Lodon,
01
May
2020
|
11:02
Europe/London

LOTUS CORONAVIRUS UPDATE (01.05)

WTTC: Private and public to sector should work on co-ordinated protocols

Travel Weekly reports that the WTTC says that collaboration between business and governments is vital to develop new health protocols to reassure the travelling public.

Gloria Guevara, WTTC president and chief executive, said: “It is vital for the survival of the travel and tourism sector that we work together and map out the road to recovery, through coordinated actions, and offer the reassurance people need to begin travelling once again.

“We have learned from past experiences that when the protocols from private sector are taken into account and we have a coordinated approach the recovery timeframe is significantly reduced, so the private-public sector collaboration is crucial.

“We should avoid new, unnecessary procedures that create bottle necks and slow down the recovery. However, a quick and effective restart of travel will only happen if governments around the world agree to a common set of health protocols developed by the private sector, such as those we’ve outlined.

Jamaica’s tourism minister Edmund Bartlett, who is also chair of the Global Travel and Tourism Resilience council described how they are working hard on protocols to be implemented as soon it is safe and described how post-pandemic travellers – or Gen-C travellers will need reassurance around the safety of the places they visit.

 

AVIATION

Flights in and out of Britain 91% lower

The Times reports that latest figures from Eurocontrol, which co-ordinates air traffic across the continent, show that flights in and out of Britain on Tuesday were 91 per cent lower than the same day last year.

Ryanair says up to 3,000 jobs will be lost

Ryanair has announced plans to cut 3,000 jobs and has warned that recovery will take two years. Ryanair expects some flights to resume from July after scheduling less than 1% of services in the three months to June due to European flight restrictions.

British Airways to cut 12,000 jobs

The Unite union has called on British Airways to withdraw its plan to cut up to 12,000 jobs and instead work with them and the Government to come up with a solution to secure the long-term future of UK aviation. The airline had made the statement to make staff redundant earlier this week due to the impact of the Covid-19 pandemic.

Simon Calder on independent.co.uk says the move is a good opportunity to get rid of staff on legacy contracts and that British Airways sees its near future as cutting back its operations by a quarter – and hopefully “shrinking to success”.

This will have effects on the route network, the fleet and fares.

Separately, the BBC reports that BA may not fly from Gatwick after the pandemic.

American Airlines to resume limited London flights In the Summer

American Airlines is to resume service from Chicago to Heathrow on June 4 with five flights a week, followed by New York JFK-Heathrow on June 7 with two flights a week.

5,000 job losses at SAS

Scandinavian carrier SAS has begun work on cutting up to 5,000 full-time positions from its future workforce as it warns it is likely to take “some years” before air travel demand returns to pre-crisis levels, says Flightglobal. The cuts will be split between about 1,900 full-time positions in Sweden, 1,300 in Norway and 1,700 in Denmark.

Lufthansa seeks bankruptcy protection

The Financial Times reports that Lufthansa is considering a Chapter 11-type bankruptcy protection procedure rather than considering bankruptcy protection as it seeks at least €9 billion in state aid as talks with the German Government break down amid demands for politicians to sit on the airline’s board.

Norwegian Air

As part of a planned $1.2bn debt-for-equity swap to try to ensure the low-cost airline’s survival, says The FT, Norwegian Air said that its base case was that its fleet would remain fully grounded until April 2021, with a full recovery not expected before 2022.

Argentina flight ban

Routes Digest says there has been an outcry over Argentina’s planned flight ban and the Government has been urged to reconsider proposals to ban all internal and international commercial flights until September.

A decree, signed by the country’s National Civil Aviation Administration, states that carriers should not be allowed to sell tickets for flights to, from and within Argentina in the next four months.

The country closed off its boarders to non-essential international travel on 20 March.

Four-hour wait to board flights after coronavirus pandemic

In a round-up of what air travel might look like as governments loosen restrictions, The Times provides a summary of analysis from a range of insiders and believes that the travel landscape is likely to be very different in terms of cost, route availability, number of airlines, ease and comfort.

