I wonder how many agents and wholesalers have recently wanted to throw in the towel?
Plenty I imagine. Few, of course, are likely to have genuinely contemplated shutting up shop. But I can’t recall a period where the industry has encountered such a continuous morale-sapping battering. One agent told me how it’s becoming “just all too hard”.
Internally, we’ve had the collapse of Tempo, Bentours and Excite. Externally, the heartbreaking bushfires clobbered the inbound and domestic market, while on-going geopolitical issues continue to create anxiety. Now we have the global spread of coronavirus, now known as COVID-19. You start to wonder, in a mildly paranoiac way, what’s next?
Furthermore, and arguably a more fundamental issue, is climate change and wider environmental issues. Travel, inevitably, is at the sharp end. Overtourism, rightly, has become a major talking point and we are all under pressure to limit our flying.
Travel and tourism, it is fair to say, is enduring some challenging times.
In the main, travel operates on small margins, so few people enter the industry to get rich. But it’s a feel-good industry to work in. The product is highly desirable and exciting, educational even. Flick through the pages of Travel Daily and travelBulletin and you’ll see travel agents and product staff frolicking (apologies, working) in extraordinary destinations that relatively few people will experience. In some ways, we are privileged.
Yet it’s also people’s livelihoods. Business owners have responsibilities, to families and staff. There are mortgages to maintain, mouths to feed. At the corporate end of town shareholders demand results, or demand change, if performances flounder. And right now, travel is a tough place to be.
A Travel Daily survey found 82% of respondents were facing cancellations as a direct result of COVID-19, and not just to China. That is telling, yet hardly surprising. We’ve lived with global terrorism for the best part of two decades, but random attacks create isolated, one-off shocks. The spread of a virus is pervasive and potentially long-lasting. While China, and Asia more widely, is clearly the epicentre, it has crept to all corners of the globe. Corporate Travel Management’s FY20 forecasts perhaps best illustrated the threat of COVID-19, warning it could wipe $40m from its EBITDA.
Is it an over-reaction to postpone travel plans? I’d say so. But it matters little. Regardless of the cause, it’s lost revenue and it doesn’t take much for small enterprises to begin to struggle.
Nevertheless, the industry has been through dark days before, and its capacity to rebound has been demonstrated time and again. Demand may fall during choppy times, and that is clearly challenging for all, but when more settled times return — as they will — bookings will rapidly follow.
Travel, whatever is thrown at it, will never lose its appeal.
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