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The Impact of COVID-19 on The Travel & Hospitality Industry

We’ve been warned: According to the World Travel and Tourism Council, the COVID-19 pandemic could cut 50 million jobs globally in the travel and tourism industry. The virus is hitting organizations hard from all over the world. They face a complicated year ahead – if the WTTC is right, it will take up to 10 months for the sector to return to its normal levels.

“In certain markets, the situation will get worse before it gets better,” said Amir Amidi, Managing Partner at Plug and Play Travel, “and there is an opportunity for the industry to come together to subside public panic and help each other to recover”.

In particular, for China, during the first half of March, domestic travel has bounced back by as much as 100% from the bottom formed back in February and continues to rise. However, for the US, EU and much of APAC, average flight load and hotel occupancy are expected to hit single digits in the month ahead. “We are hopeful that the U.S. will be able to “flatten the curve” of the pandemic by early May, which would restore tremendous confidence and boost capabilities of rapid recovery within the travel industry,” said Lio Chen, Managing Director at Plug and Play Travel,  “Nonetheless, how the pandemic evolves in the next 4-6 weeks would carry a profound effect on the travel industry and beyond.”

The Situation In Each Sector

The pandemic is affecting the industry as a whole, but each sector has its specifics. We have summarized some relevant insights from each of them.

How The COVID-19 Outbreak is Affecting Aviation

  • According to IATA, annual loss is expected to be $113-252 billion for the airline industry.
  • What that means to the industry’s annual revenue projection is that it went from a 4% increase to 13-30% YoY decrease (vs $838 billion in 2019)
  • Total profit in 2019 was $26 billion or 3.1% of total revenue, which suggests even IATA’s “best-case scenario” for 2020 would not be bearable by airlines.

 How The COVID-19 Outbreak is Affecting Tours and Activities

  • According to Arival, the whole sector is valued at $254 billion for 2019, consisting of 1 million operators.
  • 86% of operators generated less than $250K in sales in 2019, which implies small businesses could be hit the hardest.
  • Based on last week’s survey, 28% of operators are at risk of closing business within the next 3 months or 46% within 6 months.
  • Average YoY decline in bookings is about 52%, partially due to a 37% cancellation of total 2020 bookings.

How The COVID-19 Outbreak is Affecting Hotels

  • Right now, none of the global brands are ready to give guidance. Trip.com Group is the only OTA that has issued some sort of guidance. They expect lodging businesses to decline 60-65% for Q1 YoY.
  • According to STR, the US occupancy level is still held above 50% for the second week in March but is expected to follow the trend line set by China and Italy.
  • In other words, US occupancy could drop sharply below 10% before bouncing back and is tracing about 8 weeks behind China and Italy.
  • China’s occupancy grew from 9% to 18% during the first two weeks in March. In terms of on-the-books, during the same period, Trip.Com Group reported a 20x increase in prepaid hotel bookings.

Startups That Can Help Organizations

The Ventures team at Plug and Play have highlighted a handful of startups that can help corporations within the Travel and Tourism industry endure this situation.

“Unfortunately, many startups will not survive the impact of Covid-19. We’re already seeing tons of layoffs and startups having to switch their full-time employees to part-time,” said Kristi Choi, Ventures Associate at Plug and Play Travel, “Startups that already had a short runway before the crisis will be hit at an accelerated rate.  At the same time, we’ve seen an impressive number of startups quickly pivot or develop additional solutions for Covid-19 applications in the areas of prevention, detection, disruption management, and operational efficiency, which has showcased the agility of these founders.”

RubiQ

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RubiQ is a Tel-Aviv based startup that helps airlines reduce significant overload on call centers and streamline passengers’ rebooking and refund processes. In the current situation, process automation is key.

RubiQ offers Aircules, a white label AI-powered mobile solution which keeps the passengers updated, and allows them to rebook from personalized alternatives.

Bespoke

travel-startups-covid-19-bespoke

Bespoke is helping the Japanese government to effectively communicate with travelers in Japan in multiple languages as a means to combat the pandemic. They do it with Bebot, one of their products, that they describe as an “AI concierge”.

With Bespoke, Japanese residents and travelers can ask the chatbot different questions about their health or the virus (such as symptoms, treatment or preventive measures).

Face++

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Face++ is a Chinese company which empowers infrared cameras with computer vision technologies for rapid deployment at airports and subway stations in China to detect and track individuals with fever. This allows staff to complete all body temperature screenings without close physical contact, thus reducing the chances of contagion.

Paanini

travel-startups-covid-19-paanini

Gartner predicts that by 2024 “organizations will lower operational costs by 30% by combining hyper-automation technologies with redesigned operational processes”. This fact, combined with the current situation, will push organizations to cut costs, and automation is one of the best ways to do that.

Paanini has developed a solution called JiffyRPA, that combines enterprise-grade RPA with intelligent data capture, advanced analytics and artificial intelligence to deliver measurable impact on productivity, efficiency and profitability for global enterprises.

JiffyRPA’s intelligent automation capabilities can convert unstructured, semi-structured and hand-written data into structured data before automating corresponding processes. This way unstructured data becomes structured making it clean and usable for automation of various related processes.

Automation Hero

travel-startups-covid-19-automation-hero

Automation Hero combines Robotic Process Automation (RPA) with AI to form an intelligent process automation (IPA) platform. By automating repetitive and time-consuming tasks, Automation Hero improves productivity and drives more successful outcomes.

The platform of this San Francisco-based startup is personified by Robin, a virtual personal assistant, to create an approachable integration between AI and humans.

