Attempting to Tip the Scale for the Travel Industry
Government Travel Stipend Proposed to Boost Tourism
The coronavirus pandemic has wreaked havoc on the travel industry. Hotels, air carriers, cruise lines, and other businesses have been shaken to their core. By some estimates, the industry could lose as many as 100 million jobs worldwide as a result of the pandemic.
Industry leaders are struggling to determine a path forward. They anticipate that some people will be hesitant to travel even after restrictions are lifted due to financial concerns and public health worries. Some, including the CEO of Bookings Holdings (BKNG), Glenn Fogel, have suggested that governments could subsidize vacations as a way to boost motivation to travel once a coronavirus treatment or vaccine is found.
Fogel’s company, which operates Booking.com, Kayak, OpenTable, and Priceline, has had to slash jobs and raise $4 billion in debt. Fogel explained that countries can look at travel tax-credits the same way they do for industries like electric cars. If governments can help get the tourism industry back off the ground it might help provide entry-level jobs, get people back into the workforce, and stimulate the global economy.
The EU Agrees, but Travelers May Not
Though countries and borders within the EU are opening, trips to Europe from outside the union’s 27 nations will be restricted to essential travel until at least mid-June. On Wednesday, the EU’s Executive Commission urged a return to “unrestricted free movement” within the bloc with new health precautions in place, like face masks on airplanes and social distancing measures on trains.
This move to reopen borders within Europe is, in part, an attempt to save some business for the tourism industry in anticipation of the summer vacation season. However, despite some borders, hotels, and travel destinations opening up in Europe, many citizens are putting their summer vacation plans on hold.
This hesitation may cause ripple effects as 10% of the EU’s economic output comes from tourism. That number is even higher for some countries that have been particularly hard-hit by coronavirus, like Spain and Italy. Greece and Croatia also depend heavily on tourism, and while they have not been hit as hard by coronavirus, they will still suffer economic losses due to a drop in visitors.
A Shift to Rural Destinations
Even when the travel industry does come back to life, tourists’ preferences may be different than they were pre-coronavirus. People may be hesitant to travel to crowded cities for some time, but the possibility of a vacation to a more rural, open destination could be appealing for some.
In the US and abroad, some travel companies are beginning to notice this trend. A recent Travel Wyoming video explained to viewers, “We’ve all been feeling a little empty. And alone. It’s going to be a while before things get back to normal. But maybe a little more emptiness is what we need.” The suggestion is a nod towards the open spaces of the mountain-west state.
The travel industry, like most industries, will see big changes in the coming months—from face masks on planes to more people potentially opting to vacation in the mountains rather than Manhattan.
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