LOTUS CORONAVIRUS UPDATE (23.10)

EU TRAFFIC LIGHT SYSTEM

On Tuesday 20 October, the EU approved a ‘traffic light’ system designed to coordinate approaches to travel between member states.

Under the agreement, the European Centre for Disease Prevention and Control will publish a weekly map with each region given a green, amber or red rating based on levels of new cases in the preceding 14 days and the rate of positive tests.

Despite the approval of the system, countries are still able to set their own policies in relation to quarantine and testing, and a number of members abstained from the vote. Ireland was set to make a decision as to whether to implement the system this week.

Travel associations condemned the EU system. IATA joined Airlines for Europe (A4E) and airports association ACI Europe and branded it as “shallow coordination” and “a failure”, warning it “leaves the door open” for states across Europe to continue to act independently on border rules, reported Travel Weekly.

TESTING & AIR CORRIDOR UPDATES

CANARY ISLANDS, MALDIVES, DENMARK AND MYKONOS ARE GO!

Following the assessment of the latest data, Transport Secretary Grant Shapps has put the Canary Islands, the Maldives, Denmark and Mykonos back on the UK travel corridor list in time for last-minute half-term getaways. From 4am on Sunday 25 October, arrivals into the UK from these destinations no longer need to self-isolate. Liechtenstein was the only destination to be taken off the list.

Javier Piñanes, director of the Spanish Tourist Office in the UK welcomed the move, saying it was a move in the right direction for the winter season. For updates, travellers are advised to check the FCDO advice which can be found here.

GLOBAL TASKFORCE

On Monday UK Transport Secretary Grant Shapps revealed that he hopes testing at UK airports for international travellers could be put in place by 1 December. Currently, the UK has a travel corridor list in place, which includes “safe” countries Britons can travel to without facing quarantine on their return to the UK. Countries not on the travel corridor mean that Britons have to quarantine on their return to the UK for 14 days.

Shapps said to the Airlines 2050 conference that the UK would play “a leading role” in developing a globally adopted system.

Current models being considered are:

• A test and release system to shorten quarantine
• A series of tests that involve quarantine before departure and after arrival (this would require some form of common health “passport” to log results).
• No quarantine at all but a series of daily rapid tests

At the first meeting on 15 October, representatives of Airlines UK, BAR-UK, IAG, easyJet, Virgin, the Airport Operators Association, Manchester Airports Group, Heathrow Airport, Eurostar, ABTA and others from the industry took part. However, Shapps said it was up to how fast international agreements could be put in place but potentially trials with the USA would take place and a domestic system could be set up first.

RAPID TESTING AT HEATHROW

However, on Tuesday 20 October, the first rapid pre-departure Covid testing for passengers started at Heathrow.

The one-hour test enables travellers access to countries where a negative result for the virus is needed to avoid a period of quarantine.

It will initially only be available for passengers going to Hong Kong and Italy, which allow quick pre-flight tests as evidence that travellers are Covid-free.

Tests have to be booked in advance at a cost of £80 with a result available in 20 minutes.

The rapid saliva swab, available at Heathrow Terminals 2 and 5, is known as a Lamp (Loop-mediated Isothermal Amplification) test. British Airways, Virgin Atlantic and Cathay Pacific will offer it to customers. A Lamp test is quicker than the PCR test, which is widely used in the NHS, because the sample does not need to be sent to a laboratory, and is slightly less sensitive.

Tim Alderslade, CEO for Airlines UK expressed hopes that prices will come down and that an ideal scenario would be global alignments on testing pre-departure.

COMMONPASS – HEALTH PASSPORT TRIALLED ON HEATHROW TO NEWARK ROUTE

As outlined by the Global Taskforce, a new ‘health passport’ was used on flights from Heathrow to Newark in the US for the first time on Wednesday 21 October under plans for a common international standard for virus-safe travel and was hailed as a success. The digital document is part of a trial programme under which passengers will take a test at Heathrow up to 72 hours before travelling, and complete health questionnaires required by US border authorities. Results will be logged on a smartphone app that can be scanned by airline staff and border officials. The system is designed to create a global framework.