  • Air passengers could face four-hour waits to board planes, up from one or two now, as medical tests are added to the normal pre-flight ritual of check-in, security, passport control and boarding, said Andrew Charlton, managing director of the consultancy Aviation Advocacy.
  • It is likely that social distancing will be maintained on aircraft, with warnings that as few as 20 per cent of seats may be filled to keep passengers at least two metres apart.
  • Expect inflated ticket prices. Budget airlines typically have to fill at least 80 per cent of seats to break even, so passengers could expect a big increase in prices and unprofitable routes will be abolished.
  • Wizz Air is demanding customers wear face masks from tomorrow and Lufthansa says that customers have to wear scarves or face coverings from Monday.

Europe’s corona corridor

British holidaymakers could find themselves left out of plans for Schengen countries to open up to each other, leaving British tourists out in the cold, warned ETOA boss, Tom Jenkins in The Daily Telegraph.

The idea of a "corona corridor" allowing tourists from the Czech Republic, Austria and Germany to reach resorts in Croatia has been discussed, while EU ministers have also mulled over the introduction of a “Covid-19 passport” enabling travel between member states.

The Refund Issue

ABTA is changing lobbying strategy to ask Government to

  • Provide clarification on refunds
  • To underwrite credit notes
  • To provide further protection for the industry to pay refunds without jeopardy of failure
  • To provide a further grace period for the repayment of refunds

Travel Weekly has reported on a UKInbound webinar with tourism minister Nigel Huddleston who agreed that the refund issue is a “hot topic” – and reports that MPs are being inundated from both travel companies and consumers saying how they are struggling. “We need to integrate those interests. Of course, what we don’t want to see is consumers unintentionally demanding money back, and then undermining the viability of that business if some alternative can be come to.

“What I can say is we are having conversations, in particular between Beis [the Department for Business, Energy and Industrial Strategy] which is responsible for consumer affairs legislation and also the Department for Transport because this is a major issue I know with airlines.”

CMA investigation into refunds

Travel Weekly has reported that a Covid-19 taskforce has been set up by the competition watchdog – the Competition and Markets Authority (CMA) - to investigate complaints over “thousands” of cancellations and refunds across three sectors.

The CMA is to investigate reports of businesses failing to respect cancellation rights covering holiday accommodation, weddings and private events, and nurseries and childcare providers.

Concerns include people “being pressured to accept vouchers for holiday accommodation which can only be used during a more expensive period”.

The CMA spokesperson said: “We expect airlines to provide refunds for cancelled flights as soon as practically possible.”

Banks block billions in lost holiday repayments

The Times reports that holidaymakers trying to get their money back for trips disrupted by the coronavirus outbreak have been blocked by banks despite having a right to refunds.

Travellers are owed an estimated £7 billion for unused holidays and flights amid anger at the lack of government action to resolve the problem.

Lobbying: Tourist businesses excluded from rate relief scheme

Trade associations representing thousands of tourist businesses, together with the Local Government Association, have written to the Chancellor of the Exchequer asking him to change civil servants’ interpretation of his Coronavirus Business Rates Relief Scheme, launched to support the UK’s hospitality and leisure industries.

Tour and coach operators, English language schools, destination management organisations and tourism and hospitality charities are being excluded from the scheme despite Rishi Sunak specifically extending it to all businesses in the hospitality and leisure industries on March 17.

However, guidance from the Ministry of Housing, Communities and Local Government says any relief to these businesses does not qualify for support because they are not in premises which customers enter to make a purchase.

Kurt Janson of the Tourism Alliance which co-ordinated the letter from eight tourism, English language teaching and transport trade associations as well as the Local Government Association, said: “It is hard to see how these businesses do not qualify as part of the leisure sector in government eyes. If this is not a lack of understanding, it is a false economy: these businesses generate so much income and so many jobs for local communities that it will be devastating if they are forced under through lack of support.”

Tom Jenkins, CEO of ETOA, the European Tourism Association representing 1,200 organisations, said: “Spending by international visitors is a vital component in the UK service economy. Without them, shops, restaurants, theatres and attractions cease to be viable. Those companies that sell the UK throughout the world are vital export businesses. These export companies now face a total loss of business in 2020. For the UK to recover in 2021 they must be allowed to survive. With assistance they have a chance; without this, tens of billions of future income will disappear.”

