LOTUS Coronavirus update (11.06)
REFUNDS
CMA wins refunds victory over Vacation Rentals
One of Britain's biggest "staycation" travel providers has agreed to refund customers who had their holidays cancelled after the Competitions and Markets Authority intervened.
Hoseasons and sister company Cottages.com, owned by Vacation Rentals, have reversed their policy on refunds and the companies will now give the options to refund to all customers, whose holidays were cancelled due to the lockdown.
The authority said its Covid-19 task force had received more than 4,500 reports about British holiday rental companies refusing to give full refunds or offering only vouchers, with complaints about Vacation Rentals making up a “significant proportion”.
The consumer watchdog has also recently expanded its investigation to include package holiday companies.
QUARANTINE
The controversial 14-day quarantine rules for arrivals into the UK were officially implemented on Monday 8 June as a Home Office spokesman admitted it ‘was very hard to imagine’ how some of the measures would work ‘in practice’ and within hours Jet2 and Virgin Holidays cancelled all departures in the first half of July.
The current quarantine plans involve all passengers - bar a handful of exemptions - to fill out an online locator form giving their contact and travel details, as well as the address of where they will isolate, under government measures that are now in force to guard against a second wave of coronavirus. People who fail to comply could be fined £1,000 in England, and police will be allowed to use what is termed “reasonable force” to make sure they follow the rules.
Ryanair, easyJet and BA-owner IAG have launched legal proceedings (pre-action protocol letter) calling on the UK government to remove the quarantine rules.
In addition, a group called Quash Quarantine, which includes outbound travel businesses and UK hospitality enterprises from Kuoni to TGI Fridays, has also been threatening legal action to overturn the measures.
While the measures have initially been imposed for a year, the Government has said they will be reviewed every three weeks. The first review date is 29 June.
The effect has been to stifle inbound and outbound tourism for the summer.
The Quash Quarantine group say, according to The Independent, that it has been given private assurances by Government that travel corridors will be in place by 29 June.
The Evening Standard on Monday splashed with ‘Britain is Closed’ – referring to the introduction of the 14-day quarantine for UK arrivals. Passengers told of confusion and chaos as even though terminals were almost deserted, there were still queues as passengers had to fill in forms at the last minute.
Kit Malthouse, the Minister of State for Crime, Policing and the Fire Service said that the measures could be swiftly watered down.
Reactions include:
Heathrow’s CEO John Holland Kaye said: thousands of jobs would be at risk if the quarantine is not lifted soon.
Ryanair’s Michael O’Leary said: quarantine will cause ‘untold devastation’ for the UK’s tourism industry.
He told the Today programme on BBC Radio 4 and ITV’s Good Morning Britain that while thousands of British families were booking their holidays for Portugal, Spain and Italy, there has been almost a collapse of inward bookings to the UK, on which Britain’s tourism industry depends, particularly in the peak months of July and August.
Asked whether Ryanair would cancel July and August flights if the quarantine remained in place during those months, Ryanair boss Michael O’Leary told Radio 4 listeners: “No, because the flights are full outbound of the UK. British people are ignoring this quarantine, they know it’s rubbish.”
Union bosses criticised the way the measure was being introduced as being shambolic and warned that there was no provision to check the address.
IAG chief executive Willie Walsh told Sky News on Friday (5 June) the policy, had "torpedoed" BA’s chances of resuming flight operations in July.
WTTC president and chief executive Gloria Guevara: If quarantine and travel restrictions aren’t lifted, then 2.9 million jobs could be under threat, while the measures could wipe $186 billion off the sector’s annual contribution to UK GDP – which would be down a massive 73% on 2019. “Lifting quarantine, establishing air bridges, adopting global health and safety protocols, and implementing a rapid test and trace strategy will be vital to protecting at-risk travel and tourism jobs in the UK.”
The Sun reported that Boris Johnson wants to agree a cross-EU exemption to the order for all arrivals to the UK to isolate for 14 days. And he wants the travel ban eased as soon as possible.
Travel Weekly reported on Wednesday that confirmation of establishing links to foreign holiday destinations could come as early as this week, but travel corridors would have to coincide with a change to FCO advice.
Speaking on Sky News, the Health Secretary Matt Hancock said he "really hopes people are going to be able to fly to go on summer holiday".
On Thursday, BBC Radio 4’s Today programme interviewed a spokesperson from London First who was representing a number of lobby groups and universities including those who have written a new letter to the Government asking for clarity about quarantine and when it will end.
Jasmine Whitbread, CEO said: “The blanket 14-day quarantine is a blunt instrument and we want to establish travel corridors and return to a risk-based approach. The new letter wishes to highlight breadth of the impact on jobs and economy. Foreign students alone add £6.9 billion a year to the UK economy while tourism is about 7% of the UK’s economy. A very blunt approach will have a disproportionate impact.”
INSURANCE
Saga adds Covid-19 cover to travel insurance
Travel Weekly reports that treatment abroad for Covid-19 and repatriation to the UK is being included as standard as part of Saga travel insurance policies.
The over-50s specialist has added the cover to help customers feel more comfortable about travelling once the government advice changes to say that it is safe to do so.
ECONOMY
OECD predictions
On Wednesday, the Organisation for Economic Co-operation and Development (OECD) warned that the UK is likely to be the hardest hit by Covid-19 among major economies.
Britain's economy is likely to slump by 11.5% in 2020, slightly outstripping falls in countries such as Germany, France, Spain and Italy, it said.
