The Little Red Company
5 minutes read
It was Valentine’s Day 2020 and I was on the Airtrain to Brisbane Airport, writing a coronavirus travel alert for a major travel agency’s website, on my way to the World Travel Expo in Melbourne.
Back then, COVID-19 was known as novel coronavirus (or the less catchy 2019-n-CoV) and cancelled flight routes and closed borders only affected China, Iran and South Korea.
The mood at that weekend’s World Travel Expo was buoyant with people still dreaming, planning and booking international travel to Asia, the Americas, Europe and, yes, even cruising. Both anticipation and attendance numbers were positive.
The difference one month can make! On March 19, New Zealand closed its borders to non-citizens and non-residents; the next day Australia closed its borders and banned Australians travelling overseas. This move effectively grounded Australia’s travel, tourism and airline industries with the world soon following suit.
In mere weeks, Qantas stood down 20,000 staff and its domestic network operations shrunk to just five per cent. Virgin Australia stood down 80 per cent of its workforce and cancelled 65,000 flights between March 1 and April 30 due to COVID-19 travel restrictions before collapsing, going into administration on April 21. At the time of writing this, the embattled airline is waiting for a lifeline from two US-based bidders.
Flight Centre, the largest travel agency in the Southern Hemisphere, stood down or made almost 6000 staff redundant and closed 800 retail shopfronts.
Areas such as Alice Springs became boneyards for mothballed aircraft, thanks to its dry climate and low humidity, and sombre images of grounded fleets at airports highlighted the catastrophic impacts on travel and tourism around the world.
Without interstate and international travel for the foreseeable future, what is the future of tourism?
Not surprisingly, the “dreaming, planning, booking” sentiment of February’s World Travel Expo is still alive among our industry cohort and travellers alike as we emerge from lockdown. We will fly again, but travel will look very different in a post-COVID-19 world.
A recent survey of Qantas Frequent Flyer members showed 85 per cent were looking forward to planning their next trip. A poll of travel industry insiders indicated similar results with two out of three respondents keen to hop on a plane anywhere.
Domestic travel will lead demand in the short term, as we saw with Tourism Australia’s Holiday Here This Year campaign launched after the devastating bushfire season. While many state borders remain closed, the recovery roadmap is initially reliant on regional and intrastate travel.
Building on the sentiment of national initiatives such as #holidayathome, #roadtripforgood, #spendwiththem and #emptyesky, Aussies will look to support other Aussies with regional driving holidays as hotels, caravan parks and camping accommodation reopen.
A travel industry poll indicates at least one-third of Australians would prefer to holiday in their home state, while the other two-thirds want an interstate break. Almost 40 per cent expected to travel overseas for a holiday by June 2021.
For the airline industry, we can look to the 2003 SARS epidemic and Global Financial Crisis (GFC) of 2007-2009 for a potential blueprint. During the SARS outbreak, travel to Asia was impacted, however, demand shifted to other regions such as Europe and North America and we saw greater uptake for short-haul flights to New Zealand and the Pacific.
While Australia was quite protected during the GFC, there was a six-month downturn and it took airlines about 12 months until they were back to full capacity. However, demand for domestic travel remained strong and leisure travel rebounded before the corporate sector.
Post-COVID-19, industry authority CAPA’s new Airline Capacity Model indicates domestic airline capacity to reach 49 per cent of 2019 levels by the October school holidays and 60 per cent by mid-December this year.
Past learnings predict the Asian and Pacific regions will be the first areas to recover. The potential trans-Tasman ‘bubble’ with New Zealand could see some Pacific Island linkages by December 2020. Long-haul international travel may not be likely until after 2021 and is highly contingent on border openings and the easing of restrictions as well as the availability of operational aircraft. This slower, staggered approach means global air travel is not expected to return to normal levels until 2023.
In this “new normal”, airlines will need to navigate supply and demand for airline capacity leading up to October, offering low-cost fares to entice passengers back on planes while adhering to enhanced pre-boarding and onboard health and safety precautions. Some of the measures currently floated by airlines include more temperature screening at airports, increased social distancing on planes and at airports and face masks supplied for flights.
While air travel remains up in the air, Aussies will continue to dream about travel but be savvy about the long-lasting implications of acting locally and thinking globally.
Tourism Australia and many state tourism bodies are reviving earlier 2020 campaigns to inspire Aussies who would normally holiday overseas to explore their own backyards and tick off wish-list destinations such as the Kimberley, Uluru and Great Barrier Reef.
So, for now, domestic travel will be the way to go in 2020. And we’re good with that.