de Juniac said.
South Korea has done the same thing.
Seoul Incheon, another major Asian airport, set up a makeshift open-air testing centre outside its passenger terminal to screen up to 2,000 arrivals from Europe a day.
According to the Airports Council International Asia-Pacific, current testing has proved tricky and future measures could increase the travel time through the airport and make transiting for passengers more complex.
“The reasons why on-site testing is challenging are space and facility constraints and insufficient testing kits in many countries,” a spokeswoman for the airports body said.
Heathrow Airport in London, one of the busiest in the world, said it expected air travel volume to drop by 90 per cent. It was working with the government and British industries to develop rapid health screening for passengers before they board.
Monty Brewer, a former chief executive of Air Canada, said on a recent FlightGlobal webcast that a renewed sense of safety for flying would be needed to bring passengers back to air travel.
“How do we make sure that the customer feels comfortable that the person they are travelling with is a safe person to travel with, had the disease and no longer carries it, or if they had a vaccine. If you can solve that one, it could speed up the growth of travel,” Brewer said.
April 20, 2020/in Coronavirus /by Destination Analysts
As American travelers increasingly feel better that the worst of the coronavirus may soon be over, one-in-five say a trip will be one of their first post-shelter-in-place activities.
Between April 17 and 19 Destination Analysts interviewed 1,238 American travelers as to their travel intentions.
Key Findings to Know
American travelers continue to feel better that the worst of COVID-19 may be on the horizon. Now 34.1% think the situation will improve in the U.S. in the next month up, from 29.5% last week. The impact they feel the pandemic will have on their personal finances is at a five-week low (6.6 on a 10-point scale). Additionally, the perceived safety of travel activities has improved this week relative to last week.
Excitement levels towards taking a getaway in the next month remain low but are at a 5-week high (4.5/10.0). Similarly, interest in learning about travel destinations remains low but is also at the highest it’s been since March 15th (5.1/10.0). Boomers’ motivation to travel because of discounts and deals bounced back (up to 35.8% from 25.3% a week ago).
When presented a list of leisure and personal activities and asked to select the first things they were going to do when shelter-in-place restrictions are lifted, 22.5% said taking a trip would be among their top 5. Taking a trip comes behind dining out and hangouts with friends, grooming services and shopping in a retail store, and beats going out on a date or to the gym. Indeed, 70.2% of American travelers say they miss travel this week–with 38.6% strongly agreeing they do.
Regarding timing, American travelers increasingly don’t believe or are unsure that the pandemic will be resolved by the summer travel season (44.5% disagree it will). Americans with travel impacted by coronavirus is up 75.3% from 72.8%. The number reporting trip cancellations increased (70.3% from 66.9%), particularly in May and June. Nevertheless, 51.2% continue to feel they will be traveling by Fall, with reported increases in travel plans for September and October.
Again, there remain continued signs that travel is unlikely to quickly return to what it was pre-pandemic. The numbers of American travelers saying they will choose regional rather than long-haul destinations (50.8%) this year continues to grow and is at the highest recorded levels since this study began. More than half of travelers say they will take a staycation this summer (51.3%), and 45.4% say they will take more road instead of airline trips.
36.5% of American travelers say they agree to some degree with the statement “I’m not traveling until there is a (COVID-19) vaccine”; 43.2% disagree. Younger travelers were actually the most likely to agree they may not travel until there is a vaccine.
77.4% of American travelers say they would approve of mandatory health screenings for flights between destinations inside the continental United States. 76.5% feel positively about the notion of mandatory health screenings at airports and 61.2% say such measures will increase their confidence traveling to a destination.
The present moment is not the time to travel in the U.S., according to the majority of American travelers. Over two-thirds say they do not want other travelers coming to their community right now.
For full report click here
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.