There is no doubt that 2020 was the worst year in tourism history. The World Tourism Organisation reported a “collapse” in international travel, with one billion fewer international arrivals than in 2019.
Travel agencies in Singapore were not spared. In 2020, Nam Ho DMC said that bookings for group tours dried up amid the Covid-19 pandemic, forcing its pivot towards e-commerce and delivery services.
Now with almost half of the global population vaccinated, travel is picking up once again. Despite fluctuating rates of infection in some regions, the efficacy of the vaccine has given many people enough feeling of security to pack their bags for another country once again.
However, this does not mean travel will resume to pre-pandemic levels any time soon. A report by Fitch Ratings predicts that global travel will resume to pre-pandemic levels only in 2024. Though the report says that travel will pick up in 2022, the rate varies across regions and is subject to the emergence of newer, more deadlier coronavirus variants.
The current travel climate
With the arrival of the highly mutatious and infectious Omicron variant, the travel industry remains cautious. Covid-19 safe measures are observed and practiced, though the intensity of these measures varies across countries. Travellers arriving through the Vaccinated Travel Lane (VTL) are expected to self-administer supervised Antigen Rapid Tests (ARTs) on day 3 and day 7 of their arrival in Singapore. Within two days of entering or transiting Singapore, they must be tested negative in a pre-departure test before they are allowed to travel.
The launch of the VTLs has led to an increase in the number of flights passing through Changi Airport. Flights to Kuala Lumpur in the last week of November 2021 were up to 43, 15 per cent of 2019 numbers. Sydney and London flights are at about 50 per cent and 51 per cent of 2019 respectively. In October, 10,200 planes passed through the airport, compared to the 9,400 in September.
How tour agencies are adapting
As travel picks up, so do the Covid-safe measures. Group tours conducted in Singapore are capped at five people in a group. Overseas group tours conducted by local tour agencies, such as Chan Brothers and EU holidays, are capped at 20 people a group.
Mr Ong Han Jie, director of EU Holidays, says despite the 50 per cent cut in group sizes, compared to pre-pandemic tours, a 40- or 45-seater coach is used to ensure safe distancing on board the bus. He adds that among other safety measures imposed by the agency, tour buses are sanitised daily. EU Holidays also mandates that all group travellers wear masks at all times, regardless of the country they are in. Group travellers must also buy valid Covid-19 travel insurance, estimated to cost around S$200, before they are allowed to depart, says Mr Ong, adding that EU Holidays had over 50 group tours scheduled between November and December this year.
Although Chan Brothers could not be reached for comment, TheHomeGround Asia gathered from its website that it is also practicing Covid-safe measures during group tours. According to the site, tour guides and tourists traveling with Chan Brothers are subjected to temperature screening during the tours. Safe distancing is also advised throughout.
Travellers who test positive for Covid-19 before departure are assured of $2,500 in protection benefits and those who test positive overseas are assured of up to $50,000 in benefits. Full cash or credit card refunds are not available, though. Instead, Chan Brothers promises a full refund in travel credits should customers cancel their trips, test positive for Covid or in the case of new border restrictions.
Recently, the Singapore government has imposed a temporary freeze on ticket sales of VTL flights and buses amid Omicron concerns and the move will help limit Singapore’s exposure to imported Omicron COVID-19 cases. This will likely dampen travel sentiments again.
At any rate, uptake of VTLs in general has been slow, according to a report by Bloomberg. It says that while there are quotas on the number of travellers daily, the average number coming in on VTLs is less than 500 people a day, compared to the daily pre-Covid rate of 181,600 travellers.
With costly Covid tests and plane tickets, the worry of Omicron “creates an additional layer of anxiety”, says Mr Mohshin Aziz, director of Pangolin Aviation Recovery Fund. This constant uncertainty due to the ever-evolving Covid-19 situation has forced some travellers to cancel or postpone their trips.
CTC’s Travel’s spokesman says that some customers, who are due to travel soon, are “taking a wait-and-see approach.” He says that the agency has also seen its VTL enquiries shrink by between 20 and 30 per cent.
Mr Jameson Wong, Asia-Pacific vice-president of clients and partnerships at ForwardKeys, a global air travel analytics company, advises travellers with non-imminent trips to “reassess and readjust (their travel plans) as things unfold”. Data compiled by ForwardKeys showed that the ratio of flight cancellations against bookings has spiked with the onset of Omicron.
This is because the risk of contracting the virus is high regardless of whether travellers visit countries with high or low rates of infection, says Associate Professor Alex Cook, the vice-dean of research at the National University of Singapore’s Saw Swee Hock School of Public Health. He says that while overseas, travellers “may spend more time in public places like restaurants and therefore are exposed to more risk of infection.”
Itineraries offered by tour agencies need to shift focus to more remote locations, where there is likely to be less intermingling of tourists and locals, says a report by Tourwriter. Tour agencies also need to design itineraries that avoid public transport to reduce the spread.
One travel company that is riding out the pandemic because of its business model is Taiwanese eCommerce agency KKday. It has always been leveraging the bespoke tourism model which has helped the agency survive.
“(As an) online travel agency, clients are able to customise their own travel experiences easily on our website or via the KKday app according to their destination, preferences, budget, and types of experiences they seek”, says Ms Weichun Liu, its co-founder. She adds that customers usually seek deals that meet their travel needs, and they desire convenience in making and fulfilling bookings.
