Reopening Costa Rica: Hotel Recovery in the New Normal

Supported by a WTTC Safe Travel Stamp, Costa Rica’s borders have slowly re-opened to international tourism. We chat to hotel operators on the ground about the fresh protocols, and the path to recovery.— Costa Rica Tourism Board

As the Covid-19 health crisis continues to impact the world, the question of how to re-open borders to international visitors remains the pressing focus for the global tourism sector.

While many nations are still facing lockdowns and restrictions, some have begun to re-open their borders following successful quarantine periods.

Together with its Latin American neighbors, Costa Rica was forced to temporarily close its borders back in March this year.

As a trending international destination – increasingly popular for its vibrant culture, tropical Pacific and Caribbean coastlines, and innovative approach to sustainable tourism – Costa Rica’s local industry felt the lockdown acutely, not least of all its hotel operators.

Thankfully, supported by a range of new health and safety protocols, Costa Rica is slowly welcoming back its international visitors. The nation recently received a World Travel and Tourism Council (WTTC) Safe Travel Stamp, which covers over 16 new industry-wide safety protocols.

In July, Tourism Minister Gustavo Segura Sancho announced a phased re-opening to international air traffic, with flights initially from the EU, UK and Canada permitted to return as of August 1.

On August 19, this list was expanded to include Oceania (Australia and New Zealand), South America (Uruguay), and Asia (citizens and residents of Japan, South Korea, Thailand, Singapore, and the People’s Republic of China).

As of September 1, residents of nine US states – Connecticut, Maine, Maryland, New Hampshire, New Jersey, New York, Vermont, Virginia, and Washington D.C. –  were permitted to enter Costa Rica. On September 15, residents of three more states – Colorado, Massachusetts and Pennsylvania – will be added to the list.

Travelers to Costa Rica are also now able to arrive on international health insurance policies (as well as two local options), provided they cover sufficiently for Covid-19. Encouraging news for travelers, and a promising sign of things to come for the local industry.

THE NEW REALITY

And though an impending arrival of English, European and Canadian visitors this month and beyond marks a promising addition, hotel operators are viewing the August 1 lift as the first of many ‘baby steps’ towards pre-Covid occupancy levels.

“Right now, national tourism is rising rapidly,” says Montserrat Quesada, Marketing Coordinator at Costa Rica’s El Mangroove Hotel on Panama Beach.

“On the other hand, international tourism will probably take longer, since there is still lots of uncertainty.”

According to General Manager of The Intercontinental Hotel Costa Rica, Ricardo Menendez, the prompt >re-opening of key flight corridors in the region – particularly with the U.S. – is the next vital step for the industry’s resurgence.

Costa Rica saw 3.14 million visitors in 2019, with 53 percent coming from the U.S.

“For demand to reactivate it’s important that the borders with the United States and Latin America are opened, since they are our main markets,” says Menendez.

“These have been very challenging months,” he adds, “with a new reality.”

CONFIDENCE THROUGH SAFETY

In this new reality safety comes first. Hotel health and safety protocols have become central to re-building the industry, keeping guests healthy and safe while bolstering consumer confidence.

Hotels like El Mangroove and The Intercontinental continue to work energetically alongside the government, Costa Rica Tourism Board and Ministry of Health on every mandated rule and regulation in preparation for the foreign visitors to come.

“During the past few months, while the hotel was closed, our team worked rigorously to implement all safety protocols, make all necessary changes, and train staff to be ready to welcome guests back,” says Quesada.

“We’ve implemented measures such as temperature checks at check in, luggage disinfection, sanitizing stations throughout the properties, social distancing measures at restaurants and event spaces, and deep cleaning of every room.”

Investing in technology and supplies to guarantee the wellbeing of its future guests, The Intercontinental has installed thermographic cameras for taking temperature, alcohol dispensers in all areas including entrances, restaurants, lounges and elevators, and implemented thorough staff training sessions, supported by the Cleveland Clinic and Ecolab.

Along with mandated facemask usage, and clear social distancing signage, both operators see this raft of measures as something that’ll likely exist for the long haul.

Meanwhile, local airports are doing their part to maintain vigilance against the spread, with San José’s Juan Santamaría International (SJO) and Liberia’s Daniel Oduber (LIR) airports, continuing to follow strict safety and cleaning protocols.

SPECIFIC PROTOCOL FOR THE TOURISM SECTOR

The fresh industry protocols mark a significant shift for the sector, all underscored and according to a recent paper by Costa Rica Tourism and the Ministry of Health.

As well as general guest regulation, the protocols highlight specific rules for venues, PCOs, vendors and suppliers as well as hotels with meeting spaces – while events can happen again as per the pre-Covid era, enhanced procedures will be in place to ensure the safety of attending guests, including a range of social distancing measures for venue seating configurations and all banquet-style sit-down setups.