Sitata

travel-startups-covid-19-sitata

Sitata is another company working in disruption management. They offer a mobile-based platform that provides travelers with pre-trip health and safety advice, real-time monitoring of travel disruptions, and automated safety check-ins with real-time assistance.

With the COVID-19 outbreak, airlines are learning a lot about how to better manage trip disruptions, and startups such as Sitata can help them improve their service.

 

Conclusion

For countries like the U.S. and China, domestic travel will play a huge role during the recovery phase. “It is important for airlines, hotels, and tour operators to capture such a shift early on, with clear operations and marketing strategies, in response to such trends.” said Lio Chen. “This is likely viewed as a favorable condition by low-cost carriers rather than legacy carriers with a lot of wide-body aircrafts and an expansive global network of flight routes. Separately, we are worried that many in-destination tour operators may not be able to survive and will be forced to close their business due to cash flow issues that harm SMEs more so than large corps.”

“Innovation must continue,” states Chen, “but the underlying strategies should be adjusted, which Plug and Play can help in redefining. Large corporations must resist the temptation of cutting the entire innovation budget but choose to invest their resources much more strategically. Partners in our ecosystem should put less focus on frontier tech that is at least 3-5 years out. On the other hand, in terms of technologies that impact their core business, our partners should prioritize safety and confidence over other aspects of a seamless journey. We also hope that the ongoing crisis will serve as a wakeup call for the travel industry to work together on open data initiatives during the aftermath. After all, in order for travelers to learn and avoid potential risks of being in close contact with someone infected, airlines, airports and hotels must break all the data silos and work together with more companies.“

 

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Customer Reviews

Ngoni Safaris Uganda

Customer Reviews

Justo Nov 18, 2019

Safaribookings
I went on an 11 day safari visiting Kampala, Jinja, Lake Mburo NP, Bwindi NP, Queen Elizabeth NP and Kibale NP. Communications with Ngoni were prompt and easy from the start. As soon as I made my booking, Sedrick contacted me through WhatsApp and guided me through the rest of the process. Leading up to the tour he made sure I was well-prepared to begin. He was always very clear and friendly. Service was exceptional. I had the pleasure of going on this safari with three members of Ngoni's staff - Sedrick, Nelson and Joel. These guys made my comfort their priority from the moment we met. Whether it was checking if I was okay with the accommodations or making sure I always had a bottle of water, I always felt like I was being well taken care of. Nelson is an excellent guide. His knowledge about the flora and fauna of Uganda was extensive, always able to answer any questions I had and was eager to teach - it's obvious that he has a great love for his country and it's environment and is eager to share this love with his clients. My experience with Ngoni and Uganda surpassed all expectations I had. Absolutely amazing, and thanks to the guys at Ngoni it feels like a new home - can't wait to come back and visit. Webale, brothers!

Stephany Aug 13, 2019

https://www.safaribookings.com/operator/t17733
Sedrick was unique and stood out from the rest in the high quality communication he provided since the first inquiry. He called me to provide information about the itinerary and see if I had any questions even before booking the tour. We communicated through WhatsApp for any other questions that came to mind after that call. After picking me up from the airport, he and Pilot (additional tour guide) provided plenty of information about the country to give me some context and we started our long drive to the impenetrable forest. The food was delicious with many options; the accommodation was very clean with exceptional service; and the transportation from Entebbe to Bwindi park was very comfortable (although long). As a solo female traveler, both tour guides (Sedrick and Pilot) did an exceptional job at enduring I accomplished everything intended to in Uganda, and always made me feel safe. I highly recommend to book your safari with this company because the quality and professionalism will not let you down.

Shakira Dec 14, 2018

Ngoni safaris uganda is the best tour operator in Uganda. A few weeks back we traveled to Bwindi impenetrable with sedrick to explore the beauty that is Uganda. This company took care of us . with most comfortable car , Great guide .We highly recommend it to the next travelers

Winnie Dec 19, 2018

https://www.safaribookings.com/operator/t17733
I was going on a gorilla safari with my friend and this was going to be the first ever safari for the both of us. Luckily, the communication with the office was super easy and we got answers to all of the questions we needed. The driver / guide (Sedrick) was very professional and funny and made our time very pleasant. Also, he had a proper knowledge of the local area close to the Mgahinga national park and he promptly spoke some 7 languages which we thought was super positive. The safari was surely the highlight of out East African trip!

Ritah Jan 2, 2019

https://www.safaribookings.com/operator/t17733
My Team and I did a five day trip, including Ziwa Rhino Sanctuary, Murchison Falls and Kidepo. It was truly an incredible experience. Our guide, Sedrick, was knowledgeable, skilled in driving in some challenging settings and just plain fun to hang out with for five days. The lodging was perfect, especially Savannah Lodge. The tents and beds were high quality. The views were spectacular. Meals were delicious and varied. I recommend Ngoni safaris Uganda with all my heart and soul!

Pilot May 28, 2019

https://www.safaribookings.com/operator/t17733
Our six days trip was amazing. The driver/guide had an incredible knowledge of animal and bird-life and are so interesting to talk to. His driving skills through lashing rain and massive puddles was admirable! The cooks managed to produce varied and delicious meals from the kitchen, which we ate both at accommodation or roadside when we were travelling from one place to another . At all times we felt safe and well-looked after. All in all, an incredible experience, due not only to the abundance of wildlife we were lucky enough to see, but also to the great efforts put to have our Safari a better one . The safari was full of fun. Traveling with ngoni safaris is my life time memorable experience and I highly recommend it to travellers who would love to visit uganda or EastAfrica for holidays, vacations or Adventure.. Even five stars are too small .