“Our customers prefer the bespoke tourism model as they have full control of their own itineraries instead of going on a mass packaged tour that may not have the ideal itinerary”, says Ms Liu, adding that her firm “curates unique experiences and events for customers” to considerable success.
Ms Liu notes that “ECommerce tourism is generally very popular because it offers ease and convenience for customers to browse and purchase anytime, anywhere” and that KKday’s business model is “fluid and adaptable” to sudden changes in Covid restrictions and regulations.
“During the lockdown, we had a suite of work from home offerings- from Taiwanese snack deliveries, virtual tours to Japan, Taiwan, Europe, and online workshops such as yoga and art classes,” she adds.
Airbnb: Coming back from the brink
Months after the Covid-19 pandemic caused its bookings to drop over 70 per cent and cut its valuation in half, Airbnb managed to pull off a dramatic recovery and in November 2020, the company headed toward an IPO with an expected valuation of US$30 billion.
Airbnb management businesses were the most hit once the pandemic struck in early 2020. The closing of borders and restrictions on group sizes meant that businesses that were heavily depended on tourist patronage saw falling demand for their services, so many of them had to scale back in order to move forward.
All Airbnb businesses are also bound by health and safety requirements for Airbnb stays, making it necessary to wear masks and maintain a safe distance wherever possible. There is also a cap on large group sizes — a maximum of 16 people. Social events and parties are banned. Hosts are also urged to provide contactless options for guests to check-in.
A spokesman from Firefly Eco Lodge, an Airbnb superhost operating in Bali, says, “Covid has been very difficult as we went from very popular to nearly empty because of border closures”.
As Indonesia increases quarantine for all arrivals from 7 days to 10 days, it is unlikely then that more tourists will come to Bali, he adds.
So, Firefly Eco Lodge turns its focus largely on the domestic tourist market to engage travellers within Indonesia, and “it has been a blessing in disguise”, Firefly Eco Lodge spokesman says. Rather than marketing the lodge as a tourist destination, it is attracting guests based in Indonesia who work remotely. Currently, guests at Firefly Eco Lodge are there for “work and play staycations”, he says.
A spokesman for Airbnb business Skai Joglo, which also operates in Bali, says it has had “zero international tourists” since the pandemic, and is “solely relying on Indonesian domestic travel to stay open”. He adds that this strategy has been met with considerable success: “We have had an average 90 per cent occupancy during this pandemic but our nightly rate (of occupancy) dropped as low as 70 per cent in some of the difficult months.”
Designed as an Indonesian-style wooden treehouse in the middle of the jungle, domestic travellers continue to book stays at Skai Joglo to “experience something unique and different to what they usually experience and escape the city life. (Now is generally an) affordable time in Bali for domestic travellers to experience unique stays that are available and within their price range”, says the spokesman.
He says unlike its current situation, Skai Joglo needed to be booked up to 12 months in advance during the pre-pandemic days and its guests were “predominantly a foreign demographic”.
Given the reduction in international tourist arrivals to Bali, Skai Joglo has “relied heavily on social media marketing and working with local Indonesian and expat influencers to promote (its listings). By creating engaging content and ensuring a consistent content stream on all social media platforms, it keeps us up to date and relevant in an overcrowded (Airbnb) market”, he says.
The more unique services catering to guests’ individual milestones, such as honeymoon, birthday and anniversary, help to entice them to a staycation. These include a floating breakfast, traditional Indonesian cooking classes and romantic dinners.
However, “our profit has had a massive hit”, says the spokesman at Skai Joglo. He explains that the business has had to reduce the prices for some listings while offering a consistent quality of service. Yet by offering more individualised experiences to local guests, Skai Joglo managed to stay open throughout the pandemic and continue to provide its workers with consistent income.
Taking off into the clouds during Covid
When it comes to the air travel industry, it is difficult to overstate just how the pandemic has devastated it. Last year, the total revenue for the sector was only about 40 per cent of that of 2019. It is expected to shrink further before traffic returns to the 2019 level in 2024, according to management consulting firm McKinsey & Company.
Apart from the financial woes, the pandemic’s longer-term effects on aviation are emerging, some of which are obvious: hygiene and safety standards becoming more stringent, and digitalisation continuing to transform the travel experience.
While business travels will take longer to recover, it is obvious that leisure travel is already rebounding. At the beginning of this year, analysts said that while more carriers are likely to go bust, budget airlines could recover faster than their larger and full service counterparts.
TheHomeGround Asia approached local budget airline Scoot to find out how it is recovering despite travel restrictions, but it declined to comment.
Yet it is clear from the Singapore Airlines Group 2020/2021 Annual Report that while Singapore Airlines (SIA), Scoot and SilkAir suffered a total of S$4.3 billion in losses attributed to the 97 per cent dive in footfall from travellers, the financial loss was partially offset by the higher cargo revenue, which rose by S$758 million or 38.8 per cent year-on-year to S$2,709 million.
With travel stuck in a holding pattern, Scoot has been using some of SIA’s cash to boost staff training and invest in new software that helped with more profitable fares for connecting flights. Its CEO Campbell Wilson told CNA in July that there had been a lot of investment which was “geared toward a future recovery” and that he hoped those investments “will pay off as time passes”.
As of March 2021, the group saw its main airline SIA making a recovery serving 47 destinations, an increase from the 38 at the end of December 2020 and Scoot added one more destination to its network — making it a total of 18 destinations.