The travel and tourism industry is expected to dent global gross domestic product by $5.5 trillion this year due to the coronavirus pandemic, according to a report on Saturday.
A latest study released by Boston Consulting Group (BCG) and Google said the decline in international and commercial passengers around the globe could lead to a loss of up to 190 million jobs in the travel and tourism industry.
The report also highlights that the global travel and tourism business has recorded sustained and successful growth over the past 20 years, with a compound annual growth rate of five per cent amounting to $4.7 trillion in 2019. The report assessed the effects of the pandemic on the global travel and tourism business and its impact on destination marketing organisations (DMOs) and said trends in consumer preference in travel demands have shifted and people opt for local staycation, boosting domestic tourism.
Google searches in the Middle East and North Africa show that ‘cancel flight’ queries increase by 259 per cent in March 2020, compared to January 2020. Moreover, the growth of ‘staycation’-related searches increased by over 400 per cent since March.
In the UAE, searches related to ‘staycation’ have grown by 68 per cent during the summer season. The top countries people searched for on Google in the past three months included India, Pakistan, the Philippines, the US and the UK.
“These shifts in consumer sentiment towards travelling are real, as the fear of catching the virus grows, and accordingly leisure travel is no longer an option or a priority,” said
Abdullah Alassaf, industry manager at Google. “However, the need to travel is inherent. We found in our research that consumers rate leisure travel as the top activity they miss the most and 31 per cent surveyed in the report hope to plan leisure travel once they feel safe enough to do so.”
Atik Munshi, senior partner at Crowe UAE, said the UAE is one of the few countries that has proactively taken Covid 19 challenge head on and that is the result that “we had an earlier than expected return of businesses restart” in the country.
“The country already ticks in all the five boxes of the Five-R approach suggest by BCG for hospitality’s revival. There is no doubt that hospitality and aviation were among the most severely hit sectors by Covid, yet the approach by the Dubai government in ensuring safety measures and bringing sanitisation drives has helped build the sentiment not just locally but internationally,” Munshi told Khaleej Times on Saturday.
“With the new friendship treaties with Israel, the UAE will be able to portray the inclusive and tolerant society much strongly, which in turn will bring in more travellers and tourists. With the end-of-summer lean period, hospitality would likely see additional traffic from end of the next quarter and 2021 is expected to be much better with the Expo 2020 catalyst.”
Iftikhar Hamdani, area general manager at Bahi Ajman Palace and Coral Beach Resort Sharjah, said this summer was much better than last year due to a very successful staycation business in the local market.
“The UAE has a promising outlook for the tourism sector as the government resumed business activities early while most of the other countries were still struggling to contain coronavirus. We are very optimistic about the hospitality business as our repeat customers are eager to travel again and we are anticipating a very good business season ahead,” he said.
Elaborating, he said very positive news is are coming from the CIS market as well as Russian states that are key growth markets. “Our last quarter achieved very good occupancy rate due to higher staycation business and the situation will further improve in October when more countries will ease travel restrictions,” he said.
To a question, he said lockdowns are not a solution to the problem as it had very bad impact on businesses. Citing an example of Pakistan’s smart lockdown policy, he said the economy can’t afford another lockdown as it will be very harmful. “We can see real impact on the economy when restrictions on travel movements will be completely eliminated or eased by other countries,” he said.
The report further indicated that Google searches related to air travel declined 62 per cent from their January levels, as major international expositions, conferences and sporting events across the globe were cancelled or postponed, including Dubai’s Expo 2020, the Tokyo Olympics and the Beijing Motor Show.
“There is no telling for sure when the industry will recover. The Covid-19 situation remains volatile, with many countries experiencing waves of infection amid inconsistent government responses. We are currently tracking five potential scenarios for recovery, with the prolonged U-shape or L-shape being the most likely for travel to return to pre-pandemic levels in our view. By that time, however, any number of airlines could go bankrupt and hotels, resorts and restaurants will close forever,” the report said.
More than 70 per cent of consumers believe it is irresponsible to travel until the virus is under control, and more than 65 per cent believe it is not wo h the risk of taking a vacation until things mostly return to normal.
The report said destination marketing organisations (DMOs) can begin tp plan ahead for the long term in three key activities – product and service development; stakeholder engagement; and marketing. It suggested a ‘Five-R’ approach to guide travel marketers in adapting to the changing industry trends:
. Reassess their offerings and value proposition in light of evolving traveller preferences, needs and concerns;
. Reassure travellers on the safety of travel to their chosen destination by addressing their health concerns;
. Raise awareness of the destination, including added safety measures and local government regulations, to inspire consumers;
. Remove barriers in converting consumers to travellers by making the case for traveling with conscientious health and safety measures in place;
. Revive spend in the local economy by supporting tourism.