Life can be cruel sometimes and travel is probably going through its worst nightmare at this time. Travel is an intrinrinsic human need to increase interaction with other people build relationships, see as well as discover new places and that need is not likely to go away even though it may look that way with the challenge the world faces. Discovery, knowledge , adventure and interaction are very important to human race. History bears out the need and hopefully future will not be different. We however though need to manage the present.
Actually managing the present means that as a business we have to survive. Travel encompasses different businesses within its fold ie flights or aviation, railways, road transportation,ground handling,tourism services, hotels, event, conferences and business services. The ground realities of each of these businesses is different and hence the survival strategies too should be different. One can look at these activities in four broad buckets ie Transportation, tourist services, hospitality and the MICE business. There are all closely interrelated and are best when they work together though the investment, carrying value of each of these services or activities may be different. The following are some guideline for survival during this challenging period:
Transportation- Transportation is a key ingredient for travel. Our ability to provide safe as well as secure passage to leisure as well as business destinations is the most important pillar for the travel sector. Presently all forms of travel whether by road,rail, flight, by ship either domestic or international is stalled due to the virtual fear of virus spread through air as well as human interaction. Restarting of these services depend on the threat assessment by Government, social distancing as well as hygiene protocols and fear psychosis in the travellers minds. It could take months or a year plus before such services will be back to normal or maybe a new normal. The biggest sufferers are the aviation companies or the railway owners or the cruise line companies. While the asset owning part will suffer depreciation, the services like maintainance,ticketing, crew services are all people dependant and the key cost will be related to salaries. Key actions here would include looking at maintainance contracts, employee rationalisation, leases,and interest subvention. Many of the services specially flight bookings are already digital and therefore very difficult to get more leeway on costs. Government stimulus should be actively pursued if there is to be chance of reasonable survival. Good news is that the flights trains and road travel though very limited with precautions has commenced.
Tourist Services- Tourist services would include tourist guides, special information services,ground transportation either through taxis or busses, food supply for travel either in trains flights or on highways. This along with other service requirements are largely people dominated and are one of the highest employment generators of informal and formal labour. Action here unfortunately unless there is Government help in form of subsidy, is to rationalise your strength to suit the work for the short period. Flight kitchen services can look to service Govt who could look to outsource meal services for their supervision or medical staff. Such contracts even though lesser paying can look to cover fixed costs.
Hospitality- Hospitality is an asset heavy business and unlike aviation its ownership at least in India largely rests with individual owners. Therefore inability for the asset to earn revenue is very difficult time and catastrophic in case there is a debt overhang not to mention the minimum electricity as well as maintainance activity which needs to be maintained. Good news is that it will begin to come to life along with the transportation modes are activated which is likely to happen. However it would require a new hygiene protocol and wait for the fear of travel to subside which could take some time. Action here is downsize, introduce new hygiene protocols, use kitchen facilities for outside deliveries, orient your focus to domestic business or leisure traveller. With constrained budgets the pricing as well as facilities may have to be rationalised too. With no government help in the offing in India at present, alternate use of property specially as quarantine centres or accommodation for medical staff or for other disaster relief should be considered at least in the short term.
MICE- Meetings, conferences,weddings (big business in india) are likely to be at a halt for some time. It’s probably the last part of travel that will normalise specially with strict rules of gathering of people. Besides the accommodation and transportation cost, the rest of the business is heavily people dependant. Action here is rationalise your people cost and other fixed costs. It’s likely to be a changed business when it opens up again and best to have a fresh look at that time. Smaller and more intimate gatherings may be the rule for sometime.
Travel in all its form may be critical at the moment but history indicates that it has bounced back always. It may take a while,it may come with new ways, it may come with changed economics but the world will not be without travel for long. In the meanwhile ‘SURVIVE’.