Today’s Traveller: How do you assess the current situation?

Ajay Bakaya: The impact of the second wave of COVID-19 has made the situation worse. Most of the states are under lockdowns for the last few weeks. The situation once again has become ambiguous and the Hospitality industry faces another challenge of uncertainty across states.

The severity of COVID-19 is far more this time compare to last year. We have witnessed many lives lost and therefore people are hesitant to go out and travel, which may make recovery slower.  Travel bubble between the countries and even inter-state travel is impacted.

Seeing the current situation and once complete unlock happens, we believe 2021 will again be the year of domestic and road travel. Concepts of remote working, staycations, workcations will remain in vogue.  Travellers’ choice of hotels will revolve around hygiene, cleanliness, safety. Trust in being safe will play a reassuring role.

Today’s Traveller: Were you prepared for a second Covid wave scenario and the likelihood of a further setback?

Ajay Bakaya: The starting of 2021 looked promising and encouraging as few countries opened borders; there was news of vaccination; travel was again coming to normal. Then came the outbreak of the second wave. Like thunder. Unexpected. It made things difficult and even more challenging. Again we hit the PAUSE phase.

Therefore, taking learnings from the previous year, we immediately switched our business gear and planned things according to the situation. The key was to monitor and analyze changing mindsets and emerging habits and adapt rapidly. One such case was creating a Covid care center for elderly people.

We tied up with an organization that takes care of Elderly people and created a Covid Care center dedicated to Elderly people. We rolled out self-isolation packages. Understanding the severity of the second wave, we curated the ‘GHAR KA KHANA’ food delivery service.  Nutritious, home-like food at an affordable price point. We also tied up with Hospitals for a Post Covid care facility.

Today’s Traveller: What new challenges are likely to take shape?

Ajay Bakaya: Currently business planning and strategizing have become completely pandemic dependent. Given the fatality rates and fear of a third wave, things will be unpredictable this year. Business movement has taken a hit with lockdowns. Social functions including weddings had seen a comeback, but families are deeply affected due to deaths and such events may get delayed. No one is in a position to accurately predict what could happen one year from now. People are hesitant to travel for leisure. This is the current state of the industry as a whole.

Domestic and international markets are differently impacted and it’s very uncertain when borders will open for travellers. We can see local, national and international travel will re-open as and when the restriction eases for respective markets.

Today’s Traveller: The way forward with strategies to rebuild the travel and hospitality industry.

Ajay Bakaya: The strategy right now is to cut costs, examine and adjust every operating cost. Expenditure and revenue planning on a daily and/ or a weekly basis must be established in order to closely manage the operational and financial risks during times of uncertainty.  

Hotels must be geared for frequent peaks and troughs at no notice. And must plan accordingly. Even weddings with limited numbers will happen at very short notice.  We are focusing on the smaller wedding segment. Corporate travel will take slightly longer. For the foreign segment, we expect the last quarter of 2022 will see significant movement.

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The effects of the corona pandemic are shaping German tourism longer than previously assumed. This is the conclusion reached by the update of the study by Tourism Economics, commissioned by the German National Tourist Board (GNTB), which analyses the impact of the pandemic on Germany’s 19 most important source markets.

At the beginning of June, analysts were still forecasting a year-on-year decline of 46.2 million in international overnight stays in Germany for 2020 as a whole and a drop in tourist consumer spending of 17.8 billion euros. 

Based on the latest available data for German tourism inbound as of the beginning of October, Tourism Economics now expects the number of overnight stays to fall by 51.2 million to 38.1 million and a loss in tourism consumer spending of 18.7 billion euros.

According to current calculations, only a recovery to 86.4 percent of the pre-crisis level of 2019 for German tourism is predicted for the end of 2023. At that time, the June forecast was still predicting a full recovery over the next four years.

“Especially the current situation in important European source markets for the German Incoming tourism and developments in German cities make it clear that the recovery phase will probably take years,” explains Petra Hedorfer, CEO of the GNTB. “This makes it all the more important now to use anti-cyclical marketing to retain customers in the long term and to continue to make the brand strengths of Destination Germany visible.

Romit Theophilus, Head of the German National Tourist Office, India  adds for the source market India: “Despite setbacks from the COVID-19 crisis GNTO, India prepares to bounce back in the later part of the year by organising a series of events with Trade to promote Germany’s appeal as a Travel destination”.

Faster recovery for European source markets

The detailed forecast of the regions of origin of potential travellers to Germany reinforces the basic statement made in June that European source markets are more likely to recover than overseas markets. The order of the largest source markets for German tourism inbound remains the same in the Corona crisis: In 2020, the most important source market for incoming travel will continue to be the Netherlands, followed by Switzerland, the USA, the UK and Austria.

However, the longer-term forecasts for demand from abroad are much more cautious than in June of this year. According to the latest analyses, Europe will fall short of expectations in 2023 with a minus of 9.4 percent in international overnight stays, and demand from overseas will remain well below expectations at minus 24.6 percent negative range. 

According to this, the overall balance for 2023 would also remain negative at minus 13.6 percent, and reaching the pre-crisis level does not appear realistic again until 2024.

Business travel market faces major challenges

The updated analyses by Tourism Economics basically confirm the previous assumption that the business travel segment is recovering more slowly than leisure travel.

 For the year 2023, the forecasts for the business travel segment are currently significantly worse than the recovery for leisure travel, with a minus of 26 percent in arrivals than the recovery for leisure travel at plus five percent.

Germany maintains competitive position

According to current analyses, Germany occupies an excellent position in the competition among European destinations during the crisis years. For 2023, Tourism Economics forecasts second place for Germany after Spain and ahead of Italy, France and Great Britain.

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