The travel and hospitality industry is a key sector all around the globe. The current COVID-19 pandemic has impacted the travel & hospitality sector and overall economy all around the world. In this article, we will firstly look at the economic impact of COVID-19 on the travel & hospitality sector and how the travel sector can make a comeback during and post-COVID. Additionally, we will discuss why pursuing a postgraduate degree (Masters or MBA) in Hospitality & Tourism Management during this phase can pay rich dividends in the long-term career.
Market Trends and Career Advice on the Travel and Hospitality Sector Post-COVID-19
Co-authored by Ajay Singh and Baishali Mukherjee
Significance of Hospitality & Travel in the Economy
The Travel & Tourism industry makes up about 10% of global GDP and people employed around the world. With the growth in the middle and upper-middle class in countries like China, India and many other countries, there are hundreds of millions of people who have stepped out of their cities or countries to experience many other cultures, countries, and places of history.
From 2010 to 2019, the travel and tourism industry has grown at an average of 4-5% per year while the global GDP has averaged a growth of 3%. So, in summary, the travel and tourism industry has given a larger boost to the GDP growth than many other industries other than technology and healthcare.
Focus on Indian Economy
Impact of COVID-19 on Travel, Tourism & Hospitality Industry
The short -term impact of Covid-19 on travel and tourism has been devastating across the world. Most of the flights and planes are grounded, the majority of hotel rooms are empty and tourist and business destinations such as San Francisco, London, New York devoid of any business or leisure travelers.
All of the companies involved in this industry are trying to stay afloat for better days and to survive this black swan event. Hundreds of thousands of employees in this industry are facing short-term impacts such as layoffs, furloughs, and pay cuts.
However, any professional who has been associated with the industry knows things will bounce back and recover. The only question is no one knows when, how long will it take, and how much of the travel, the tourism industry will come back.
China reports hotels suffering a 64% decrease in business and a loss of $80 billion over the Spring Festival alone. Currently, thousands of hotels across mainland China’s strongly affected areas are closed while properties in major cities like Shanghai, Beijing, and neighboring countries like Macau and Hong Kong report single-digit occupancy rates.
Europe also saw the first effects as early as January and February. For these two months, roughly two million lost hotel nights were reported and the EU department for Internal Markets estimates a financial loss of roughly €1 billion per month for the European tourism industry as a result of the virus.
A recent study by the World Economic Forum talks about close to 90% of the world’s population now living in countries with travel restrictions for the first time in the history of mankind. Airlines, travel companies and the tourism sector as a whole are among the most affected businesses. An estimated 25 million aviation jobs and 100 million travel and tourism jobs are at risk globally.
Due to COVID-19, unprecedented travel restrictions, and ongoing lock-down, UNWTO predicts a 20% to 30% reduction in the arrival of international tourists in 2020 leading to a decrease in international tourist receipts by 300-450 billion USD. The pressing impact, of the pandemic, however, will be the loss of millions of jobs. The next colossal threat is the liquidity crunch and dearth of working capital for the travel and tourism industry.
Signs of Hope for the Travel & Hospitality Sector
If we look at similar events in the past, such as the spread of SARS, we can hope for some positive very soon. Even though SARS is not 100% comparable it´s still similar in the different phases of a pandemic spread and how it impacts the market.
For example, STR reports that after SARS-related travel restrictions eased, the bounce-back period in China and Hong Kong took markets back to pre-SARS levels within three months. This means those six months after the WHO had declared SARS a global threat, hotel markets had all but recovered.
So, there is definitely hope!
Additionally, China, where the pandemic originated, and is reportedly under control, with restrictions being lifted, has shown early signs of recovery as well. Bloomberg says hotel bookings in the country have gone up by 4% the first week in March.
Potential Recovery (Forecast)
How the Hospitality & Travel Industry Can Make a Comeback Post-COVID-19
What’s the Academia is saying:
“Compared to short-term external threats, global crisis brings together environmental uncertainty, increased complexity, ambiguity and unpredictability. The current pandemic creates the scenario for new processes of sustainable strategic adaptation and renewal – to disrupt inertia by modifying or replacing the business´s core competencies and capabilities to ensure long-term performance and survival. To recover, hotels and tourism firms face the unique opportunity of developing sustainable organizational responses aiming to increase their tolerance of uncertainty and to nurture sustainable sources of organic growth.”
Carlos Martin-Rios (PhD, RutgersUniversity), AssociateProfessorat EHL (Ecole hôtelière de Lausanne)
“Due to the suppression of customer demand during the epidemic, the industry is expected to face a period of concentrated demand release after the epidemic, based on experiences from SARS in 2003. How to quickly and accurately capture the change in customer demand, how to design a corresponding customer experience, how to turn crisis into opportunity and how to seize the opportunity for development? These have become the key challenges for hoteliers to ponder.”
YutongMeng, Associate at EHL Advisory Services
Read more about the Hospitality Way of Survival after COVID-19 Crisis.
What Hotel & Hospitality Industry should do to overcome the pandemic?