Trade fairs will again be able to take place, but with a format allowing for one person at a time, by appointment, and a maximum of two exhibitors at each booth.

While it’s great news that conferences and meetings will again be welcome back at Costa Rica’s hotels, there’s a good chance this transition back from ‘virtual to tangible’ is going to eventuate over an extended period, with Zoom-style formats likely to last the distance, regardless of loosened Covid regulations.

Quesada agrees: “We think that virtual and hybrid events will keep standing out for large meetings, adding that ‘measures such as deep cleaning, sanitizing and disinfection procedures and the use of personal protection equipment will be kept in the long run.’”

In the event that guests or staff are exposed to the virus – or suspected to have been exposed during their stay at the hotel – they’ll be required to undergo a medical assessment through, and comply with the broader directives of the Costa Rican Ministry of Health.

PROJECTING INTO THE FUTURE

Though it might still be closed to vital markets, the August 1 re-opening can only be seen as a promising step in the right direction.

“We hope to see an increase in international travel towards the end of the year, and hopefully a reactivation on the groups and incentives business for the second half of 2021,” says Quesada.

“U.S. travelers have always been one of our top visitors, so in a post-Covid environment we expect to see them traveling to Costa Rica, hopefully as much as before Covid,” adds Menendez.

As for the travelers’ end, visitors permitted to enter Costa Rica will need to provide a negative PCR test upon arrival, as well as a completed online Health Pass. In a fluid situation, against a shifting backdrop, Costa Rica is leading the way to recovery in the post-pandemic world: a template for others in the region to follow.

“We are striving to ensure guest safety and tranquility,” says Quesada, “and we are thrilled to see guests coming back.”

Source: https://skift.com/2020/09/09/reopening-costa-rica-hotel-recovery-covid-19/

France: A less pessimistic outlook for 2020 thanks to the summer season but caution for the end of the year

After a disastrous start of the year marked by the worst recession since the WWII, the French economy’s 2020 growth outlook has now slightly improved. The upturn in economic activity since May has been stronger than expected and it continued during the summer vacations.

The beginning of this normalization has been observed through macroeconomic aggregates such as household consumption of goods, but also through sectoral data, particularly those relating to the hotel and restaurant industry. In this context, high-frequency indicators in our possession suggest that France should record the strongest growth in its history in the third quarter. Moreover, the rebound is likely to be stronger than in many of our European neighbors. Although this phenomenon is partly the result of an arithmetic mechanism, it also reflects a greater resilience in the tourism sector during this summer. However, it should also be noted that the pace of normalization slowed in August.Moreover, we believe that we are now entering a pivotal period where the risks of stagnation or even a downturn in economic activity are numerous, and, therefore, there is a need for caution for the end of the year.

A CATASTROPHIC START TO THE YEAR

The Covid-19 crisis has paralyzed economic activity in France, so that after a 0.2% fall in quarterly GDP in Q4 2019, the negative spiral intensified with a contraction of 5.9% in Q1 2020 and 13.8% in Q2, the worst sequence ever recorded.

FRENCH GDP CHANGES

Some sectors have been harder hit, specifically in industry, those producing mobility equipment – such as aeronautics and automobiles. Within services, all sectors of the tourism ecosystem have been hardly hit – particularly transport, restaurants and accommodation, whose activity has historically evolved in strong correlation with overall economic activity.

ANNUAL CHANGES IN GDP AND REVENUE PER ROOM IN FRENCH HOTELS

A STRONGER THAN EXPECTED ECONOMIC REBOUND FOLLOWING THE EASING OF LOCKDOWN RESTRICTIONS

Faced with this unprecedented shock, the public authorities intervened massively and chose to protect household purchasing power as a priority. In this respect, a study³ published by the OFCE showed that, over the eight weeks of lockdown, “households and individual entrepreneurs (as well as the voluntary sector) suffered a loss of income of 14 billion euros⁴”. Nevertheless, this loss of household income was more than compensated by a drop in spending leading to a significant savings surplus (+75 billion euros as of July 5). In a context where the health situation has improved (lower number of hospitalizations and deaths, increase in tests, access to masks, etc.), a normalization of activity was achieved from May onwards. The Bank of France⁵’s economic survey, published on September 14, also underlined that, for the month of August, the loss of GDP over a typical week of activity was 5% compared to the pre-crisis level (compared to -27% in April).

ACTIVITY INDEX COMPARED TO PRE-CRISIS LEVELS (BANK OF FRANCE)

As in many developed countries, the normalization in activity levels, faster than initially expected, is mainly due to the rebound in household consumption of goods. In France, the latest figures from INSEE⁶ showed that in July 2020, “household consumption spending on goods increased slightly (+0.5% in volume compared to June) after a strong increase in May and June (+35.5% and +10.3% respectively)”. In this context, in July, household spending on goods almost returned to the level of November 2019.