If there were a second peak in the pandemic, the UK economy could contract by as much as 14%.
"The crisis will cast a long shadow over the world," the OECD added.
It said that in what it called a "single-hit scenario", with no second peak, there could be contractions of 11.4% in France, 11.1% in Spain, 11.3% in Italy and 6.6% in Germany.
In its latest assessment, the OECD found that the UK's largely service-based economy meant that it had been particularly badly hit by the government's lockdown restrictions. The services sector, including financial services, hospitality and tourism, makes up about three-quarters of the UK's GDP.
Faisal Islam, the BBC’s Economics Editor said: “The expectations or hopes of a rapid bounce back in the economy - a so-called V-shaped chart - is not now happening.”
As Secretary General Angel Gurria put it to me, it will be "U-shaped", the question is how long will be the period at the bottom of this "U". This pattern is not affecting all countries equally.
The OECD also predicts the strongest growth in the UK at 9% for 2021. It also mentions the pandemic’s economic impact is being "compounded" by the looming plausible failure to sign a trade deal with the EU and new trade barriers with the European Union at the end of the year. It recommends temporarily extending the UK's stay in the single market. That is advice that the Government has shown no inclination to follow so far.
Global impact
The OECD said the pandemic had started to recede in many countries and activity had begun to pick up, but it does not expect a convincing recovery. It sees the outlook for public health as extremely uncertain.
Noel Josephides, of AITO and Sunvil Holidays warned, that “if we can’t trade and we can’t bring cash into our businesses, there will be redundancies and company collapses.”
At a technology conference, CogX, Tony Blair urged workers to reskill as he warned that if workers failed to retrain for the digital economy then they could be left behind once government support schemes were wound down. He said: I can’t see travel, tourism and hospitality industries coming back very fast. I think bricks and mortar has had its day, certainly in its present form. There is a necessity to re-equip people with what they need.”
CBI
The CBI has said that UK businesses do not have the resilience to cope with a no-deal Brexit after the battering of the coronavirus crisis and has called for an extension to negotiations, that have not been going well.
PRICING
The Times splashed with a pricing story on Monday and revealed that holiday firms are hoping to lure nervous Britons abroad with cheap deals.
“Travel companies are already cutting prices by up to two thirds in an attempt to restore confidence and entice holidaymakers to book overseas trips this summer, with more deals expected in the coming weeks,” wrote Ben Clatworthy. The piece reported that Number 10 has told Grant Shapps to have “air bridges” agreed by 28 June, and if that is the case, it will be possible to return to “mass-market holidays” in July.
The Times piece was informed by a TTG feature examining the future of pricing, which argues that the evidence of sun-drenched British beaches in May suggests that there is no lack of demand but that in order to stimulate demand for overseas holidays, the consensus is that pricing will include bargains to allay anxieties, which will then be followed by price hikes.
This summer airline seats will be dramatically cut compared to last year. EasyJet will operate half its routes in July and fewer than 75% in August, so those looking to dynamic package, will have a shortage of options. Reduced airlift is leading to hotels to offer rates to operators, but there are concerns that again, prices will rise later in the year. Prices for ground transportation as well as chartering aircraft are giving tour operators cause for concern – with a short season and needs to provide social distancing on coach transfers, which could all push prices up.
Travel Weekly followed up reporting that average package holiday prices to the Algarve have dropped by as much as 48%. According to TravelSupermarket, uncertainty is pushing prices down, and until the FCO lifts its advisory against global non-essential travel, has made certain that demand is rock bottom, although searches have resumed within the last two weeks.
Travolution reported that the weekly icelolly.com Covid-19 Pulse report saw August searches leap 145% week-on-week this week although it remained the seventh most popular departure month in searches and bookings are still mostly focussed for 2021.
BOOKINGS
Travel Agent Tracker
TTG has reported that travel enquiries were at their highest level since they launched the TTG Travel Agent Tracker in April with three-quarters of respondents taking new holiday enquiries during the week ending 5 June, up 7% week-on-week. More than a third reported an increase in sales, with agents also reporting that consumers are angry that quarantine measures have been introduced now.
Caravan Holidays
The Times reported at the weekend that website searches for caravan holidays are up 20% and that caravan holidays are attracting a younger crowd.
ForwardKeys
GTP has reported that international flight bookings for Greece, Portugal and Spain have seen a significant jump for July and August, according to flight analyst ForwardKeys.
On 20 May, the Greek Government made announcements that the country would open its doors from 1 July and markets reacted immediately. Between 20 May and 3 June the number of international flight tickets issued for Greece increased from effectively zero to 35 percent of what they were during the same period in 2019.
In the 12 days from 22 May – 3 June, the number of international flight tickets issued for Portugal, increased from effectively zero to 35 percent of what they were during the same period in 2019 and in the 11 days from May 23 – June 3, the uplift in Spain has reached 30 percent.
Leisure travellers make up the bulk of new tickets, but recovery is stronger amongst expats and those visiting friends and relatives, and there are still relatively low levels of bookings as many are still reluctant to fly.
Private Fly
Private jet charter firm PrivateFly has reported an 85% rise in enquiries from agents in the past two weeks. Hannah Needs, PrivateFly’s head of partnerships, said: “With travel restrictions easing in much of Europe from 15 June, we are very busy indeed with enquiries from travel agents, concierges and yacht brokers.