 

CRUISE

Plain Sailing Guarantee

Fred Olsen Cruise Lines has created a ‘Plain Sailing Guarantee’ including ‘quibble-free refunds’ and flexibility for guests wishing to transfer to alternative cruises.

The guarantee, which is “designed to offer reassurance during the Covid-19 pandemic”, also spells out revised payment terms including balance payments being due 28 days before departure, rather than 90 days.

Guests who transfer to another cruise will receive a future cruise voucher on top of any funds that have already been paid, which can be put towards another sailing. This voucher will be valid for 24 months, with all funds to be automatically refunded, plus an additional 5%, if it is not used within this time.

 

HOTELS

Hilton Hotels promise tougher cleaning regime

The Evening Standard on Tuesday 28 April reported that Hilton, which has about 150 hotels in the UK, is planning new cleaning standards for when travelling restarts, such as sealing doors after cleaning, disinfecting light switches, door handles, TV remotes and thermostats, limiting the number of people in gyms, cleaning public areas more often and providing wipes so guests can clean lift buttons before use.

Bookings are picking up

Travel Daily reports that the latest data from Hotelmize shows that after travel bookings in China fell to new lows in the past few months, bookings will pick up in May as China slowly eases restrictions.

Hotelmize, the developer of AI-based price prediction and profit optimisation technologies for the hotel booking industry, handles over two billion USD worth of reservations and generated more than 100 million USD of extra profit for its customers and help them understand how the situation will look like in the next months.

Chinese travellers are only able to travel domestically at the moment.

 

ENVIRONMENT

Future of travel and tourism by Responsible Travel

Justin Francis, founder of Responsible Travel has written a thought piece on the future of tourism after the pandemic.

He calls for the following things:

  1. For the views of local residents in poorer destinations such as Kenya to be given equal billing to those in the travel industry, Government and environmental movement as they are far more dependent on tourism and not as well equipped to weather the storm.
  2. For those most in need of support to get it and for destinations and source markets to rebuild tourism together.
  3. For governments to act like we (local residents, tourists, the industry, the environment and shared cultural heritage) are in this together and take a stronger hand in regulating tourism for the benefit of all, people and planet.
  4. In rebuilding, remember the huge value the democratisation of travel has brought to the quality of many people’s lives.
  5. To reward travel companies who can demonstrate they care about local residents, culture and environments throughout their entire operations.
  6. To treasure what tourism offers as, done right, it is a joyful and important industry, and one that deserves rebuilding carefully.

 What does fewer planes in the sky mean for the environment?

BBC Radio 4’s More or Less programme looked into the impact of the lockdown on the climate. Dr Zeikhouse Farther is the Director of Climate and Energy at the Breakthrough Institute and said that undoubtedly carbon emissions have gone down. They don’t know by how much, but it is unlikely to have a long-term positive impact. As industrial activity increases in China for example, emissions have already climbed back up to close to what they were before the lockdown. If the rest of the world recovers in next three months, then the emissions impact will be muted.

Chinese GDP fell by 10% in first quarter (the shut-down was in Feb and March). In terms of the impacts of air travel, whilst global air travel has scaled back by up to 80%, it is still only a few per cent of overall global emissions, so although for individuals who travel a lot, it can be a very large part of individual carbon footprint, the dramatic decline in aviation is going to reduce emissions, but not by very much at all.

 

ECONOMY

State support will offset just quarter of UK economic hit, says think-tank

The Financial Times reports that the National Institute of Economic and Social Research (Niesr) has forecast that UK government support schemes will offset just a quarter of the economic damage suffered by households and businesses as a result of the coronavirus lockdown.

 The report points to a fall in UK gross domestic product of more than 7 per cent in 2020, with unemployment rising to more than 10 per cent even in what its director, Jagjit Chadha, described as a “reassuring scenario” where “things go reasonably well over the next year”.

These figures suggest that despite the huge injection of monetary and fiscal support, the Government has been able only to soften the immediate short-term hit to the economy.

