Social distancing will cause large declines in tourism demand, the focus will be on domestic tourism and the measures countries are introducing include vouchers for delaying instead of cancelling paid arrangements and cutting VAT in tourism and the hospitality sector, a conference heard on Thursday.
The virtual conference on tourism prospects in light of COVID-19 was held by the American Chamber of Commerce in Croatia, the Czech Republic, Montenegro, Slovenia and Greece, AmCham Croatia said in a press release, adding that 100 representatives of the business community and government participated.
AmCham Croatia director Andrea Doko Jelusic said the uncertain unfolding of the health situation, keeping jobs in tourism and the challenges tourism companies were facing in attracting guests prompted a discussion on tourism's new reality in the time after the coronavirus shock.
Sinisa Topalovic of Horwath HTL said the pandemic had already impacted the world's capital markets, causing GDP declines in leading economies and slowing the flow of goods and industrial production.
Social distancing will remain in force until the spread of the virus has been put under control and it will result in a 60-90% decline in tourism demand and high dependence on domestic markets, he said.
It is estimated that tourism companies will lose US$11.5 billion globally, the hotel and airline industries have suffered big losses, and the hospitality sector has lost 100% of its revenues in record time, he said.
Recovery will consist of individual travel and individual business travel, while group travel will recover more slowly, he added.
The state secretary at the Croatian Tourism Ministry, Tonci Glavina, said tourism accounted for 20% of Croatia's GDP and that special measures were being prepared for the sector.
CzechTourism executive director Jan Herget said the Czech Republic had just approved a voucher law under which travel arrangements were delayed, not cancelled, to help tourism companies with cash flow.
Like Austria, the Czech Republic is thinking about cutting VAT for the hotel and hospitality sectors from 15% to 10%, he said, adding that the tourism community had shifted its focus to domestic tourism.
The state secretary at the Montenegrin Tourism Ministry, Damir Davidovic, said all bookings for April and May had been cancelled and warned about pressure on prices. He too underlined the importance on focusing on domestic tourism.
Marjan Beltram, executive director for tourism and mobility services at Nomago, pointed out that the Slovenian tourism and transport sectors had been reduced to a minimum in a very short time following the coronavirus outbreak in Italy.
Employers were forced to use the "waiting for work" institute which guarantees the payment of the 80% of workers' salaries, provided by the state, which has turned out to be a great measure, he emphasised, adding that the Slovenian government was also working on a package of sectoral measures which also include vouchers.
Andreas Stylianopoulos, executive director at the Greek Navigator company, estimated that the process of recovery would not be easy, especially in connection with cruise tourism, considering the fact that the future of all companies, and especially cruise companies, was uncertain, and their survival was under question.
Business models will inevitably change, given that the model of travelling itself is changing for health reasons. Our mode of work up to now is no longer applicable, we must discover the model that will be sustainable in the coming period, he said.
Kai Dieckmann, director-general of Regent Porto Montenegro, pointed out that one must learn from the current situation, and prepare for similar future events.
We should still value quality over quantity, that is, a drastic cut in hotel accommodation prices at the expense of occupancy rates is not a long term solution for the current losses in the hotel industry. Introducing high sanitary standards in hotels, improving the air conditioning system, creating innovative forms of accommodation, such as "luxury quarantine", these are some of the specific measures that are already being implemented and that will become even more important in the hotel industry, he emphasised. (Hina)
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