“They are telling us their clients are desperate to get away but are reluctant to fly on airlines until the risk of Covid-19 has reduced significantly – particularly those with families, or those who are older or in higher risk groups. Agents are increasingly looking at private aviation as a solution, so holidays can go ahead safely and with peace of mind.
“Private jet travel is obviously more expensive than airlines but for clients prepared to spend more, it offers far greater control over your environment, both in the air and on the ground.”
CRUISE
What next for the cruise industry?
Cruise specialist, Sue Bryant examined the current situation for cruise in The Times.
Her findings are:
- All ships are currently in limbo and in clusters off the Canary Islands, Bahamas and Manilla, or around Southampton and off the Isle of Wight, Tilbury and Rosyth. Others have gone back to home bases such as Italy.
- Many ships are in what’s called “warm lay-up”, which means they could, in theory, start operating within a couple of weeks. For all this to happen, borders need to open, flights need to operate, Britain’s blanket quarantine needs to be refined and infrastructure in ports needs to be functioning.
- In the meantime holidays continue to be cancelled on a rolling basis, with passengers being offered refunds or future cruise credits. Marella Cruises expects to start at the end of July. P&O Cruises this week delayed its return until 15 October, Cunard until November and others may well follow.
“Our current focus is on close co-ordination with all relevant public health bodies to approve further enhancement of our already stringent health and safety measures,” said Paul Ludlow, the president of P&O.
Domestic cruising
Saga is understood to be looking at cruises around Britain without ports of call, while Viking Cruises is speaking to its regulars to gauge interest in similar cruises, subject to government advice.
How soon will we be cruising again?
It will be a slow start. The first river cruise, run by the German line Nicko, started on the Danube and Rhine last week. Another German line, A’Rosa Cruises, is planning to start sailing the Douro as well as the Rhine and Danube in June.
Hurtigruten and the luxury SeaDream Yacht Club will start sailing the Norwegian coast this month, but with the country’s border closed until 20 August, only locals will benefit.
Launches?
Twenty-two ships were due to launch this year, but there are now inevitable delays. New orders are stalling, and the market will be flooded with second-hand ships.
What changes are we going to see on board?
Smaller cruise lines are saying that they will sail at between 50 and 70 per cent capacity; big ship lines are yet to be specific. Expect constant temperature screening, relentless disinfecting and endless hand-sanitising. When big ships start up, embarkation could be staggered to avoid crowds in cruise terminals. Buffets will be waiter service only and spas will, for now, be closed. Facemasks could be mandatory. Royal Caribbean has even applied to trademark a face covering design.
The Financial Times Big Read
Alice Hancock has also been interested in how Covid-19 has impacted the sector in an analysis piece: ‘Coronavirus: is this the end of the line for cruise ships?’. It reports that the 338 ships that make up the industry are docked and Carnival, the world’s largest cruise company, is haemorrhaging $1bn a month.
Operations are on halt until at least August, with bookings for 2021 reportedly at the same level as last year.
More than 60,000 crew members remain stranded aboard ships waiting to find out whether they will be repatriated.
Carnival, Royal Caribbean and Norwegian, whose ships make up 70 per cent of the industry’s ships, now face multiple court cases from passengers who lost relatives and crew who became ill.
The cruise industry adds an estimated $150 billion to the global economy according to CLIA, serving 3% of the population.
Norwegian and Carnival have both fundraised during the pandemic but there are plans to lay off staff and cut pay.
The industry has one of the highest repurchase rates of any sector – with 85% who take a cruise booking again.
Reinvention
Following a question to the Prime Minister about the shut down of the cruise industry in Southampton putting hundreds of jobs at risk, TTG reported that Boris Johnson responded: “"Like all industries, the cruise industry – I think – is going to have to go through, in the short-term at least, a period of self-reinvention to make sure that it is Covid-secure.
"And I have no doubt it can do it. It is a great, great British industry, and we will support it in any way we can."
Southampton is the UK’s busiest cruise port, with a number of cruise lines homeporting ships in the city including P&O Cruises, Royal Caribbean International, Princess Cruises, Celebrity Cruises and Cunard.
However, Johnson provided no detail as to how the government would support the sector.
Southampton is the UK’s busiest cruise port, with a number of cruise lines homeporting ships in the city including P&O Cruises, Royal Caribbean International, Princess Cruises, Celebrity Cruises and Cunard.
Silversea takes delivery of a new ship
Travelmole reported that Silversea Cruises has taken delivery of its first-ever destination-specific ship, Silver Origin. It's the first in-person cruise ship delivery since the pandemic lockdown. The all-suite, all-balcony, 100-guest Silver Origin will welcome travellers year-round in the Galapagos Archipelago and has a number of environmentally low-impact features.
Hurtigruten
Hurtigruten has announced a year-round programme of voyages departing Dover from mid-March next year.
Riviera Travel
Travel Weekly reports that Riviera Travel has announced a strategic review of its business and entered a 30-day consultation with staff with up to 95 roles at risk.
MSC
Breaking Travel News reports that MSC will extend the fleet-wide halt of its cruise operation through to 31 July. At the same time it confirmed its full summer programme for 2021 starting from March.
CMV
Cruise & Maritime Voyages (CMV) has launched a new range of ‘Destination Spotlight’ films in its CMV at Home series. Each week CMV invites people to tune in to CMV TV to view the featured destination starting this week with the British Isles.
Cunard
TTG reports that Cunard has extended its suspension of operations until November due to the “continued impact of Covid-19.”