- Adopting cloud technologies
- Attracting millennial travellers
- Using the lock-down for hotel maintenance and renovation
- Focusing on meal delivery from the hotel restaurant
- Staying up-to-date on available forms of relief
- Reconsidering existing health and safety techniques, policies, and procedures
- Ensuring the accuracy of the information on the coronavirus
- Focusing on changes in customer experience, switch in customer perceptions, shift in consumption patterns and quality asset management
Potential Health and Safety Measures Post-Lockdown (Ease of Travel Restrictions)
- Self-service pay systems
- Orders through mobile apps
- Non-contact service and order deliveries
- Complimentary hand-sanitizer stationed at the entrances and exits
- Suspension of unnecessary work-place gatherings
- Readiness to deal with staffing reductions
Key Aspects that the Travel & Hospitality Industry Needs to Address:
- Availability of cash
- Brand protection
- Cyber threats
- Supply chain issues
- Business continuity
- Assess employee retention and operational policies
Read more on How the Travel and Hospitality Sector Can Make a Comeback after COVID-19 Pandemic.
Career Advice for Travel & Hospitality Students/Professionals
Many young students and professionals who were thinking of having a career in hospitality, travel, and tourism are wondering what to do and how to think about their future prospects. If you are one of them, here is a top 3 things for you to think about and keep in your view.
Short term pain will impact the whole industry and anyone, everyone currently associated with the industry or exploring opportunities:
Next 12 to 18 months are going to be slow for the industry as many countries and cities keep control of social distancing, shelter-in-place policies, large conferences, gatherings, events, and even maybe non-essential business trips. For example, Facebook has announced no conferences or large meetings until the summer of 2021. Many companies have already shut business travel and plan to keep it minimal in 2020. Hundreds of millions of leisure travelers have canceled their summer trips, plans and may not start booking again until a vaccine is found. Millions of employees furloughed may not return until early next year.
So, what to do if you are a student studying in hospitality, travel, tourism industry. If you are just starting your education, you may be fine as it may be at least 18-24 months before you graduate. If you are a fresh graduate or a young professional in this industry, it may be worthwhile to evaluate further study options or look at graduate studies.
No better time to develop your skills, knowledge than during the time of economic recession. Connect with one of our network of counselors and get some guidance from experienced professionals.
The industry is critical to the functioning of the global economy, it will revive and it will thrive over the long term:
With approximately 10% of the global workforce employed in this industry, not to mention another 10% or so who may be indirectly associated with this industry, the travel and tourism industry will play a big part in the world GDP growth post-COVID-19 pandemic.
Hundreds of millions of young, middle-class families and professionals will continue their quest for global experience and travel. This industry may see a short-term impact but will come back and thrive in the long term. The global population, the middle class continues to grow and it is human nature to explore and see new places, destinations, historical sites, and cultures.
The key for future aspirants is to be patient, have a passion to play a role, and build their career and future in the industry.
Trivia:
Europe has already open. Governments are now promoting tourism very aggressively. People have also slowly started to going for trips within Europe.
Even in India, people are visiting Himachal Pradesh, Uttarakhand, etc.
Italy, which was in such a pathetic situation, is doing pretty well now. Have a look at the following video (in Hindi) by popular YouTuber, Druv Rathee (uploaded on YouTube on July 24, 2020). Dhruv visited Italy after the lockdown.
Develop skills that can enable you to differentiate within the industry:
During this time of uncertainty, slow down and recession, every individual aspiring or associated with a career in the travel and tourism industry should use the time towards developing new skills such as digital marketing, analytics, data science, user experience design, etc. These skills will continue to be in demand once the industry starts recovering and many companies in this industry will transform their operations, look at doing the old things in a new way and hire talent that can bring new ideas and fresh perspective.
Postgraduate Education and Advanced Degrees (MS/MBA) in 2020 / 2021
Multiple studies and experts are saying that the travel & hospitality market will be back within 18 – 24 months, provided the precautions and measures are taken by the organizations and authorities.
If we think logically, people do like to travel and going out for meals. After months of restrictions, people will be more eager than ever to go out for meals and vacations. So, utilizing the next 12 – 24 months for higher education in the core travel & hospitality management domain can pay rich dividends in the long-term. Historically there is a counter-cyclical effect on application volumes for graduate school during a downturn in the economy. Besides, advanced degrees always help to get jobs and better-pays during recessions.
Read why it makes sense to opt for a Masters or MBA post-pandemic?
How a Masters or MBA Degree from EHL Can Help?
EHL has more than a hundred years of experience in hospitality education and a trusted reputation in the industry as the best hospitality school in the world for excellent academic quality and professionalism.
What makes EHL students so employable is EHL’s strong background, academic recognition and extensive alumni network (the largest and most active professional network in the world of hospitality), all of which widen their employment and business development opportunities in the global industry.
EHL’s degree programs are known for instilling the right mix of industry know-how, creativity and entrepreneurial spirit. EHL’s education is designed to introduce students to new cultures and ways of thinking. Students develop the ability to manage the complexity of worldwide operations, with the local touch that makes great hospitality managers. They learn how to adapt their management style, service offers and business strategy to key hospitality markets. That is why close to 50% of EHL alumni are in a senior management position or higher role.
EHL is the only Hospitality Management School in Switzerland to be recognized as a Swiss University of Applied Sciences and Arts and have American (NECHE) accreditation. EHL degrees comply with the Bologna requirements using the European Credit Transfer System (ECTS). This accreditation is recognized by companies, institutions, and government bodies worldwide.
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