Currently, the travel industry has been stabbed (quite vigorously, might I add) in the back by the Covid-19. We, as well as many travel enthusiasts, risk-seekers and plane catchers out there wonder how long it might take to bounce back, and how? Will the industry see a new birth, or will it simply go back to how it used to be? Here, we discuss probable ways that travel might be able to get back on its feet, and how you can get back on that flight as soon as possible!
Of course, most of the burden that goes with reviving an economic sector falls on the government, who are in charge of stimulating demand in their economy when outlooks aren’t really peachy. In this case, there seems to be an inhibited demand, where people are currently not willing to take risks, but see value in future travelling. Recent statistics see a 229 per cent increase in global flight bookings that were made to the UK, during the dates around January 2021 – which means that the travel industry definitely has hope for not even 8-9 months from now: a good sign!
This also means that the next possible steps toward action are leaning towards aiding the supply side of the travel industry: which can be done in a multitude of ways.
1. Reducing of TDS Taxes
TDS stands for Tax Deducted at Source, and is a tax that is levied on the seller (in this case, those who are selling in the travel industry, such as visa, airline and hotel companies) but is usually paid by the buyer (in this case, whoever is willing and able to make that overseas trip). This acts as a major disincentive, especially at a time when travelling does not seem so accessible – people may have to pay more than they usually would be willing to, since travel hasn’t been stimulated in a while. So a reduction on this tax would mean that both buyers and sellers can now feel better about travelling at lower costs!
2. GST Relief
As we all know, GST stands for Goods and Service Tax, and is levied on (you guessed it!) goods and services. Having been one of the most recent tax policy changes in the Indian Economy, this tax does indeed have an effect on the travel industry that provides a myriad goods and services. Government relaxations on this tax regime might benefit more than just the travel sector, as it stimulates demand by promoting a lower price for goods (making it more attractive), and allows supply to recuperate by giving them leeway in terms of costs incurred as well. Overall, it might be in all parties’ best interests to see a reduction of taxes that might be able to get the economy out of an impending recession.
3. Interest Free Credit
Till the time that firms in the industry are able to recuperate the losses incurred over the last few months (over the time that most countries were experiencing lockdowns and movement restriction orders), an interest free credit scheme may allow this highly stressed industry to take a breather. Making firms only pay the principal amount, and cutting down on the interest section allows for a lower cost of production. This, in turn, is passed onto the buyers, who are able to enjoy lower rates. Of course, this wouuld stimulate demand, and lead to overall growth of the industry. Another plus is that this might lead to a reduction in unemployment as well, with firms now being able to hold onto employment instead of letting go of staff due to higher costs.
4. Domestic Tourism Uptake
It goes without saying that it is definitely easier (and cheaper!) to travel domestically compared to going abroad. That being said, it’s also important to note that in countries where movement restrictions have been imposed, it makes more sense to first ease state-wide borders than opening up to other countries at once.
So the possibility of travel kicking off domestically – as well as the government promoting this kind of travel first – is highly likely. Advertisements, lowered fares, tax and subsidy benefits, as well as packages all contribute to what might become of a domestic tourism boom. And why not? If foreigners can come to your country to find themselves, then why can’t you? Exploring all the nooks and crannies of your beloved motherland may just bring you closer to home, and help the industry as well.
5. Exclusive Services
We’ve all got some time on our hands due to the Covid-19, and reflections on our current life (and maybe an existential crisis or two, we can relate) are commonplace. Many businesses may utilise this time to see how best to stand out from their competitors, and make sure their services are up to standards – including those of the travel industry. Keeping in line with this thought, the likelihood of using the concept of exclusivity to compete is high. Companies may try to optimize on what makes them unique, as well as come up with strategies and advertise ‘exclusive’ deals that bring out their originality. Of course, these are most likely to be strongest at the time of opening, and so customers may feel it’s smartest to ‘grab it while it’s hot’: which we totally agree with – if you’ve got an opportunity, seize it!
6. The Behind-The-Scenes Operators
Of course, the travel industry doesn’t just involve fancy hotels and top-class flights. Many of the operators involved in delivering the final product are obviously affected as well. Services such as logistics companies and tour operators who work behind the scenes mustn’t be forgotten: with a drop in overall travel, their dependant labour is at stake as well. Other more obvious services that rely on patronage for their success include small accommodation establishments (and the large ones, as well), food and beverage suppliers, and the tourist entertainment sectors. Of course, once demand picks up and people start flocking in, this may not be such a hassle, however the possibility of operating under a long term loss is still imminent.
7. Don’t Touch!
There has been much debate on what the travel industry might look like post Covid-19. Will it go back to the way it was, or will a global pandemic make significant changes to the structure of how one might operate in this sector? One highly brought-up point is that of the introduction of a no-contact policy, where many travel operators may decide to do whatever they can remotely. Local deliveries such as Swiggy, that have already taken to such an approach, see their drop-offs in a no-contact fashion – enabling the means to stop this contagious virus. As consumers, we could also promote these local businesses by tipping well, and making sure that those who need the business are taken care of. Masks, sanitizers and washing hands may alsobecome more of an advertised precaution, and people may be more aware when maintaining queues or having to stand close to each other. Which may be an overall benefit, as even without a global pandemic, hygiene is of utmost importance!
Overall, there are many ways that both governments and firms can work together to bounce back from this pandemic. A contagious virus has become more of everyday life, rather than its initial status as an anomaly, but this only means that complacency must be kept in check now more so than ever. Let’s all do our part and be the responsible citizens that we are required to be, so that we can finally see the fruits of our patient wait towards a flourishing economy! And then it won’t be long before we get those suitcases packed and head on over to our next exciting destination. (Hint: Visa2Fly has your visa, SIM card and travel insurance-related issues covered!)