FRANCE: HOUSEHOLD CONSUMPTION (IN BILLIONS OF EUROS, BY MONTH)

This phenomenon has been encouraged by the aforementioned accumulation of a savings surplus, by a catch-up effect that adds up to state aid intended to stimulate demand (particularly in the automobile sector⁷), and a desire to profit fully from the summer season, which was also reflected in tourism-related spending. France was able to benefit above all from the resilience of its domestic market, including with regards to its tourism industry. This facilitated its rebound relative to its neighbors, particularly those in Southern Europe (whose exports and tourism depend heavily on Northern European countries), but also those in Northern Europe (which are generally more internationally oriented). In July and August, France therefore took the lead in Europe in terms of the recovery of tourist numbers.

EUROPE: EFFECTIVE OCCUPANCY RATE⁸ OF HOTELS BETWEEN JUNE AND AUGUST 2020

THE ECONOMIC REBOUND BEGAN TO FALTER IN AUGUST

Economic activity continued to grow in August, but the pace of growth has slowed compared to previous months, as shown by the monthly composite index developed by Markit⁹, which reached 51.610 in August, a three-month low. Regarding the services sector, the report noted that “underlying data indicated that a rebound in the Hotel & Restaurants sub-sector was partially offset by declines in other areas, including Post & Telecommunications and Renting & Business Activities.”

Even when households were taking summer breaks, particularly in areas where resort tourism is important, the momentum slowed sharply during August.

SUMMER 2020: WEEKLY CHANGE IN HOTEL OCCUPANCY IN FRANCE

It even reversed at the end of the month, in response to renewed concern about the sanitary situation (particularly with the Bouches-du-Rhône and Paris regions becoming a “red zone”) and the sluggish demand observed by companies in many services’ sectors. At the same time, in the manufacturing sector, the Markit index fell back below the 50 threshold, indicating a contraction.

In this respect, we can assume that activity in the automotive sector has stagnated due to the decline in new car registrations. According to the Committee of French Automobile Manufacturers (CCFA), in August¹¹ the French market for new passenger cars fell by 19.8% in gross terms compared to August 2019. This decline is partly due to unfavorable base effects (solid basis for comparison in August 2019) but also reflects a backlash after the excellent figures in July, boosted by the end of the “cash for clunkers” scheme.

Even though the overall rebound in activity lost momentum in August, the positive base effect accumulated since the end of the second quarter still implies that French growth will spring back very strongly in the third quarter. More specifically, its rate of growth will be the highest ever recorded, and probably well above the average for the euro zone. In this context, the government should revise upwards its growth forecast for 2020, currently set at -11%. A figure close to the Bloomberg consensus (i.e. around -10%) seems appropriate to consider the potential turbulences that could occur in Q4.

FRENCH 2020 GDP

THE RISKS OF BUSINESS STAGNATION OR DOWNTURN ARE NUMEROUS FOR THE END OF THE YEAR

As illustrated by the decline in tourist activity since mid-August, we are entering a pivotal period where businesses will have to take the lead. This observation is equally valid for the hotel industry, where 65% of the annual turnover is generated during the week (Monday to Thursday), mainly by business customers, and for which September usually marks a peak in activity. This reality is reinforced by the recent evolution of the sanitary context, as France and some of its key territories are once again subject to restrictions (such as a fourteen-day mandatory isolation upon return) imposed by various European countries, such as the United Kingdom, Belgium or Germany. It should also be pointed out that national measures, which could go as far as a localized lockdown, would likely penalize activity very significantly. The risk would be greater if two of the regions that are currently most affected by the virus, namely PACA and Ile de France, were to be subject to restrictions.

Indeed, these regions account for more than 35% of national GDP and for more than half of the turnover of the hotel and restaurant industry. At the same time, even if the government decided to implement an ambitious €100 billion recovery plan, its new effects are not expected to be felt until 2021, which raises fears of a period of uncertainty for the end of the year. At the same time, numerous bankruptcies are already expected for the month of October. As Les Echos¹² pointed out, “since August 24, companies that cannot pay their invoices have 45 days to declare themselves in suspension of payments at the Commercial Court”, which should result in a rise in business failures starting in October. This phenomenon could then weigh on household morale and put a brake on consumption.

Finally, on a geopolitical level, the environment will be particularly unfavorable. Indeed, the latest negotiations between Europe and the United Kingdom suggest that the “Hard Brexit” scenario remains credible. On the other side of the Atlantic, the uncertainties surrounding the November 3 elections will increase, especially since various scenarios synonymous with instability of the international trade system cannot be ruled out. These factors, combined with a lack of visibility on the post-Covid recovery, could lead companies to delay their investments and hiring decisions, thus amplifying the phenomenon of stagnation or even relapse. The economy, as well, will have to fight against the risk of a second wave.