Niesr warned that the biggest challenges would come after the Government began to ease lockdown measures, and wind down its support schemes, since consumer spending and demand from other countries would still be much lower than normal. “Then, many businesses could struggle to bear the operating costs of being open while demand and sales are reduced because of the need to maintain social distancing,” the think-tank said, arguing that the Government would need to adapt its support schemes to prevent unnecessary business failures as the economy recovered.

Niesr’s forecast is more benign than the modelling published by the Office for Budget Responsibility, the official fiscal watchdog, which suggested that a three-month lockdown would result in a 13 per cent year-on-year fall in GDP in 2020.

Tourism Economics

A WTM webinar from Tourism Economics provided insights quantifying the impact of the pandemic and the global lockdowns on the economy and travel. They are impacting 80% of GDP and accounting for an 80% drop in flying, according to IATA. This will result in a much deeper economic crisis than the one of 2008/9.

As the first country to go into lockdown and the first out, China is making some headway in economic activity, but Tourism Economics says the impacts will inflict blows to income which in turn will impact consumer and business confidence with the result that we will see a spike in unemployment in major economies.

Government policies should lead to strong rates of growth and boost spending power after the recession, but even so, they believe that even 2022 GDP will remain lower than pre virus levels.

The dramatic fall in the number of flights has occurred across all regions and there is a strong correlation with the way the pandemic has evolved.

Europe saw huge declines in hotel occupancy – which was below 10% in mid-March and April – which also reflected large declines in inbound travel to Europe.

With the largest downturn in international arrivals being felt in Spain and Italy and around a third in all countries, the biggest falls from international markets has been from China. Tourism Economics estimates a loss of 287 million international visitors to Europe in 2020.

While it took the industry two years to recover from SARS, this time growth, whilst expected, will take much longer to recover, with numbers not expected to return until 2023.

In Europe, it is expected that current travel and border restrictions may well be in place until June when there will be a gradual easing of controls. This will have an impact on the peak summer period. It is anticipated that there will be a return to domestic travel first and then short haul travel. With long haul travel expected to recover slowly at the end of 2020. Major city destinations in Europe are much more dependent on long-haul source market for recovery, but drops in short-haul source markets will drive the biggest falls across Europe. There will be one to two years for recovery in domestic rather than a three or four year recovery for international travel.

Recovery of tourism in European cities will depend on the source market mix, with those more dependent on long haul markets more vulnerable.

Markets are recovering

The Times reports that despite the fact that the UK GDP is expected to shrink by 35 per cent in the second quarter and up to a third of the workforce furloughed, the global stock markets have risen so far above their lows in mid-March that many are now back in official bull market territory. The FTSE 100 yesterday soared back above 6,000, up 22 per cent from its March low, having fallen 33 per cent from its previous peak.

 

BUSINESS TRAVEL

Business travel sees light at the end of the tunnel

Results from a poll from the Global Business Travel Association of 1,600 members have been reported across travel trade media and BTN Europe and reveals that more than half of companies are planning for recovery in business travel in 2020 with one in three companies planning for a recovery in three months or less and a quarter plan for a post-recovery in six to eight months.

The research findings reported in Travel Weekly also revealed that European members of the association (74%) are more likely than those in North America (58%) to expect domestic business travel to return in two to three months.

Members based in North America (21%) are more likely to be unsure when domestic business travel will resume compared to members based in Europe (12%).

Chief executive Scott Solombrino said: “The majority of GBTA member companies expect domestic business travel to resume in the next two-three months and most expect employees will be willing to travel.”

 

DESTINATIONS

All destinations have travel restrictions

Breaking Travel News reported on Wednesday that according to the United Nations World Tourism Organisation, the Covid-19 pandemic has prompted all destinations worldwide to introduce restrictions on travel.

This represents the most severe restriction on international travel in history and no country has so far lifted restrictions introduced in response to the crisis.

  • 45% have totally or partially closed their borders for tourists - “Passengers are not allowed to enter”
  • 30% have suspended totally or partially international flights - “all flights are suspended”
  • 18% are banning the entry for passengers from specific countries of origin or passengers who have transited through specific destinations
  • 7% are applying different measures, such as quarantine or self-isolation for 14 days and visa measures.
  • In the regions of the Middle East (54%) and Africa (45%) the measure of suspending flights prevails over other types of measures, while in the Americas (51%), Europe (48%) and Asia and the Pacific (46%), it is the closure of borders (total or partial) which is more dominant.

