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Travel & Hospitality 07.22.20 BLOG 

The Path to Recovery from COVID-19: APAC’s Road Ahead

TransPerfect Travel & Hospitality Team

The Path to Recovery from COVID-19: APAC’s Road Ahead

With the travel industry ailing over COVID-19, there are signs of recovery in the APAC region. Air and travel is one of the worst affected industries, according to a McKinsey study conducted in April 2020—how will companies look to bounce back? 

With international travel restrictions in place and no signs of letting up, companies have focused on the domestic market. In March, figures from an IATA study showed that passenger numbers in China have increased from the initial downturn since the start of the crisis. Also, occupancy is growing slowly, now above 35%, with some markets reporting the most activity on weekends. [source]

Companies are now taking steps to address the world today with both short-term rescue and long-term business strategies.

 

 

Short-Term Rescue

Long-Term Optimization

Operations & Marketing Adjustments

  • Maintain good customer relationships
  • Develop new sales strategies to entice travelers
  • Attract more customer segments by investing in localization to expand market reach
  • Increase product diversity to meet the needs of different segments in the peak and low seasons

Spending Capital Wisely

  • Cut unnecessary expenses and focus spend on initiatives to help drive sales
  • Implement new technologies to streamline processes and increase efficiencies

Employee Strategy

  • Establish “employee sharing” with industries that need support, like mask production and delivery
  • Increase proportion of local employees
  • Raise commission and reduce base salaries

[HVS: COVID-19 and the Chinese Hotel Sector]       

Light at the End of the Tunnel

According to IATA:

More recently, figures show that daily flight totals rose 30% between the low point on 21 April and 27 May. This is primarily in domestic operations and off of a very low base (5.7% of 2019 demand). While this uptick is not significant to the global dimension of the air transport industry, it does suggest that the industry has seen the bottom of the crisis, provided there is no recurrence. In addition, it is the very first signal of aviation beginning the likely long process of re-establishing connectivity. 

“April was a disaster for aviation as air travel almost entirely stopped. But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions. And business confidence is showing improvement in key markets such as China, Germany, and the US. These are positive signs as we start to rebuild the industry from a stand-still. The initial green shoots will take time—possibly years—to mature,” said Alexandre de Juniac, IATA’s Director General and CEO.

The initial flight increases have been concentrated in domestic markets. Data from late May show that flight levels in Republic of Korea, China and Vietnam have risen to a point now just 22-28% lower than a year earlier. Searches for air travel on Google also were up 25% by the end of May compared to the April low, although that’s a rise from a very low base and still 60% lower than at the start of the year. [source]

In July, Cathay Pacific and Cathay Dragon are operating at approximately 9.4% capacity, doubling the operating capacity of June. 

There are positive signs of recovery for the industry, and while it will take time, there is an opportunity now to rebuild and shape the future of travel and hospitality.  

TransPerfect is the most trusted provider of language services and related technologies to travel and hospitality organizations worldwide. Our innovative solutions make it easy to launch in new markets, attract new customers, cultivate relationships, and build loyalty over the long haul. At the same time, our services and technologies can facilitate the reduction of internal and external costs and scale dynamically, helping your brand stand out to customers everywhere. Contact our travel industry experts at travel360@transperfect.com who can recommend the best solution for you.


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