Source: https://hospitality-on.com/en/statistics-trends/france-less-pessimistic-outlook-2020-thanks-summer-season-caution-end-year

UNWTO Highlights Potential Of Domestic Tourism To Help Drive Economic Recovery In Destinations Worldwide

As restrictions on travel begin to ease globally, destinations around the world are focusing on growing domestic tourism, with many offering incentives to encourage people to explore their own countries. According to the World Tourism Organization (UNWTO), with domestic tourism set to return faster than international travel, this represents an opportunity for both developed and developing countries to recover from the social and economic impacts of the COVID-19 pandemic.

Recognizing the importance of domestic tourism, the United Nations specialized agency has released the third of its Tourism and COVID-19 Briefing Notes, -Understanding Domestic Tourism and Seizing its Opportunities.- UNWTO data shows that in 2018, around 9 billion domestic tourism trips were made worldwide – six times the number of international tourist arrivals (1.4 billion in 2018). The publication identifies ways in which destinations around the world are taking proactive steps to grow domestic tourism, from offering bonus holidays for workers to providing vouchers and other incentives to people travelling in their own countries.

Domestic tourism to drive recovery

UNWTO Secretary-General Zurab Pololikashvili said: “UNWTO expects domestic tourism to return faster and stronger than international travel. Given the size of domestic tourism, this will help many destinations recover from the economic impacts of the pandemic, while at the same time safeguarding jobs, protecting livelihoods and allowing the social benefits tourism offers to also return.”

The briefing note also shows that, in most destinations, domestic tourism generates higher revenues than international tourism. In OECD nations, domestic tourism accounts for 75% of total tourism expenditure, while in the European Union, domestic tourism expenditure is 1.8 times higher than inbound tourism expenditure. Globally, the largest domestic tourism markets in terms of expenditure are the United States with nearly US$ 1 trillion, Germany with US$ 249 billion, Japan US$ 201 billion, the United Kingdom with US$ 154 billion and Mexico with US$ 139 billion.

Initiatives to boost domestic tourism

Given the value of domestic tourism and current trends, increasing numbers of countries are taking steps to grow their markets, UNWTO reports. This new Briefing Note provides case studies of initiatives designed to stimulate domestic demand. These include initiatives focused on marketing and promotion as well as financial incentives. Examples of countries taking targeted steps to boost domestic tourist numbers include:

• In Italy, the Bonus Vacanze initiative offers families with incomes of up to EUR 40,000 contributions of up to EUR 500 to spend in domestic tourism accommodation.
• Malaysia allocated US$113 million worth of travel discount vouchers as well as personal tax relief of up to US$227 for expenditure related to domestic tourism.
• Costa Rica moved all holidays of 2020 and 2021 to Mondays for Costa Ricans to enjoy long weekends to travel domestically and to extend their stays.
• France launched the campaign #CetÉtéJeVisiteLaFrance (‘This Summer, I visit France’) highlighting the diversity of destinations across the country.
• Argentina announced the creation of an Observatory for Domestic Tourism to provide a better profile of Argentine tourists.
• Thailand will subsidize 5 million nights of hotel accommodation at 40% of normal room rates for up to five nights.

Source: https://www.hospitalitynet.org/news/4100617.html

Global tourism loses $320 billion in first five months of 2020, says UN

More than 120 million jobs at risk from pandemic

UNITED NATIONS (AP) — The tourism global industry has been devastated by the coronavirus pandemic, with $320 billion lost in exports in the first five months of the year and more than 120 million jobs at risk, the U.N. chief said Tuesday.

Secretary-General Antonio Guterres said in a policy briefing and video address that tourism is the third-largest export sector of the global economy, behind fuels and chemicals, and in 2019 it accounted for 7% of global trade.

“It employs one in every 10 people on Earth and provides livelihoods to hundreds of millions more,” he said.

In addition to boosting economies, “it allows people to experience some of the world’s cultural and natural riches and brings people closer to each other, highlighting our common humanity,” he said.

But the U.N. chief said that in the first five months of 2020, because of the pandemic, international tourist arrivals decreased by more than half and earnings plummeted.

Guterres said this has been a “major shock” for richer developed nations “but for developing countries, it is an emergency, particularly for many small island developing states and African countries.”

Tourism for some of those countries represents more than 20% of their GDP, he explained.

Sandra Carvao, the U.N. World Tourism Organization’s chief of market intelligence and competitiveness, said the $320 billion in lost exports from January through May is three times what was lost during the year 2009 at the height of the last global financial crisis.

And according to the policy briefing, “export revenues from tourism could fall by $910 billion to $1.2 trillion in 2020” and that “could reduce global GDP by 1.5% to 2.8%.”

