BUSINESS NEWS
Hotels face income ‘valley of death’, warns PwC’s Mayer
Destination hotels face “a valley of death” as tourism restarts and they await guest payments, a senior industry analyst has warned. Nicolas Mayer, PwC industry
leader for hospitality and tourism in Europe, the Middle East and Africa, said: “The most-scary thing is the moment the tourism ecosystem opens, especially for hotels. “There is a valley of death where
cash goes out, but the first cash inflows come after guests have left. The gap can be 150 days.” Mayer told an International
Tourism & Investment Conference (ITIC) online summit on Financial
Nicolas Mayer
EC sets July 1 for lifting of travel restrictions from non-EU countries
The European Commission has recommended travel to the EU from selected non-EU countries be allowed to restart from July 1. However, Germany has
Strategies for Recovery: “There is a need for tourism financing at a government, at a para-government and at an industry level. “Governments need to develop
models to support tourism so it can survive this valley of death.” He argued: “Governments will
have to [support] the industry, but it’s also a job for the industry . . . to renegotiate the payment chain, all the way down to the traveller to share the load of a cancellation.”
extended its foreign office advice against all but essential travel to most of the world until August 31. The German advice covers 160 countries, including Turkey, and Berlin said it would lift this only for countries where the spread of the virus is curbed. The EC announced on June 11
that restrictions on non-essential travel to the EU should end on June 30, with many Schengen area states lifting EU internal border
restrictions this week. The commission proposes member states agree a list of non-EU countries from which travel can resume. EU home affairs commissioner
Ylva Johansson said: “We are proposing a clear and flexible approach towards removing restrictions on travel to the EU. It will apply to all countries in a similar or better [outbreak] situation to the EU.” The EC said: “The restriction
should be lifted for countries selected, based on the health situation, the ability to apply containment measures during travel and reciprocity considerations.”
UK outbound demand ‘pretty dire’ Ian Taylor
UK quarantine restrictions have “had a dramatic impact” on outbound travel intentions, consumer research has found. A BVA-BDRC survey of more
than 1,700 UK adults in late May suggested only 4% now intend to take an overseas holiday by the end of September. The weekly BVA-BDRC research
found that where UK consumer intentions to travel domestically and overseas had been broadly similar up to early May, by the end of last month “the difference in lead [booking] time between UK and overseas trips had diverged considerably”. The researchers note that on
average: “Britons next expect to take an overseas holiday in nine months’ time compared to six months’ time for UK holidays.” The survey found the average lead
travelweekly.co.uk
time for booking an overseas trip had extended to seven months compared with 4.6 months for a UK holiday. The research found average
lead-in booking times for domestic and outbound holidays diverged by 0.3-0.5 months through the lockdown until prime minister Boris Johnson’s announcement of quarantine restrictions on May 10. Since then, booking lead-in times
have varied by about 2.4 months up to the most-recent research on June 2-3. BVA-BDRC reported: “There is
no sugar-coating the situation. It is pretty dire for the industry.” However, the survey results
do suggest increased demand for winter-sun holidays, with 38% of respondents either “planning a trip between October and March or would like to take one”. The researchers note: “Overseas travel is still a priority. It’s more a
question of how and when rather than whether people will go.” The survey identifies the “small
but resilient” 4% of the population who are “still determined to take an overseas holiday between now and September” as younger, better-off financially and mostly in office-based work. BVA-BDRC suggests package
holidays “with fewer hidden costs and few logistical, physical and psychological touchpoints” appeal most to these consumers. It reports the market for winter
sun before the Covid-19 pandemic as about 17% of the market, less than half the 38% suggested by the survey in late May, although the researchers note: “Usually only a proportion of those predicting winter-sun trips end up taking them.” The BVA-BDRC research was
conducted on May 26-29 and June 2-3. More at
bva-bdrc.com.
18 JUNE 2020 31
Only 4% of UK adults plan an overseas holiday by end of September
PICTURE: Shutterstock
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