Initial observations of the impact of Covid-19 on the travel industry

Initial observations of the impact of Covid-19 on the travel industry

by Francesca Pezzoli Posted on Mar 26, 2020

As I begin to write this blog from my home, I can’t help but notice the delivery man dropping the parcels by the front door, without attempting to ring the bell. I don’t blame him. In times of Covid-19, this is the new normal.

Yet, while, during these unprecedented times, retailers are seeing their demand through online channels skyrocketing and toilet paper manufacturers are living the dream, the travel industry is being battered like never before.

Even in the midst of their darkest hour, global travel brands, from airlines to hospitality, are working incessantly to help their customers navigate through their cancellations and changes in plans. Over 67% of these touch points begin and end online, with no additional intervention required from customers service operators, who are also experiencing extraordinary volume of calls. It’s pivotal for these brands to provide customers with a robust, bug-free platform with a smooth journey and fine experience throughout.

Have they delivered this consistently since the beginning of the Covid-19 crisis?

No, they haven’t.

A significant amount of global airlines took too long to address Covid-19 by offering passengers more flexible cancellation policies and clear directions. Yet, I believe it was hardly their fault. Less than two months ago none of us could have seen a pandemic, with all its economic implications, coming our way and having such a huge impact on so many people in such a short time.

While virtually catching-up with my Travel Analyst Team earlier today, they all agreed that while the initial spread of the virus has caused some concerns and a moderate amount of cancellations, it’s only from the weekend of 21 February, when Italy announced an initial spike in Covid-19 cases, that the travel industry as a whole felt the first important shockwave from the epidemic. The virus breached through Europe and huge waves of cancellations throughout the entire travel sector began, with no end in sight.

While the airline industry immediately experienced significant volumes of cancellations, following this date, hospitality brands globally saw a reduced amount of them (+7%/day). This was true until 12 March, when President Trump suspended all US flights from/to Europe, leading to a more decisive bulk of cancellations across most of the travel industry.

Our team has also observed business travel agencies going through a steadier wave of cancellations, following the initial spike in Covid-19 cases in Italy, 16% per day. Trump’s ban on 12 March didn’t impact business travel as much as other sub-sectors.

Yet, even during these difficult times, dedicated business teams are planning their brand’s comeback, putting their digital channels at the heart of their resurgence, which no doubt will come and we are all so looking forward to.

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