In addition to tourism jobs that are at risk, the policy paper said jobs in associated sectors, including food service, that provide employment for 144 million workers worldwide are also at risk.

It stressed that small businesses, “are particularly vulnerable.”

Guterres said tourism “is also a key pillar for the conservation of natural and cultural heritage.”

According to the briefing, some 7% of world tourism relates to wildlife, “a segment growing by 3% annually.”

“The fall in revenues has led to increased poaching and habitat destruction in and around protected areas,” the secretary-general said, “and the closure of many World Heritage sites has deprived communities of vital livelihoods.”

Guterres called for the tourism sector to be rebuilt in a way that is safe for host communities, workers and travelers, and is also “equitable and climate friendly.”

Noting that travel restrictions and border closures still remain though some have been lifted, Carvao said “the recovery will be very much dependent on the evolution of the pandemic and the economic situation.”

“No country has escaped the impact of COVID on tourism,” she said. 

Source: https://www.marketwatch.com/story/global-tourism-loses-320-billion-in-first-five-months-of-2020-says-un-2020-08-25

Hotel industry facing historic wave of foreclosures

Vicky Karantzavelou / 20 Aug 2020

WASHINGTON – A new national report shows that the hotel industry is facing a historic wave of foreclosures as the COVID-19 pandemic continues to devastate small business hotel owners and its workforce. Since the beginning of the pandemic the hotel segment has faced a historic number of delinquencies and is the most heavily hit sector of the commercial mortgage-backed securities (CMBS) market. Nearly 4,000 hotel industry leaders sent an urgent letter to Congress urging immediate action to help hotels avoid foreclosure and the loss of tens of thousands of jobs.

The report, compiled by Trepp, shows that the percentage of loans that is 30 or more days delinquent is 23.4 percent as of last month—the highest percentage on record. By comparison, the percentage of hotel loans that were 30 or more days delinquent at the end of 2019 was 1.3 percent.

From a financial perspective, the report shows that $20.6 billion in hotel CMBS loans were 30 or more days delinquent as of July, compared to $1.15 billion as of December 2019. The highest volume of delinquent hotel loans during the Great Financial Crisis was $13.5 billion. The current percentage of loans that are delinquent now exceeds the highest level during the Great Financial Crisis by 53 percent.

In the letter sent to Congress today, nearly 4,000 hotel industry leaders implored Congress to swiftly enact the HOPE Act, bipartisan legislation introduced by Representatives Van Taylor (R-Texas), Al Lawson (D-Fla.), and Andy Barr (R-Ky.), intended to provide assistance to small businesses that operate in the ailing commercial real estate market.

“With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently. Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate,” stated Chip Rogers, President and CEO of the American Hotel & Lodging Association (AHLA). “The hotel industry strongly supports The HOPE Act to give struggling small business hotels an opportunity to keep their doors open and avoid foreclosure. We urge the immediate passage of this legislation so America’s tourism industry can survive and recover when the public health crisis subsides.”

Rogers said the HOPE Act would address the unique challenges of commercial real estate. It would provide commercial property owners the temporary liquidity they need to keep their doors open in exchange for a preferred equity interest in the property. The legislation would not require any new funding and would utilize existing appropriations from the CARES Act Economic Stabilization Fund.

Other major hotel industry leaders expressed an urgency for Congress to step up to help struggling hotel businesses before it is too late. 

“The economic fallout from the COVID-19 pandemic is decimating the travel and tourism sector – especially small businesses like hotels. That’s why we need Congress to provide hotel owners with real relief that addresses the needs of small businesses with commercial real estate assets,” said Cecil Staton, President and CEO of AAHOA. “Hoteliers are responsible for millions of jobs in communities across the nation, but unless Congress acts, there may not be businesses left for those workers to return to at the end of this pandemic. We are optimistic that the HOPE Act will help hoteliers to address the debt crisis facing the lodging industry, and save good American jobs and small businesses.”

“Our hotel industry has been devastated by the effects of COVID-19. The financial assistance through the HOPE Preferred Equity lending facility would provide relief and could help stimulate the economic situation in communities throughout the United States,” said Lynette Montoya, President and CEO of the Latino Hotel Association (LHA).

“The HOPE Act is essential in helping provide hotel owners with liquidity when we need it most and will serve to help keep businesses open, thus saving local jobs,” said Andy Ingraham, President and CEO of the National Association of Black Hotel Owners, Operators, and Developers (NABHOOD).

Source: https://www.traveldailynews.com/post/hotel-industry-facing-historic-wave-of-foreclosures

Atari Wants to Build Video Game-Themed Hotels

The first hotel will break ground later this year in Phoenix, Arizona. Another is being planned for Las Vegas. They promise to offer Atari-themed lodging, along with lots of video gaming experiences.

Michael Kan – January 28, 2020 

Atari Interactive thinks it has an idea to rekindle interest in the gaming brand: It wants to build Atari-themed hotels.