For Queen Mary 2 and Queen Victoria, Cunard is cancelling all sailings due to depart up to and including 1 November, while cruises onboard Queen Elizabeth have been axed up until 23 November.
Carnival in Miami operates 105 ships on nine cruise lines. It suspended dividends and share buybacks and cut non-essential capital expenditure. In April it tapped the capital markets for $6 billion to get it through the crisis.
Canada cruise cancelled until 31 October
Travelmole also reports that Canada has extended the ban of cruise ships in Canadian waters that accommodate more than 100 guests overnight until 31 October 2020.
AVIATION
UK aviation health panel reports to Government
Recommendations for safe air travel have been sent to the UK aviation industry and the Department for Transport, reports the BBC. Prof Ashley Woodcock, an expert in respiratory medicine from the University of Manchester, led a panel of aviation health experts which recommends:
Passengers should:
- Wear face coverings at all times
- Use alcohol hand sanitisers frequently
- Stay 2m (6ft) away from other people and their baggage, where possible
- Board and disembark one row at a time and be seated apart from others if possible.
- Those seated at the back should be the first on and last off.
On board, there should also be 'sequencing' of toilet visits - with people asking permission to go from cabin crew - and a spare supply of face coverings, it adds.
Passengers with a long-standing cough caused by asthma, COPD or other respiratory disorders should consider wearing a coloured mask to highlight their underlying condition.
In airports, shops and restaurants should be opened but managed carefully to avoid overcrowding.
The panel also said that thermal-imaging cameras and swab tests for coronavirus are not "clinically valuable" in airports, as about one in every three infectious people would be missed.
Air systems and low humidity on planes already reduces virus spread through the cabin.
Airlines to lose $84 billion in 2020
Reuters reports IATA (the International Air Transport Association) forecasts that airlines are set to lose $84bn (£65.9bn) in 2020 as a result of the coronavirus pandemic. IATA said revenue would likely halve, falling from $419bn from $838bn last year. IATA forecast a rise in 2021 revenue to $598 billion.
Total seat numbers in Europe are down 84.6% year-on-year in the week of 18 May 2020, according to schedules from OAG combined with CAPA Fleet Database seat configurations.
This is almost 2 percentage points narrower than the previous week's 86.5% drop and the smallest rate of decline since March 2020. Nevertheless, it is the seventh successive week of cuts broadly in the -85% to -90% range.
Europe's cuts are no longer the world's deepest. That distinction now belongs to Latin America, where seats have dropped by 88.7% year-on-year. Seats are down by 80.8% in Middle East, 80.5% in Africa, 78.7% in North America and 51.6% in Asia Pacific. The rate of fall is narrowing in the three big regions – Asia Pacific, Europe and North America – but widening in the others.
Data based on filed schedules indicate that European aviation may be at the beginning of a slow rebuilding of capacity.
However, plans by Ryanair, IAG, Lufthansa and Air France-KLM imply that capacity for Europe's leading groups will still be reduced by around 50%-80% in July 2020. Even those plans are based on the lifting of restrictions.
Wizz Air
Following positive financial results with an underlying net profit growing 29.9% to a record €344.8m, the airline hit turbulence as reports emerged that it had handed its management share bonuses, potentially worth millions of pounds, despite making a thousand staff redundant, using the government's furlough scheme and borrowing hundreds of millions of pounds from the Bank of England's emergency funding line.
There is likely to be a backlash from politicians and trade unions, says The Times.
Virgin Atlantic
Virgin Atlantic has announced its plan to restart passenger flying, with services from Heathrow to Orlando, Hong Kong, Shanghai, New York JFK and Los Angeles set to resume from 20 and 21 July.
EasyJet
EasyJet is resuming flights from next week, although this will be primarily for domestic routes only. Following this, half of its fleet will start overseas flights in July and 75% will resume in August but with around 30 per cent of its normal flying capacity between July and September. It has announced new safety measures too.
Six new routes are being added by easyJet from Luton airport for next summer. Zakynthos, Larnaca, Fuertevenura, Gran Canaria, Marrakech and the Bulgarian beach destination of Varna are being introduced.
EasyJet is also launching a promotion which sees 25,000 seats to holiday destinations across Europe on offer from £19.99 on selected routes for travel between 1 July and 31 October.
Ryanair
Ryanair will resume flying on 1 July.
British Airways
The UK flag carrier hopes to resume flights from 1 July with just eight routes from London Heathrow and added health and safety measures.
Later in July, international flights will resume to 29 destinations within North America, Asia and Africa.
Jet2
Jet2 has postponed the launch of its flights, with routes resuming from 15 July to 40 destinations including Spain, Portugal and Greece with added health and safety measures.
Regarding refunds, Jet2 is allowing passengers to either move their flight booking to another date without charge, or to use a credit note within six months. More detail can be found here.
United Airlines
United is the first airline to ask all passengers to complete a health self-assessment during check-in.
Gatwick North Terminal
London Gatwick North Terminal will reopen on 15 June.
Cathay Pacific and Austrian Airlines bail outs
Business Traveller reports that the Hong Kong Government will bail out Cathay Pacific. The deal is part of a US $5 bn recapitalisation by the airline.
Austrian Airlines is also to be bailed out by the Austrian Federal Government and Lufthansa, but ecological requirements have been imposed including shifting short haul passengers onto rail (similar to Air France); cutting CO2 emissions and increase jet fuel efficiency.
TOUR OPERATORS
Jet2holidays
As with Jet2.com, Jet2holidays has postponed the resumption of its summer programme to 15 July and reiterated its commitment to working with independent agents on rebooking options.