FRANCE

France has announced that it will offer rapid Covid tests at its airports for passengers heading to the United States and Italy and for passengers arriving in France from countries in the red zone, as designated by the new EU traffic light system.

DESTINATION UPDATES

WALES

First Minister Mark Drakeford has announced that Wales will go into a national lockdown from Friday 23 October until Monday 9 November. Welsh travel agents expressed disappointment but welcomed news of financial aid. The 'fire break' will dash any Welsh holiday plans as travel is banned and hotels are closed, explains The Express. "Travel is limited to essential travel only," explained the Welsh Government website. gov.wales. "Travelling into Wales for a holiday is not one of the permitted reasons under the Regulations."

SCOTLAND

The Scottish First Minister Nicola Sturgeon extended closures of pubs and restaurants in Scotland’s central belt until 2 November, which includes the most densely populated areas in Scotland and takes in the key cities of Edinburgh and Glasgow.

ENGLAND

Following contracted and unresolved negotiations, Boris Johnson imposed ‘Tier 3’ restrictions on Greater Manchester on Tuesday 20 October. On Wednesday 21 October, the UK Government announced that South Yorkshire will face Tier 3 Covid rules from Saturday, whereas on Thursday it was announced that Stoke-on-Trent, Coventry, and Slough will enter Tier 2 restrictions from the weekend.

EUROPE ROUND-UP

Across Europe, a number of nations have strengthened their approach in response to the apparent threat of a second wave as coronavirus infections rise.

IRELAND

The Irish government has re-introduced the highest level of restrictions, while keeping schools, construction and manufacturing open across the Republic from Wednesday 21 October to 1 December.

The ‘Level 5’ measures include the imposition of a 5km travel limit – and a ban on non-essential travel outside the country. The travel restrictions had already been among the severest in Europe and no other countries had been on its ‘green list’ when these new measures were introduced.

Until a vaccine is reached, the Taoiseach (Irish PM) Micheál Martin told the Irish people that he expected a rolling cycle of public health restrictions to be tightened and loosened.

FRANCE, ITALY & GERMANY

Paris and large cities in France are under a curfew from 9pm to 6am from 17 October for at least a month. Cities in Italy are now also subjected to a 9pm curfew and restricted group sizes. Citizens in Germany have been encouraged to stay at home wherever possible and the Spanish government is considering introducing a night-time curfew across the whole of the country, in a bid to bring down coronavirus infections. However, this is unlikely to go ahead unless there is agreement from Spain’s regional governments. The Madrid regional government signalled that it is open to a curfew for the region, which has been particularly badly hit by the second wave of Covid-19.

SWEDEN

Sweden has taken its first step towards regional lockdowns by bringing in tougher rules for the small city of Uppsala, hours after revealing plans to ease restrictions for the elderly, and follow the approval of a legal framework for local restrictions to be imposed.

DUBAI

The pandemic has thrown Dubai’s growth into reverse, reports The Economist. Travel and tourism, for example, have collapsed and Dubai’s airport has mothballed one of its two main terminals. Passenger traffic was down 20% in the first quarter—before most countries went into lockdown—and further still in the second. Hotel occupancy rates in September, normally more than 80%, were 45%. Emirates, the official air carrier, has laid off more than 10% of its workforce. In a bid to grow its population and boost the economy, the Emirate announced a new residence visa for over-55s in September. Applicants must prove solvency or buy a property.

CHINA

China’s latest GDP figures released on 19 October show that the economy grew by 4.9% in Q3, compared with a year earlier, reports The Economist, completing the upward leg of a V-shaped rebound. China, says the report, got one crucial thing right: by almost stamping out the virus, it was able to allow activity to resume with few restrictions. Schools are fully open, factories are humming and restaurants are buzzing.

Skift reported that Marriott Chief Executive revealed that China is the market that continues to lead recovery, which is now only down 20% on 2019 levels, and that new initiatives such as Homes & Villas and ‘work from a hotel’ campaign is also aiding recovery. He reported that business is down 65% globally but that’s up from a 90 percent decline seen during the worst of the pandemic.