On Monday, the company announced it was partnering with a design agency to build at least eight video-gamed themed Atari Hotels in the US with the first one slated to break ground in Phoenix, Arizona later this year.

The idea is certainly unconventional, but Atari says the concept will connect with the public at a time when the market for gaming is exploding. Not only will the hotels provide Atari-themed lodging, but also lots of video gaming, including the latest VR and augmented reality experiences. In addition, some of the hotels will be designed to host esports events.

“Together we’ll build a space that will be much more than just a place to stay,” Atari CEO Fred Chesnais said in a statement. “Atari is an iconic global brand that resonates with people of all ages, countries, cultures and ethnic backgrounds and we cannot wait for our fans and their families to enjoy this new hotel concept.”

According to Atari, a design agency called GSD Group and movie producer Napoleon Smith III, who was behind the recent Teenage Mutant Ninja Turtles reboot films, will manage the hotels’ designs. Meanwhile, the Arizona-based real estate developer True North Studio will handle actual construction of the first building.

Additional hotels are planned for Las Vegas, San Francisco, Seattle, Chicago, Denver, Austin and San Jose. Interested customers can sign up at the Atarihotels.com website to stay up-to-date on the project.

In the meantime, Atari Interactive is preparing to launch a new retro-themed console. The Atari VCS is slated to start shipping in March starting at $249, and will let you play 100 classic pre-installed Atari games in addition to modern PC games.

Source: https://www.entrepreneur.com/article/345603

WTTC Estimates More Than 100 Million Travel Industry Job Losses

On a somber note, World Travel & Tourism Council (WTTC) research estimated that 100.8 million travel industry jobs could be lost in the wake of the coronavirus crisis.

More somber still, the 100.8 million figure increased by more than 30 percent in the last four weeks, according to the WTTC research, which noted that 75 million of those at-risk jobs are in the European Union’s Group of 20 (G20).

The WTTC research also revealed a serious escalation in economic loss to the world economy, rising from $2.1 trillion of gross domestic product (GDP) a month ago to $2.7 trillion today.

The havoc wrecked by the coronavirus has led the loss of more than 1 million jobs a day, WTTC said.

“This is a staggering and deeply worrying change in such a short time,” said WTTC President and CEO Gloria Guevara. “In just the last month alone, our research shows an increase of 25 million in the number of job losses in travel and tourism. The whole cycle of tourism is being wiped out by the pandemic.”

Broken down by region, the research found that potential job losses could reach 63.4 million, with a GDP loss of more $1 billion in Asia; 13 million job losses and a GDP loss of more than 700 billion in Europe; over 7 million job losses and a GDP loss of almost $53 billion in Africa; 14.1 million job losses with a GDP loss of nearly $800 billion in the Americas; 8.2 million job losses with a GDP loss of more than 680 billion in North America; 4.7 million in job losses with a GDP loss of nearly $84 billion in Latin America; $1.2 million in job losses with a GDP loss of upward of $26 billion in the Caribbean; and $2.6 million job losses with a GDP loss of more than $96 million in the Middle East.

“Travel and tourism is the backbone of the global economy,” Guevara said. “Without it, global economies will struggle to recover in any meaningful way and hundreds of millions of people will suffer enormous financial and mental damage for years to come.”

Source: https://www.travelpulse.com/news/impacting-travel/wttc-estimates-more-than-100-million-travel-industry-job-losses.html

Local leaders brainstorm on future economic development

KEY members of the TCI’s public and private sectors met to discuss the future of the financial services industry during the second annual Economic Conference last week.

The one-day national conference coordinated by InvestTCI brought scores of interested people to Beaches Resort and Spa in Providenciales. The seminar was held on Friday, November 8, and hosted under the theme, ‘Financial services – Building block of a strong, diversified economy’. During sessions, members of the private sector including bankers, lawyers, company managers, accountants, and Government officials debated various topics, ideas and strategies focused on the growth of the financial services sector.

The keynote address of the conference was delivered by international speaker Lorna Smith, former executive director of BVI Finance and founder and chief executive officer of LGS and Associates. Premier and Minister of Finance Sharlene Cartwright Robinson also brought remarks at the conference and zeroed-in on the Government’s role in fostering a successful industry.

She outlined ongoing initiatives and commitments already made by the Government to strengthen the sector.

“We see the financial services sector as an integral part of the country’s economic advancement,” she said, “where businesses and industries continually feed off of one another, growing larger and larger as the economy grows.

“It is a critical component of a diversified economy; creating a sustainable cycle of overall economic activity.” She stressed that an effective and efficient partnership between the financial services sector, public and private sector entities is vital to the expansion of the TCI’s economy. “The TCI has experienced a real GDP growth rate of 2.5 percent in 2018 and is expected to see a 3.2 percent growth rate in 2019.