The operator had originally planned a 17 June return, but has subsequently pushed the date back.
G Adventures
G Adventures has unveiled a new ‘Travel with Confidence’ policy, which introduces new safety procedures across all future G Adventures trips. Designed to ensure the safety and wellbeing of both travellers and employees, while continuing to deliver the adventure of a lifetime, the policy includes new social distancing and hygiene measures, which will be in place from the moment travellers join a trip until they depart.
Kuoni
Sky News reported that UK holidaymakers are swapping planes for caravans this summer, with many planning staycations and saving up for an "extra special" holiday next year.
Travel firm Kuoni reported a "clear upturn" in demand for 2021, with more than half of customers booking a trip to the Maldives, famed for its white sandy beaches.
Kuoni chief executive Derek Jones said: “Whilst there is still so much uncertainty around plans to open borders, the 14-day quarantine and social distancing, people are telling us that they’d rather plan ahead for next year and save to make the trip an extra special one, upgrading what they’d normally do.” “It’s clear from the conversations we’re having with customers and booking patterns that many people will opt to stay closer to home within the UK this year as they see overseas travel in the near future as being too risky.”
Wendy Wu Tours
Founder of tour operator Wendy Wu Tours, Wendy Wu, was interviewed by The Telegraph and provided some insights into changes. She said: “People will want to be safe. They will want to go to safe destinations and know all will be well. People will want operators to look after them. They will book even more holidays online rather than on the high street.
“Funnily enough, China will be one of the safest places on earth. It has made itself a fortress against the virus. Countries like South Korea and Taiwan have had very few cases and dealt with the virus very effectively. The five stans of Central Asia – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – also had very few cases and will be safe.
“Like China in the Nineties, they are little-known and seen as difficult and challenging. As with China, we will seek to make them more mainstream and accessible.”
ACCOMMODATION
Hotels face valley of death to recovery
Hotels will see outgoings ratchet up as they prepare to open and won’t see income until after their first guests leave, leading them down a very precarious ‘valley of death’ – says Nicolas Mayer, PwC industry leader for hospitality and tourism in Europe, the Middle East and Africa, who said: “The most-scary thing for me is the moment the tourism ecosystem opens, especially for hotels in destination. There is a valley of death where cash goes out when you start ramping up, hiring, investing in inventories, but the first cash inflows come after guests have left. That gap can be 150 days.”
Recovery Roadmap for Hotels
In a Phocuswire webinar on ‘The Recovery Roadmap for Hotels’, Robert Gilbert, President and CEO of Hospitality Sales and Marketing Association International (HSMAI) outlined the three key concerns for travellers: - those of health, personal finances and safety with regards to flying and staying in hotels. But he cited a rolling Deloitte customer survey which has seen six consecutive weeks of decline in those concerns, albeit only a slight decline in consumers’ concerns in making regular payments and delaying large purchases.
HSMAI’s own research of members has found that 82% of members believed that the leisure sector would return first with intentions to holiday and fly this summer up from 24% in April to 31% in May. He said that consumers were wanting to hear from hotels about packages, special deals and flexible bookings.
Within the corporate sector, business traveller intentions are improving and domestic corporate travel will rebound quicker than international.
In May, the Global Business Travel Association said that 98% of members had cancelled international travel and 92% had cancelled domestic. However, research in June found that more than half of respondents planned to resume travel in the near future.
Gilbert said that the meetings and conventions business sector – which represents about a third of hotel revenue globally - would be the last sector to fully recover. The variables for recovery are complex, with new social distancing; room and seating configurations and F&B considerations needing to be cross-referenced with regulations dictated by national, municipal, and state governing bodies.
Reports so far are that events that are not cancelled are rescheduling in 4th quarter 2020 or 2021.
A survey from the PCMA (Professional Convention Management Association) has found that 87% of respondents had cancelled one event; 66% had postponed and 61% were still evaluating whether to postpone or cancel an event.
This sector will undoubtedly look different post-pandemic, but there could be a spike in demand for functions for those who have not been able to meet in the first three quarters of 2020. With all sectors, health, personal finance and safety will trump all other considerations and the hotel sector still has to contend with the ongoing health and economic uncertainty that the pandemic poses.
Regional market performance
Kate Moro, Vice President of Data Partnerships at Amadeus looked at bookings across the globe and presented statistics that reflected bookings data that are currently on the books from participating Amadeus hotels.
Moro says that they are beginning to see strong signs of demand in some markets – and in those markets hotels should hold their rates [and not discount]. Right now, however, there are signs that most rates are dropping.
USA
Pre-Covid, there were approximately 6.5 million reservations in the USA per week but by the start of the pandemic there were more cancellations than bookings. However, in the week of 24 May, the USA saw two million reservations – it is the seventh week-on-week increase in bookings. Occupancy is at around 20%.
However, the booking windows are short – mostly in the 0-14 day booking window and in most areas, the booking window is shorter than that, with many in the 0-3 days booking windows, with the shortest booking rates seeing the lowest rates.
Amadeus is seeing strong demand in the leisure sector in some regions and resort areas. For example, in the Panhandle of Florida, there are reports of 60% occupancy from individual bookings. The consumer profile is domestic and self-drive.
Canada
The two weeks up to 24 May began to see net positive bookings with recovery from individual bookings. The short term booking window is strong, but there is no base for future bookings. Most hotels are still showing a 10% occupancy from individuals, but this may change as the country opens up and the holiday around Canada Day on 1 July looms.