Destination focus

Travel Daily reported on the following countries and how they have slowed down the rate of new cases.

China

China, the epicentre of the Covid-19 outbreak, seems to have greatly controlled the transmission of the virus. Around 89% of coronavirus patients in China have recovered and have been discharged from hospitals, according to reports from the country’s National Health Commission. The severity and scale of the containment measures implemented by the Chinese government have resulted in a dramatic decrease in the number of daily cases.

South Korea

Another country that has recovered in an efficient manner is South Korea. Their model of ‘trace, test and treat’ strategy has helped in flattening the Covid-19 curve significantly – a model that is admired by many other Western countries. Unlike most affected countries, South Korea has relied on widespread testing and digital tracking of suspected cases to contain the pandemic, instead of imposing lockdowns or curfews.

Hong Kong

Despite its proximity to China, Hong Kong succeeded in containing the outbreak by taking measures to prevent transmissions internally. Authorities implemented a mandatory 14-day quarantine for anyone coming from China. They were also quick to set up quarantine facilities and negative-pressure beds for proper isolation and enforce social-distancing measures such as working from home, cancelling public events and closing schools.

Taiwan

Taiwan has managed to successfully contain the virus, even though it is located just over 128 kilometres from mainland China. Learning from the previous SARS outbreak, the Government sprang into action as soon as word broke about a pneumonia-like disease in Wuhan in December 2019. They began extensive screening of travellers from Wuhan from 31 December, set up a system to track those in self-quarantine, and ramped up production of medical equipment for domestic use in January. They were also the first country to ban flights from Wuhan, on 26 January. The utilisation of big-data for intensive health monitoring of the population as well as Taiwan’s excellent public healthcare system helped limit the spread of the virus.

New Zealand

Prime Minister Jacinda Ardern boasted that the country has won the battle against Covid-19 after weeks of level 4 lockdown – the strictest constraints placed on the country. Over the past few days, newly diagnosed infections have been in the single digits. New Zealand has reported 19 deaths and 1,472 confirmed and probable coronavirus cases, according to Johns Hopkins University. New Zealand has ramped up its testing, to the point that it can now carry out up to 8,000 tests per day. The country eased the restrictions to level 3, but Ardern is still urging vigilance saying NZ is “not out of the woods” yet.

France

The Times reports that the eurozone economic growth crashed in the first quarter of the year as the region’s second largest economy officially entered recession with its biggest contraction since the end of the Second World War.

But on Wednesday, it was announced that shops and schools across France will reopen and free movement will be restored within 60 miles of homes when the lockdown is eased on 11 May.

Germany

The BBC has reported on Thursday that while Germany has taken cautious steps to ease its coronavirus lockdown, allowing small shops to reopen last week, it has warned against worldwide travel until 14 June.

Foreign Minister Heiko Maas said Germany's fight against the pandemic was not at a stage where he could "recommend carefree travel".

"People won't be able to spend a holiday as they usually know it, on full beaches or in full mountain huts."

Germany warned on Wednesday that its economy could shrink by a record 6.3% this year.

Greece

Minister of Greece Harry Theoharis has been on a media offensive media offensive to highlight that Greece will be at the forefront of attracting British visitors back to Greece this summer once border restrictions are relaxed as Greece’s economy relies heavily on tourism. But, he said, new rules and social distancing measures will be put in place to ensure both people in the destination and visitors will be safe.

Theoharis told The Guardian that the country is planning the new protocols: “We have to have new rules for hotels, new rules for beaches, new rules for pools, new rules for breakfast buffets, new rules for tour buses.

“Once measures are relaxed a good month will be required to prepare the ground for the [tourism] engine to get started.

“Tour operators are waiting and hoping we can come up with the right rules so that we can start bringing visitors in.”

He told BBC Radio 4 that it would be “very likely” that tests for coronavirus will be required before travel.