“These targets are being achieved in the wake of two major storms in 2017. “Economic growth, for the most part, has been carried by the tourism and hospitality sector for the past 30 plus years.”

Cartwright Robinson underscored the importance of a diverse financial system. She said: “We are ever mindful that a country’s economic health should never be tied to a single industry or market sector. “This conference is an important platform that gathered leading industry players in the financial services sector, the Government and its ministries, departments and agencies, as well as other service providers in the various sectors of the economy.

“We are able to share, learn and collaborate toward the enhancement and advancement of the financial services ecosystem of the TCI, and to ensure that it is one that engenders growth,” the premier added.

In 2018, a Government report prepared by an international consultancy team concluded that the TCI needed to diversify its economy and create more good quality professional employment opportunities for its citizens.
The report also recommended a need for substantial investment in the TCI’s financial services industry, and highlighted how easily the territory could lose what little it has. Following the report, the Government took several steps in keeping with the recommendations of the study.

Source: https://tcweeklynews.com/local-leaders-brainstorm-on-future-economic-development-p10138-127.htm

Why AI-Powered Hotel Revenue Management Is Taking The Hospitality Industry By Storm

Automation has become the driving force in the evolution of revenue management. Leveraging advances in artificial intelligence and machine learning, the best of today’s solutions make pricing decisions and rate updates automatically. This allows revenue managers to focus their time on tactics and strategy rather than spending it crunching data and punching numbers into spreadsheets. The speed and complexity of the pricing decisions, and financial outcomes they generally produce, are unmatched by the most seasoned revenue manager using the most advanced solutions on the market only a few years ago. Such has been the blindingly rapid pace of technology innovation.

The ability to integrate new sources of data has also played a key role in driving smarter pricing decisions. Advanced revenue management solutions leverage not only the repository of historic data that resides in a hotel’s property management system, but also, in many cases, a vast array of market intelligence and other data, from competitor rates data to booking trends data. This makes it possible to more accurately forecast demand, and, as a result, increase hotel revenue and profitability in unprecedented ways.

That being the case, it’s no surprise that next-generation, AI-powered revenue management has taken the industry by storm. Some of the leading AI-powered solutions, often replacing legacy solutions that use a hands-on, rules-based approach for generating pricing decisions, now automatically generate in excess of a 100 million decisions across tens of thousands of properties each day. The results are impressive, with major hotel brands seeing their revenue numbers increase by millions of dollars a year. Smaller properties, too, are seeing substantial gains, in some cases driving incremental sales lift by more than 15 percent.

Interestingly, AI-powered solutions sometimes produce pricing decisions that revenue managers may view as overly aggressive, irrational, or just plain wrong. Therein lies the power of big data and machine learning compared to the data processing and analytical capabilities of mere mortals. Even the most experienced revenue managers report that they have sold rates recommended by AI-enabled solutions that they would not have published in the past.

AI-powered revenue management is all about smart pricing. It’s about using demand forecasts, competitor rates, and price sensitivities — while taking into account any number of other inputs, including demand drivers like seasonality, special event dates, and day-of-week differences —to maximize room occupancy at the best possible price. Smart pricing also means considering other factors, such as the type of room, the length of stay, and the extent to which a discounted price promotion could potentially dilute revenue and profits in the long run. The combinatorial complexities involved in smart pricing are nothing to sneeze at.

Smart pricing is channel agnostic. Rather than thinking in terms of “OTA booking versus direct booking,” for example, smart pricing considers the relative value of all distribution channels, weighing how much each channel drives guest room demand and will help achieve the overriding objective, which is to maximize the profitability of hotel inventory. Smart pricing calculates demand from all sources, including OTAs. In an ideal world, algorithms then automatically apply the right tactics and strategy to funnel business through the most profitable channels.

The goal of maximizing profitability holds true not only for guest rooms but also for other property assets and revenue sources. Banquet and event function space, in particular, now increasingly factors into the equation. According to “The 2019 Global Meetings Forecast,” published by American Express, demand for function space was expected to grow by 3.2% this year. For some hotels, function space revenue now accounts for almost half of their total revenue. It only stands to reason, then, that hotels would be eager to apply revenue management strategies to their group sales and catering activities.

Total revenue management, as this bigger-picture approach to revenue optimization is often called, takes into account a guest’s potential spend on recreational facilities, restaurants, spas, and various other ancillary revenue streams when making pricing decisions. For hotels with casino operations, even the “theoretical loss” (the amount of money a specific category of player can be expected to lose during their stay) should ideally factor into guest room and group sales pricing decisions.