UK
The week of 24 May was the first week that have been positive for bookings in the UK. Hotels have generally had an occupancy rate of under 5% since March and average room rates are low.
Mexico
The week of 24 May provided Mexico with the fifth week of positive growth in room occupancy.
Data
Moro said that despite the need for hotels to fill beds in times of low demand, research consistently proves that lowering rates doesn’t necessarily drive demand, but appreciates that occupancy recovery is faster than rate recovery, yet urges hotels to think about providing added value rather than lowering prices.
She also urged hoteliers to understand the booking window in their own market – so that they can provide tactical marketing when the customer is booking – whether that is flash sales or impressions on online travel agent sites.
It’s important for hotels to understand the nuances in local markets. Research into New York City’s relatively high occupancy rates during lock down revealed, for example, that health care workers were using the rooms. Hotels are likely to be used for other things in future, for example dorm rooms for students. Understanding this is important for recovery and important to benchmark appropriately to make the right recovery strategies.
She looked at future group bookings in NYC for Q4 2020 – and compared the picture between February and June 2020. The picture looked the same. No change had been made to block bookings in the intervening months, but she urged hoteliers to find out whether these bookings will be maintained, as knowing this will be critical for planning for Q4.
Data from 2019 suggests that short term group bookings are becoming more prevalent and hotels can capitalise on those shorter booking windows this year.
Gilbert outlined that recovery for post-Covid-19 is going to be different from previous crises.
Findings so far:
- CBRE economists found that on average hotels are opening 8-12 week after the peak of the virus in each country
- CBRE economists assessed countries and regions coming out of lockdown and provided categories: 1) recession - and cautious of a second wave: Spain, Iran, Turkey, Russia, India and Peru, USA, UK. 2) gradual re-opening and stabilisation – most of Europe, and Australia and Canada 3) There are a handful of countries in growth mode – who are 70% normal - China, Austria, Denmark, Czech, Norway. At present there is only one country that is still in lockdown and freefall mode – Brazil.
- Gilbert also suggested that individual markets are likely to recover at different speeds. With some recovering in 4-6 months and others taking 10-14 months and yet others whose recovery is likely to be even longer.
Amadeus and HSMAI have free resources to download. Amadeus Crisis management for hospitality can be found here and coronavirus resources from HSMAI can be found here.
Top tips include:
For revenue management
- Build your segmentation strategy to align with recovery phases
- Consider a flexible pricing strategy while guarding your rates
- Review and create new competitive sets based on market changes
- Remain flexible, regularly revisiting your plan over the long term
Sales
Key considerations include:
- Ensure sales team has the training and resources they need for a new approach to consumer expectations
- Create new packages
- Adapt to the needs of a new digitally confident consumer
- Check with customers, clean database and constantly re-evaluate
Marketing
Key considerations include:
- Evaluate changes in your market demand, feeder market, regulations and competition activity
- Research government guidelines for your area in your feeder markets to align timings for marketing plans
- Understand new traveller expectations and update profiles for current and future guests
- Craft sincere, clear and relevant messaging and update materials across all channels to ensure consumer confidence
- Establishing strong relationships is key – remain responsive and flexible when engaging with guests
EVENTS
WTM to go ahead
TTG reported that WTM will take place at ExCeL as planned in November, following the venue’s use as one of the NHS Nightingale field hospitals.
DESTINATIONS
FCO tweaks global travel advice
TTG reported that the Foreign Office (FCO) has tweaked the wording of its global advisory against all non-essential travel. Back in March, the FCO advised UK nationals against all non-essential travel worldwide for an initial 30 days. However, this was extended to an "indefinite period" in early April.
At the weekend, the FCO dropped "indefinite period" from its advisory.
The new wording reads: "The Foreign and Commonwealth Office currently advises British nationals against all but essential international travel. This advice is being kept under constant review."
Europe
Travel Daily reported that European Union Home Affairs Commissioner Ylva Johansson announced that the EU free-travel zone could be up and running again before the end of June.
Countries in the 26-nation Schengen area had imposed border restrictions without consulting their neighbours and all but essential travel into Europe from outside is restricted until 15 June, but many ministers have suggested that they wanted this deadline extended until early July.
UK
English outdoor attractions, including zoos and safari parks, will be allowed to reopen from Monday 15 June – providing they can ensure social distancing.
The government is reportedly ready to let pub beer gardens in England reopen from 22 June as part of plans drawn up by a group of ministers, dubbed the “Save Summer Six”, who are looking at ways to restart the hospitality industry earlier than initially planned.
The proposals, first reported in the Financial Times, would allow some of the 27,000 pubs that have outdoor space to serve customers for the first time in three months.
Meanwhile Scotland’s tourism minister announced that the tourism sector could reopen from mid-July.
Fergus Ewing said tourism and hospitality businesses should therefore prepare to reopen on 15 July "within appropriate safety guidelines".
Patricia Yates, acting CEO of Visit Britain, told The Guardian that the first surge in visitor numbers are likely to be to ‘safe’ remote coastal and rural areas and that it might take longer for cities to bounce back. They will be looking at promoting areas outside the honeypots. “What is needed is destination management to rebuild tourism more slowly and keep residents, visitors and businesses that depend on tourists happy.”
Italy
Blood tests in Italy’s northern province of Bergamo has shown that around half of the population were infected.
