The Seesaw
Konstantinos Alexopoulos
CEO
Domotel Hotels & Resorts
The current pandemic has pushed people, organizations and governments to unknown limits and territories. The health factor is undoubtable the top priority for all stakeholders and this has been brought forward to the conscious broader and higher than ever. Even the perception of what safety means has shifted. What once was taken for granted has now become the driver for almost all decisions. Along that way sacrifices are made. Some of those will have long lasting effects that will further define our lives in the future and will most probably change the social, political and the economy’s structure.
These effects and their evolution will dramatically affect the public and the private ability and means to provide the “not-so-granted” anymore health and safety of the people. The health of the community and the Economy have been put on the seesaw and the balance is in quest. In the very near future we will find them on the same side, either both rising or both diving.
After the first phase of the COVID era, the current phase, the recession that will hit the global economy is one of a size that has never challenged us before. It is widely acknowledged that transportation and tourism are those that are already suffering the greatest losses. The season 2020 is already considered as lost. Even now, as these words are put in paper, none of the key players of the distribution are able to plan and organize their business. Restrictions in all markets, in the boarders and in the destinations themselves do not allow for the leisure segment to initiate a restart. However, a kick-o even for a much shorter period is vital for the travel industry and staid players are going to support this at any cost, otherwise the season 2021 will be further jeopardized too. For this to happen, it is absolutely necessary to have a structured framework at least in the EU and the sector’s restart to be part of an organized intra-countries plan. The appetite to travel is there. How the health factor is addressed is critical, both for the consumers’ trust and for the actual safety of visitors and of local communities.
The appetite to travel is there. How the health factor is addressed is critical, both for the consumers’ trust and for the actual safety of visitors and of local communities
Domotel Agios Nikolaos Suites Resort
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Assuming that, one way or another, we go through this season and most of the players are in place or others have taken the place of some, I would expect 2021 to be a year of adequate recovery in the leisure sector, subject to the depth and the quality of the recession in the source markets. The disruption in the distribution will definitely further handicap an accelerated growth of travel. Changes that were already noticed and developing in the industry will be faster forwarded. New products, players, channels, technologies and habits will arise but most likely in a fragmented way in the beginning. Safety, as always will be key, but considered differently than before. In time, the authentic experiences and locality in a sustainable and human approach are going to win over squandering time. However, the economies of scale and the lower capacity to spend will slow down some of this evolution.
Most people would expect or hope for 2022 or 2023 to bring us back to the past and the levels of 2019. We should consider that most probably the greatest challenge lies ahead and is to be evident at that time. The former -a decade long- recession, the drained liquidity and the new crisis and following recession will create a paradox. As demand grows the existing businesses that made it through this turbulent time will be struggling to follow. An increased number of properties getting outdated versus keeping up with the trends will be the outcome of the lack of investments. Furthermore, the valuations in the sector will drop significantly as the markets will raise the factor of the tourism volatility in all models making new investments almost unattractive.
How the governments and the EU are going to deal with the broader and specific issues will be the gamechanger. Unfortunately, the inability to agree on almost any issue and to act leaves no great room for wild optimism. However, the tourism sector, directly and indirectly, accounts for almost 30% in my country’s GDP, while in the EU for around 10%. Supporting the businesses that employ the 9,7% of the EU labor force this period will be crucial for a rebound and a sustainable future. The stake is high and as SETE and the respective confederations of Germany, Spain and Italy stated in the recent letter addressed to the EU Tourism Committee, “Tourism and Travel represent the essence of the European idea, the right and freedom to travel.”
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