Empowering a hotel with the ability to make smart pricing decisions in an automated fashion makes the business case for investing in an AI-powered revenue management solution compelling. It is compelling in terms of driving increased profitability. It is also compelling in terms of averting potential revenue loss that can result when a hotel fails to maximize occupancy or, worse, experiences a loss in occupancy. Consider: A mere $2 reduction in the ADR for a 500-room hotel with a 75 percent occupancy rate would cost it more than a quarter million dollars in lost profit in a single year.

Other benefits abound. The business intelligence gleaned from the reporting capabilities, for example, can help improve sales effectiveness, generate competitive intelligence, and provide valuable insights into occupancy trends, guest demographics, market positioning, and channel profitability. A marketing department can use the forecasts as a guide for determining when to increase promotional spend to spur demand. An operations team can know when to increase (or decrease) staffing based on projected occupancy. In short, the benefits tend to go well beyond the department known as “revenue management,” ultimately transcending all parts of the organization.

Source: https://www.hotelnewsresource.com/article107444.html

How Brexit Went So Wrong: A Crisis Of Leadership

To quote Shakespeare, the past 3 years of UK politics have been “A Comedy of Errors.” Former prime minister Theresa May endured repeated humiliations as Parliament rejected her Brexit deal with Europe. Boris Johnson has hardly fared better. Despite declaring he would “rather be dead in a ditch” than request another Brexit extension, last week Johnson, still very much alive, was forced to ask Brussels for precisely that. Johnson’s continued theatrics raise a deeper question. How did Brexit go so wrong? In short, Britain has experienced a catastrophic leadership failure. 

Prepare to fail

From the outset, Brexit was plagued by an utter lack of planning. Former PM David Cameron, who agreed to the referendum to please his anti-EU allies, never believed it could succeed. Indeed, Cameron even ordered the Foreign Office not to prepare a contingency in case that nation decided to leave the EU. 

During the campaign, remarkably little attention was paid to the logistics of how Britain would decouple from Europe. Instead, “Leave” leaders made emotional appeals about immigrants and exaggerated claims about future health funding. Instead of preparing for hard policy decisions, these leaders clung to a nebulous and naïve vision of Brexit. 

For all the talk of a “better deal” for Britain, leaders apparently forgot that Europe had every incentive to put the screws to the UK. Europe would also demand that Britain discharge its existing commitments to the EU. The rosy picture the Leave campaign painted contrasted sharply with the tough situation British negotiators experienced in Brussels. Not only did unrealistic expectations create a trust gap with the British public, but the lack of planning created political divisions that have weakened the British negotiating position. Instead of articulating a clear exit plan beforehand, the British government appears to be improvising its most important decisions. 

Self-inflicted wounds

Negotiating a complex set of economic and legal arrangements between Britain and Europe was never going to be easy. However, Britain’s leadership has made the process significantly more difficult. Much of the current gridlock originated with two disastrous decisions in 2017. The first of these was the decision to trigger Article 50 and begin the two-year countdown to leave the EU. When the Brexit deal proved more contentious than expected, Britain was forced to scramble to meet this self-imposed deadline. Then recognizing the impossibility of reaching a deal in time, Theresa May’s government twice had to go to Brussels to request an extension. Now Johnson has requested a third extension, further hurting the credibility of British leadership. 

The second mistake of May’s government was calling a snap election in June 2017. Hoping to strengthen their hand, the ruling Conservatives expected to increase their parliamentary majority. Instead, the vote boomeranged on them, and they were forced into a coalition with the Northern Irish DUP to maintain power. Tied to their minority coalition partner, the Conservatives lost control of Brexit. Instead of being able to negotiate a “Conservative” Brexit deal, they needed a deal that pleased the DUP too. Aspects of a DUP-approved deal were opposed by some Conservatives, killing May’s efforts to deliver Brexit and exacerbating nasty divisions within the Conservative party.

Loss of faith

Britain’s leaders worsened an already challenging situation by losing the confidence of their people. Before the vote, the hyperbolic and sometimes downright violent rhetoric of campaigners increased national polarization. After the vote, the government’s disorganization and apparent unpreparedness to deliver Brexit further eroded the electorate’s trust. The ongoing spectacle of threats and ultimatums seems likely to alienate people further.

Instead of leading, leadership has resorted to political games. Particularly notable was Boris Johnson’s attempt to suspend Parliament for several weeks to limit their opportunity to review the latest Brexit deal. Not only did Johnson manage to spark outrage across the political spectrum, but he also was rebuked by Britain’s Supreme Court. Parliament responded with escalation, pushing a requirement that Britain could not leave the EU without a deal. Dysfunctional politics are hurting Britain’s institutions at home and its standing abroad. 

“Remain” or “Leave”, there is no denying that Brexit has been terribly managed. Leadership failures have reduced British politics to a farce and Brexit to a punchline.   

Source: https://www.forbes.com/sites/davidcarlin/2019/10/28/how-brexit-went-so-wrong-a-crisis-of-leadership/#41a25961d159