The country is now open to tourists and Raffaele Trombetta – Italy’s ambassador - said that British visitors will be welcome. The country will make sure every precaution will be taken to keep visitors safe with social distancing and other measures such as thermal scanners in place.
In Venice – with an estimated 25 million foreign visitors a year – officials are, according to The Guardian, using the pause to rethink “an entire Venice system”, with sustainability and quality tourism at its core, said Paola Mar, the city’s councillor for tourism. Part of the plan is to lure locals back to live permanently in the city. The mayor is in discussions with universities, aiming to offer tourist rentals to students, and old buildings are being restored for social housing. Measures to control visitor numbers – including a tax on day trippers, which was due to be introduced in July – will go ahead next year, while the debate around cruise ships continues.
“Our goal is to trigger a renaissance of the city,” said Mar. “We want to attract visitors for longer stays and encourage a ‘slower’ type of tourism. Things can’t go back to how they were.”
The Times reports that Italian nightclubs, along with cinemas and bingo halls will open on Monday 15 June, but dancers need to keep two metres apart.
A Times journalist reviewed a short-stay in Rome, as the city prepares to welcome tourists back. The shops and restaurants are open, but social distancing is required as is mask wearing. Matthew Neale said in many ways it is a good time to visit, as the city is much quieter than normal, and prices are cheaper, but visitors will be expected to follow the rules.
Netherlands
The Guardian has reported that in Amsterdam the mayor urged extreme caution in reopening to tourists, while non-profit group Amsterdam&Partners believes the tourist hiatus pushes to the top of the agenda plans to cut numbers and give Amsterdam back to locals.
The city has launched a sustainability taskforce to map the way forward. “We are working with partners to discuss how we can restart in a more sustainable and responsible way,” said Amsterdam&Partners spokeswoman Heleen Jansen. “The main focus is that we want a sustainable visitor economy that doesn’t harm the livability of our city. If you have the right balance between living, working and visiting, you can have the right visitor economy. That’s what went wrong in the last years in the old city centre, and we have to entice locals to discover their city centre again.”
Spain
Germans to beat us to the towels
To make sure the country’s new de-escalation measures are a success, Spain is opening to Germans in mid-June to test the protocols. Around 6,000 German tourists are set to fly to the country this month.
If they are successful, then Spain will open up its borders to foreign tourists from July which may include Britons.
Balearic tourism minister Iago Negueruela said that 4,000 Germans will stay in Mallorca, 1,000 in Menorca and 1,000 will go to Ibiza and Formentera.
Spain’s tourism minister has insisted British tourists will be welcome once restrictions on overseas visitors have been lifted, pending changes to the UK government’s quarantine plans and Foreign Office advice against all-but-essential travel.
Dancing
In contrast to Italy, nightclubs and discos in Spain have now reopened but dancing is banned. An amended order published by the Ministry of Health says any space once allocated for dancing must now be used instead for tables and chairs, provided the two-metre social distancing rule is respected.
However, nightspots in Ibiza and Magaluf have been banned from reopening.
Barcelona
Mateo Asensio of the Barcelona tourist board told The Guardian: “Our first task is getting locals back out into the city, then the domestic market and our neighbours. When the international market returns, we’ll focus more on specific sectors. It’s an opportunity to change the rules.”
With the world’s “new normal” including social distancing, an increased fear of crowds and busy places – and the future of airlines in the balance – over-tourism may not be a pressing issue for some time.
Benidorm
Lisa Griffin, owner of the Shamrock pub in Benidorm was interviewed by The Observer and told that until the tourists come back, hotels open, flights are at capacity and quarantine is lifted in the UK, it won’t be worth our while reopening. “It’s what happens in Britain that really affects Benidorm, because it’s mainly them who visit.”
Beaches forced to close
The Sun reported that four beaches in Majorca - Illetas, Bugambilia, Oratori and Portals Nous - were closed after a high influx of visitors, while Benirras and Cala Calonet in Ibiza were forced to close as well. Local authorities slammed the actions of the party guests, and has since announced plans to ramp up security and police to patrol the beaches. Mayor of Ibiza village Sant Joan, Antoni Marí Marí, has since signed a decree closing the beach for limited periods, warning that further rule breaking could affect Brits returning to Spain.
Bars
The Sun also reports that bars are trying encourage tourists with cheap booze deals this summer with or without Brits. The Hotel Association of Palmanova-Magaluf says it won't allow attempts by "some establishments" to thwart the efforts being made to ban what has become known as "tourism of excesses".
They warn that anyone planning to breach the new rules is not welcome and Magaluf will continue with its aim of attracting the family sector, rather than holidaymakers intent on getting drunk and having wild parties.
They have spoken out after reports that a number of party organisers in the UK are already offering all-inclusive packages for Magaluf, with drinks included for 100 euros a day.
Prado opens
The Daily Telegraph reported that the Prado Museum opened at the weekend with a reduced capacity and is taking the opportunity to assess what reforms can be made to improve the visitor experience.
Turkey
The Daily Mirror reports that Brits could be holidaying in Turkey by the middle of July. It is understood that government officials in popular Brit holiday destinations hope for "air bridge" deals ahead of the summer holiday season.
France
The Eiffel Tower will open on 25 June, The Palace of Versaille opened on 5 June and the Louvre will open on 6 July.
Greece
According to GTP, Greek authorities are re-considering the possibility of introducing new lockdown measures after a series of violations and an increase in Covid-19 incidents over the weekend.
