‘In 40 years I have never seen anything like this’

Tom Jenkins, CEO of ETOA, had previously called on industry colleagues to be ‘stridently optimistic’ about the impact of coronavirus but one week later the situation has dramatically deteriorated. Here Jenkins explains why he believes governments must take urgent action to restore confidence.

"With Covid-19 continuing to spread, governments are running roughshod over economic considerations. Government actions to push back the epidemic need to be balanced with people’s livelihoods.

Schools are closed, borders shut, events cancelled, outbound travel discouraged. Like the virus, these actions have international repercussions. France has stopped schools travelling abroad, educational travel from the US to Germany is being cancelled and Italy is imposing a lock-down. Bookings in Dublin and Copenhagen from North America have been affected. When the Thai and Israeli authorities stop outbound travel, the impact is felt wherever those clients were meant to be.

The economic impact is spreading faster than the virus that triggered it. The consequences are evident. Throughout Europe we are seeing signs of tourism meltdown. Business from China is non-existent, and from South-East Asia it is down by 75%. Inbound traffic to Italy from all markets is at a standstill: nearly 25% of all inbound traffic to Europe from the US involves Italy.

All educational groups (and we are moving towards high season for them) from the US are in the process of being cancelled. In a peak booking period, bookings for Europe from North America have stalled. We anticipate further deterioration the moment the US starts looking for cases domestically: as of March 5th, it has tested 472 people.

This is occurring as intra-European travel is undergoing a similar plight. Domestic travel is also significantly down even before there is evidence of widespread transmission. Companies are now routinely banning all ‘non-essential’ travel. Conferences, meetings and all forms of collective corporate activity is being suspended. We will soon have a full-blown crisis in the hospitality sector.~ Last week I was insisting that we need to be stridently optimistic. One week later I am seeing operators (who had been struggling to find staff) engaging in compulsory redundancies. Such is the speed and severity of this downturn. This will have repercussions throughout the supply chain.

I have worked in this industry for nearly 40 years. In that time there has been the Libyan bombing in 1986, the first Gulf War in 1991, 9/11, the second Gulf War, the financial crisis of 2007/8. I have never seen anything like what is happening now.

Governments are working on the basis that it is ‘highly likely’ that the virus will go Pandemic in the near future. But they think that 75% of those infected will not display symptoms. When we have had terrorist scares there was an underlying moral obligation to ignore what people knew to be a minor threat: doing anything else would allow the terrorists to win. The moral action at the moment appears to be to sit at home and be fearful. In due course this is an action which will be revealed as neither moral nor practical.

It was noticeable at one official meeting (which was supposed to be about the impact on the travel industry) roughly two thirds was devoted to the nature of the medical crisis. All the attention of government – and consequently the press – is on the threat posed by the virus. Somehow the narrative must be changed from ‘health’ to the impact on the economy of what is happening. This impact needs to be curtailed as urgently as the virus. It is not enough to say ‘better safe than sorry’; what we are seeing is sensationally damaging.

How we restore confidence when it is being shattered is a conundrum, but we need to address it now. We are in the midst of this particular crisis, but it will end. Governments need to act on what is happening to their economies: it is as important as what is happening in the area of health.

What is happening to the travel industry, and consequently the entire service economy, is real and happening now.

It is impossible to gauge the overall economic impact at the moment as we are still gathering evidence, but the European tourism inbound industry is contemplating a reduction of business of at least 50% in 2020. This would require a major upswing in demand later in the year. How we go about getting to that recovery is an urgent priority."