THAILAND

The first group of tourists to visit Thailand since the coronavirus pandemic was declared in March touched down in Bangkok this week. It marks the start of what is hoped to be a gradual restart to the country's vital tourism industry, with more than 400 visitors expected to arrive in the coming weeks.

However, the visitors will be subject to strict rules and regulations: all must have a valid Special Tourism Visa, enter a 14-day quarantine in an ASQ (Alternative State Quarantine) hotel, agree to multiple heath checks, and stay for a minimum of 30 days.

LATIN AMERICA

The virtual Latin America Travel Association’s Expo 2020 revealed a number of travel trends with data from ForwardKeys showing that:

• Weekly tickets for future international travel to key destinations are on the rise. Mexico was at around 15% of 2019 volumes in May 2020 but volumes rose to around 50% for September, outperforming all other countries in the region.
• The top searched destinations from the UK are Brazil, Mexico, Colombia, Costa Rica and Argentina. The most popular flight route searches were London–Cancun, London-Sao Paulo and London–Mexico.
• There is a gradual increase in flight capacity following the reopening of key destinations.
• Fares to Latin America have dropped by between 16% and 30% from key source markets.

REFUNDS

The CAA has confirmed that ATOL holders can continue to issue refund credit notes (RCNs) with ATOL-financial protection up to the end of the year, reports Travel Weekly.

SECTOR SPECIFIC SUPPORT

The TSSA, the union for transport and travel, has backed an Early Day Motion in Parliament calling for sector-specific support and a Minister for Travel, reports TTG.

Early day motions (EDMs) are motions submitted for debate in the House of Commons for which no day has been fixed. The EDM was submitted as EY disclosed data that the travel and leisure sector issued more profit warnings than any other FTSE sector in 2020.

AVIATION HEADLINES

IATA

A report by IATA indicating extremely low levels of Covid-19 in-flight infections has been challenged by one of the authors, Travelmole reports. “IATA's risk calculation was too simplistic and potentially misleading,” he said.

AIRPORT LOSSES

UK airports are losing £83m a week as a result of the coronavirus crisis, according to the Airport Operators Association.

AIR TRAFFIC FORECASTS REVISED

Europe’s air traffic will remain 60% down on 2019 at the end this year says pan-European aviation organisation Eurocontrol, which has revised down air traffic forecasts, reports Travel Weekly.

FLYBE

Airline Flybe could return to operations next year after being sold by administrators EY to former shareholder Thyme Opco for an undisclosed sum. The carrier was the first major corporate casualty of the coronavirus crisis in the UK back in March.

RYANAIR

Ryanair is to close its bases at Shannon and Cork Airports for the winter and will operate fewer routes using staff based outside of Ireland. The airline will also put on extra flights during half term to Crete.

CATHAY PACIFIC

Cathay Pacific is to close its Cathay Dragon subsidiary immediately and axe 8,500 positions despite a £3.9 billion bailout from the Hong Kong government in June, reports Travelmole.

IAG

In an unscheduled trading update, BA owner IAG reported 1.3 billion euros loss in the third quarter and an 83% fall in revenues year on year between July and September. BA will also reduce its flight capacity for its fourth quarter to 30 per cent of 2019 levels because of new lockdown and quarantine measures across Europe and testing had not been adopted as quickly as anticipated.

CORPORATE BUSINESS TRAVEL UPDATE

New Japanese low-cost carrier Zipair, a subsidiary of Japan Airlines, is taking to the skies on Friday with a new “basic” business class product, essentially a full-flat seat. Skift questions whether it is a new trend for airlines as Emirates launched an H fare earlier in the year - a business-class ticket without perks.