Despite strict warnings and far-reaching coronavirus regulations in place, a beach bar on Mykonos was fined 20,000 euros and shut down for two months days after it organized a party over the three-day holiday weekend, which is not allowed. Similar events were reported at other summer spots across the country.
At the same time, the National Public Health Organization (EODY) announced 97 new Covid-19 cases, 30 of which are travellers from abroad who tested positive and 29 as part of organized screenings in the Xanthi border region. Indicatively, of all Greece’s confirmed coronavirus cases, 690 or 22.6 percent regard travel from abroad.
Separately Athens is accelerating plans for a car-free historic centre.
A Times journalist visited the Athens Riviera, and found that ‘organised’ beaches will be operating at 50% capacity, and hotels have significantly stepped-up hygiene protocols and are offering welcome kits with hand sanitisers and masks and apps for contactless check-ins and dinner bookings.
Clean Airports
Holidaymakers flying from a limited number of British airports will be able to enter Europe without being tested and quarantined under new measures to open up tourism, The Times reported.
A “blacklist” of 13 UK airports has been drawn up by the European Aviation Safety Agency (Easa), an EU organisation, to mark out those in areas with the highest coronavirus infection rates and Greece confirmed last week that it will be using the system. The 13 airports blacklisted included Heathrow, Gatwick, Luton, Stansted, Manchester, Birmingham and Glasgow.
Portugal
A Times journalist visited the Algarve and was impressed at the measures the hotels were going to – Portugal has set some mandatory rules, but hotels are also taking extra measures too.
Austria
Austria will reopen its borders to its European neighbours from Tuesday, with the exception of travellers from Britain, Spain, Portugal and Sweden.
China
China’s recovery continues as daily passengers top 1 million. Chinese carriers have transported more than 1 million passengers in a day for the first time since late January as the country’s market continues to recover from the coronavirus crisis, reports Routes Online.
The number of daily passengers carried by airlines in China topped the 1 million mark on 5 June —the first time in four months the figure has been achieved.
According to figures released by the Civil Aviation Administration of China (CAAC), the total number of passengers flying during the day was 1.04 million. This is the highest total since 28 January when Covid-19 travel restrictions began to be introduced.
China, meanwhile, has dismissed as "ridiculous" a Harvard medical school study that suggested the disease may have been spreading in the city of Wuhan as early as August last year.
USA
President Trump has increased pressure to reopen America by declaring that he will resume political rallies "maybe next week", despite confirmed cases of coronavirus in the country passing two million.
On Thursday, The Guardian reported that the number of confirmed coronavirus infections in the US, which is the worst-affected country worldwide, passed 2 million, according to Johns Hopkins University data, which lists 2,000,464 cases. The country has recorded 112,908 deaths.
The US will be looking at whether effects of relaxed restrictions – and Memorial Day weekend on 25 May - which saw large crowds in parts of the country – will result in a rise in cases.
Nine California counties have reported a spike in new coronavirus cases or hospitalisations.
Russia
Moscow swung abruptly back to life yesterday after the mayor surprised the Russian capital by lifting the vast majority of coronavirus curbs overnight.
Latin America
Panellists on a LATA consumer trends webinar said the UK is now producing more new bookings than cancellations for future travel to Latin America for the first time since the pandemic hit the region, but year on year arrivals in May were down 63% compared to last year.
LATA, which also obtained consumer research of readers of Wanderlust, said it would analyse consumer attitudes and how they have changed towards Latin American travel in light of the pandemic, and identify the traveller profile who is likely to visit the region post-crisis.
It is creating a resource centre giving members access to data and is creating safety guidelines for destinations to open up to tourism safely.
Brazil
The spread of the virus has intensified in the region, with Brazil now recording the second most cases of Covid-19 in the world, after the US, but more daily deaths than any other nation.
Brazil has fully restored its website of coronavirus data following an order by the Supreme Court. The government controversially removed totals of cases and deaths over the weekend.
Mexico
The epidemic in Mexico is advancing toward its peak level of infections, the World Health Organization warned. Mexico, where total confirmed cases exceed 120,000 and the death toll stands at about 14,000, began a gradual re-opening of the economy at the start of June.
India and Pakistan
The BBC has reported that restrictions in India are being lifted despite an increase in cases in an attempt to shore up the economy.
Authorities in Delhi have warned that cases in the Indian capital could reach half a million. If that happens, 80,000 hospital beds will be needed - a huge leap from the current capacity of nearly 9,000. Neighbouring Pakistan, meanwhile, has been urged by the World Health Organization to reimpose intermittent lockdowns.
Jamaica
Jamaica has announced it will reopen its borders for international travellers on 15 June.
The country is currently repatriating 8,000 Jamaican nationals who have been stranded overseas due to Covid-19 related travel restrictions.
Additionally, an extensive set of operational protocols were announced, including health screening before entry, which will be implemented to manage risks to workers, communities and travellers.
Tunisia
On 4 June, Tunisia entered into the third phase of its efforts to lift its coronavirus lockdown. New tourism sector-specific protocols have been developed to allow hotels to reopen, with hotel and travel agency staff in Tunisia are being trained to adopt the new rules.
Now, the country’s national tourist office (TNTO) has issued a new video detailing its plans to restore its tourism economy.
South Africa
Travel Weekly has reported that South Africa is ready to reintroduce tourism from September.
Iran
Iran has seen a rapid surge in the numbers of coronavirus cases in recent weeks, sparking fears it might be facing a second wave of the pandemic.