According to a recent study by the global tourism industry research company Phocuswright, travel will recover from the impact of the coronavirus (COVID-19) crisis before 2025. However, the expert’s predictions seem like the understatement of the century for others. We may need to escape the Matrix the way Neo did.
Speaking before the participants of the virtual 4th International Hospitality Forum, held by the Hellenic Chamber of Hotels on Monday, Phocuswright Senior Market Analyst Peter O’Connor discussed how the new COVID-19 vaccines would open the door for a slow recovery in travel should begin in 2021. O’Conner was quoted by GTP saying:
“It will take a significant amount of time for a vaccine to roll out to cover the majority of the population, even here in Europe… We do not expect a full recovery, to those lofty 2019 levels, before 2025.”
The Phocuswright expert expressed high hopes for hoteliers in Greece, Spain, and Italy, saying demand for these markets would slope up quickly. However, other experts do not agree. Richard Lowe, at IPE Real Assets, points out that “by the middle of 2020, the average airline had enough cash to survive for less than nine months.” He also cautions that hotels unable to service debt could fall prey to opportunistic takeover. In his report, the shift from investor focus on hospitality and travel profits to acquiring real estate is meaningful.
Also, the President of the Instituto Tecnológico Hotelero (ITH) and the Tourism Board, Juan Molas reported recently that only 8% of Spanish hotels are open now, and that more than 100,000 bars closed, while as many as 270,000 have disappeared. In addition, he says some 5,400 travel agencies out of a total of 9,000 are no longer in business. So, while Spain may appear as a growth market to Phocuswright, a lot has to happen and happen fast for 2021 to even begin to resemble profitable. This says nothing for sustainability.
Before there can be a recovery of tourism, there has to be a demand beyond industry positive thinking. What I mean can be summed up in a simple question; “Just who do these experts think will be able and willing to travel in 2021 and beyond?” The supply is going to be down because hotels and cafes will be boarded up, and the demand will not be there because unemployed people cannot afford week long vacations in Greece.
A report from The Guardian will suffice here. According to Bank of England policymaker Michael Saunders:
“Britain faces the risk of a significant rise in unemployment, higher corporate debt, and depleted household savings, particularly among poorer families.”
Unless UK travelers to the Aegean or Ibiza plan on getting the government to let them use additional COVID mental health funding help to fly on Spring vacations, most people on those stormy isles are going to sit home in the rain instead of sunning themselves at Balos Lagoon or at Malia here on Crete. Yesterday, the United State recorded a new record of 192,000 new COVID-19 cases, so unless 300 plus millions are vaccinated in the next few months, I guess only a trickle of Americans will be flying to Venice or Rome.
Millions of people have lost their jobs. A huge portion of those were left high dry by companies that no longer exist. In the U.S. thousands are in line at food banks to keep from starving. Financial Times reports that the job market in Europe is hanging on by a thread and that opportunities have plummeted since the beginning of the pandemic. Spain has been devastated. Daniel Albarracín, reporting for the Committee for the Abolition of Illegitimate Debt writes:
“This crisis, deepened by the pandemic, occurs in a context where we could already see symptoms of exhaustion of the brief and fragile capitalist economic cycle…”
Amid suggestions that Brussels authorities can only rescue the EU bloc with a “historic” stimulus plan, travel experts and big hotel owners seem be living in a bubble. And their obtuse optimism does not even take in the damage this pandemic is doing to the public spirit. It’s as if business leaders think what they wish for is going to happen. German road builders are going to rush to TUI during this lockdown to book cheap trips to Mallorca or Greece in a frenzy. Yeah, right.
My best guess as to the recovery of tourism is that the industries associated will never be the same again. Unless these businesses are able to shift focus quickly, when a reasonable demand does happen again, even those strong enough to survive the current meltdown may be in trouble.
Finally, on the livestream of the Hospitality Forum event, Greece’s Minister Theoharis said that “Greece’s decision to ‘open’ its tourism market this past summer, in the midst of the pandemic, showed results and led to a huge success story.” Theoharis’ comments reveal the overall obtuseness of today’s hospitality narrative – it’s as if everything has turned into a giant corporation. The minister talks about “walking into the light” made me think of outgoing US President Trump and his photo op with the bible.
No one need focus totally on the darkness, as Theoharis implied when giving his speel to the hoteliers and marketers present in the teleconference. But creating an unreal reality will not bring all those workers back, let alone the guests they serve. Predicting pie in the sky revenues to come, and a return to things the way they were, run contrary to narratives the politicians and resort owners favor. To wit, a sustainable travel industry will look very different from what we’re used to. And this, is the only positive aspect of the coronavirus pandemic.
And a final note on Theoharis’ so-called “bulletproof” evidence that tourists did not bring COVID-19 into Greece, I would greatly appreciate someone revealing evidence without the stamp of the current Greek government on it. If Mr. Smith from the Matrix movie were a travel expert, Neo would have needed all his powers to stop the bullets from riddling his body. Ironically, the participants in the live stream appeared almost as white-skinned as the hackers in the Keanu Reaves film.
Now, these bean counters have yet another 10-year plan for Greece. I guess it’s a modification of the old 10-year plan announced back in July by Prime Minister Mitsotakis? Or perhaps, this plan is like the 2021-2030 plan Theoharis announced back in 2019?
If ever PR fluff were to become evidence of mediocrity, just make sure you DON’T follow the white rabbit down the wrong tourism hole.