What we learn from history is that the human race has suffered great tragedies and has still survived and flourished. It has suffered diseases without cure and with great mortality, great wars, destruction of cities, the transition of borders, regimes, and the very system of governance. However, it has not ceased to live and it has never ceased to travel.
We already notice a large number of people expressing a desire or in fact a longing to travel. There is a strong trend to this effect in our interactions on various social media platforms. The existence of such enthusiasm about travel in the general populace is reassuring and a testament to the fact that the tourism industry, like many others, is suffering the temporary effects of restrictions imposed on movement and trade.
The inevitable relaxation of these restrictions will see a resurrection of the same boom which we have experienced in the past decade.
The tourism industry is not nascent and the nature of investments made in this sector are always made without expectancy of immediate returns. The industry does not suffer from any uncertainties and challenges of evolution and the threat of being outdated, as others like the technology and automobile sectors face. In fact this sector is backed by the certainty that a working individual finds solace and a free mind finds sanity through travel.
The above analysis is supported by a study conducted by the Moody’s Investor Service related to corporate debt issuers which came to the conclusion that even from an investor perspective the lodging, leisure and restaurant sector shall mostly (greater than 50%) remain in the medium and low-risk zone.
This shows that once the consumer base fulfills its essential needs, it will continue to spend on travel. An article in Bloomberg Business states that immediately after the situation became normal in China, the hotel bookings have surged by 40% in just a week.
It also quotes the assessment that the operating rates of hotels is likely to reach 90% soon (in China).
An article by Deloitte on the impact of Covid-19 on the hospitality industry reiterates what we already know – proactive financial steps may be needed to mitigate the impact. However, there is no doubt that with a proper strategy we would mostly tide over these difficult times. What is necessary is to be able to utilize this time to strengthen our business process, develop better products and to train our employees so that when the inevitable boom arrives, we are ready to en-cash to the fullest extent.