A report in The Sunday Times about the challenges that face the new British Airways boss Sean Doyle, analysed future solutions to a fall in corporate travel. Key points were:

• The $4 trillion (£1.1 trillion) business travel market “will never go back to where it was,” said Tom Otley, editor of Business Traveller magazine.
• Aviation analysts Ctaira say 96% of frequent flyers in Europe and the US will travel either “much less” or “slightly less” for business, even after a Covid-19 vaccine arrives.
• Business travellers account for only 1 in 10 of British Airways’ passengers, but generate more than half its revenues and 75% of profits.
• London to New York is the most lucrative route for BA – and is compared to any airline anywhere.
• BA was partway through an investment programme, which would have seen with facilities and aircraft being upgraded for business travellers.
• Consultant John Strickland says BA could shrink business class cabins; increase premium economy seats; look for new leisure routes; cut business class fares.
• Virgin Atlantic is building its VFR (Visiting Friends and Relatives) market with routes from Manchester to Pakistan.
• Qatar stopped selling First Class tickets and Airbus 380s are grounded. Mergers between Etihad and Emirates are touted.
• Few believe Heathrow’s third runway will be built and Dubai has halted new World Central five runway hub.
• Airports need to recalibrate food and drink at airports with travellers spending less.
• The pandemic has also impacted business travel hotels. Surinder Arora who has 16 hotels that mainly cater for business travellers reports that only half his hotels are open “and those that are at 20%-25% occupancy.”

Substantiating the above speculation, This is Money reported that British Airways is to scale back operations at Gatwick. The carrier will operate fewer flights from the airport post-pandemic and will shift business to Heathrow. BA will counter the drop in business travel by increasing premium leisure flights to long-haul holiday destinations. It has cancelled all short-haul flights from Gatwick until March, leaving it with 12 long-haul routes at the airport.

An opinion piece in The Times opines the decline of the business trip. Sathnam Sanghera laments videoconferencing as dispiriting; that work travel makes you appreciate home and reduces the opportunities for leisure. The leisure industry depends on ‘bleisure’ and is dependent on business travel to pull out of this pandemic swiftly, he says. This follows a report from Skift that the TATA chairman said that while he used to fly from India to the USA to pitch $50,000 projects, he has closed billions of dollars worth of deals over ‘five or six zoom calls.

TOUR OPERATOR & TRAVEL AGENT UPDATES

KUONI

Kuoni has launched of a new peace of mind promise, allowing holidays to be cancelled or changed up to 10 days before travel "for any reason at all", reports TTG.

SANTA TRIPS TO LAPLAND

Hotelplan has cancelled trips to Santa’s Lapland in December 2020 and TUI is reviewing its programme to take children to visit Santa in the Arctic.

ABERCROMBIE & KENT

Co-chairman Geoffrey Kent from Abercrombie & Kent revealed that the company was on the look out to buy firms in 2021. Meanwhile CEO Kerry Golds said that confidence for bookings looked good for Q2 in 2021 and that there had been a spike in bookings for 2022.

SAGA

Saga has announced a new range of specialist interest holidays for 2021 including birdwatching, archaeology, wildlife and walking tours.

COMPANIES CEASE TRADING

Agency chain Toucan Travel, Number One Travel and South American tour operator specialist Independent Traveller have ceased trading, reports TTG.

Accounting firm BDO held a panel debate at ABTA’s Virtual convention on mergers and acquisitions as the industry readies itself for consolidation. Speakers said firms should look to partner with companies with good business models with a good record of customer care.

TRAVEL INDUSTRY SHOULD REFLECT ON ITS APPROACH

Tim Williamson, former head of marketing at TUI and a director of Responsible Travel, has criticised the travel industry’s approach to the pandemic in damaging consumer trust; for not making more use of the Government’s loan schemes; weak business models; for not working more closely with the Department of Transport, and for not presenting a united, positive front to save the travel industry. “It’s right to speak out on [quarantine measures that are a blunt tool] while remembering the government focus is public health and not getting people travelling as quickly and widely as possible…I hope, from all of this, we reflect on our approach to the pandemic, better understand how we’re viewed and why, and learn to speak as one.”

ECONOMIC OUTLOOK HEADLINES

UK

• The Chancellor Rishi Sunak will provide emergency support to struggling hospitality businesses in areas of high coronavirus alert, reports The Financial Times
• The UK’s borrowing reached record levels in the first half of the year and the pace of borrowing in the second half will be higher than predicted. GDP is expected to be flat as tax revenue also falls.
• UK small businesses continued to grow in September amid a boost in consumer spending and an active housing market, according to the NatWest UK Small Business PMI survey.
• Small firms in the leisure and hospitality sectors saw a slowdown in activity in September.
• Large advertisers continued to cut spending in the third quarter.

EUROPE

The European economy is dropping into a double-dip recession, as economists warn that rising coronavirus infections and new government restrictions on movement are likely to cut short the continent’s recovery. Germany, France, Spain, Italy, the UK and the Netherlands have all announced new measures to contain the second wave. While third quarter figures are expected to show eurozone growth, a rising number of economists are now cutting their forecasts for the fourth quarter.

BREXIT: POUND SURGE

Despite the UK Prime Minister Boris Johnson declaring last week that “the trade talks are over” – negotiations have intensified this week and LondonLovesBusiness reported a surge in the pound against the Euro on Wednesday as the EU’s chief Brexit negotiator Michel Barnier commented that a deal with the UK could be within reach.

TRENDS

THE HALF-TOURIST / WORKATIONS

Pre-pandemic, the remote worker was seen to be a young hipster with a Mac, but from April a whole new cohort started to work from home, says The Guardian.

Destinations hit by the global halt in travel have already started to target nomadic workers to make up for the loss of tourist income, including Barbados, Aruba, Anguilla, Georgia, Croatia, Palma and Estonia. Travel companies are also courting the digital nomad and are offering longer stays away, with even all-inclusive resort company Sandals and Beaches reporting that clients in 2020 are staying 16% longer than in the previous two years. TUI Netherlands is also trialling a concept offering employees the opportunity to work and holiday with employees by travelling to the Algarve to test the facilities. A HolidayPirates Instagram poll revealed that 68% would prefer to work from a paradise island compared to 32% from a log-cabin.

VIRTUAL EVENTS

Virtual events are booming, reports Skift. Real life events have not yet returned, but in the meantime companies such as Zoom, Hopin and EventB have helped companies fill the gap.

Stats for Zoom include:

• 100,000 users added last quarter
• $186 million in profit for the quarter ending 31 July compared to $5.5 million for the same period last year
• 600% rise in stock values this year

SUPER TRENDS FROM TTG LUXURY SUMMIT

Health

High Net Worth Individuals (HNWI) look after themselves and high-end restaurants have embraced vegetarian and vegan menus; drinks brands have produced high quality non-alcoholic spirits and luxury gym spaces have evolved. In travel, mainstream brands are putting wellness at the heart of the experience (as in Aman’s new brand Janu) rather than just have a spa attached to the hotel.

The pandemic has made the wealthy think they’ve been right to look after themselves – more exercise, supplements, mindfulness etc. Private jets have increased in use. Trust has become more of an issue so they need to know the brand they stay with will look after them and their staff. Health retreats are important but having fun is too.

Responsibility

The wealthy are appalled by mass consumption. Buying luxury should be an investment and products should maintain or gain in value. The wealthy are embracing what luxury tourism brands are doing in terms of community and conservation, valuing sustainable tourism.

Casualisation

HNWI are now happier in a less formal environment. In hospitality, no compromise on quality or price but cas-lux has taken over.

Authentic exclusivity

Consumers don’t just want the best, they want the rarest.

In addition, ski customers are switching January bookings to mid-December to quarantine over Christmas as there won’t be big get togethers.

CONSUMER SENTIMENT

Ski Club of Great Britain says 9 out of 10 skiers still intend to go skiing but only 29% are confident it will happen.

The Daily Telegraph has reported that some British travellers are still visiting red-list destinations despite quarantine requirements and that adults with no dependents who work from home, are not finding it difficult to quarantine when they come back. Indeed, London City will see the return of flights to Zurich and Emirates reports that the most popular routes are Dubai, Maldives and Mauritius.

FINNAIR LAUNCHES READY MEALS

From reindeer meatballs to Arctic char, shoppers in Finland will soon once again be able to get a taste of travel as Finnair, Finland's national airline, will start selling ready-to-eat business class airplane food in supermarkets in the hopes of keeping kitchen staff employed during the global coronavirus crisis and cater to people's travel nostalgia.

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