Corona Clear Certificates vital for Travel

The UK Government has already ordered 3.5 million Corona Test kits, to allow self-testing of whether people have already had the Corona Virus and have developed the IMG/IGG antibodies, that hopefully indicate immunity to re-infection. At the moment nobody can be 100% sure such immunity does exist, but all experts believe this is likely to be the case.

The Government will need to support these test, with a formal and centralised registry, that issues “Corona Clear Certificates” and this may require positive tests to be ratified in a similar way to passports, by teachers or qualified accountants etc, since medically trained staff are likely to remain fully deployed elsewhere.

These certificates will initially be vital for identifying the element of the population that already have had the disease and have enough immunity to allow them back to work. It’s obviously vital to get the economy moving again, with most experts hopeful that this can occur after the peak of infections has passed and some semblance of control has returned to the NHS.

However, the travel industry needs to accept that opening boarders to allow leisure travel is likely to remain a relatively low priority for most countries.

Boarder where originally shut down as part of the “containment” stage, where Governments try to restrict the entry of the virus into their countries, from other infected countries.

Once the virus has got a hold in a country, it is then “locked down” to try to smooth out the peak of infections, to allow medical services like the NHS to cope.

Some travel observers have predicted the opening of boarders as soon as the peak has passed, as the closure does little to slow the spread of the disease at this stage, compared to the banning of mass gathering or local gatherings in pubs etc. 

I personally think there will be a much longer delay as international Governments are likely to insist on an accredited “Corona Clear Certificate” for foreign visitors, before they will be allowed entry to the country. These certificates will be used in conjunction with passports, but are likely to be issued via electronic means, so they can be scanned from mobile phones.

These certificates are also likely to form part of airlines APIS systems, since like Visa’s the airlines will be made responsible for checking customers have the required paper work to enter a country, before boarding.

Therefore, the industry via ABTA and other trade bodies needs to be lobbying hard to make sure they are included in any Corona Clear Certificate planning, so that all airlines and travel companies can adjust their systems during the quite shut down period, long before the first buds of travel start to blossom again.

I remain optimistic that the good times will return to travel, but feel that we need to take our destiny into our own hands and actively work on the removal of any potential barrier to the resumption of travel now.

The Government needs to legislate compulsory flight and holiday deferral

In times of crisis, people often ask “What can the Government do to save jobs”.

In the current Corona crisis, that is set to decimate the travel industry, the answer in my opinion is simple.

Allow airlines and travel companies, to make it compulsory for customers to defer holidays, until the Corona Virus has receded and normal travel can be resumed. This clause will only apply if FCO advice is not to travel to a county for a period and airlines are forced to stop flying, just as Jet2 have to Spain today.

Unfortunately, we live in a “Selfish World” and consumer left to their own devices, will demand full refunds under the package travel regulations or process recharges via credit card companies, under non delivery of products rules. Who can blame them, if these are the rules that apply.

However, the impact of this will send many travel companies and Airlines bankrupt. Airlines like British Airways are already going to suffer massive losses, due to having to ground aircraft and the difficulty in scaling back staff numbers fast enough. The bigger you are in a crisis, the more likely you are to go bust, so please don’t believe having a major brand is any form of safe guards.

Having to refund the millions of customers who have booked, but cannot travel for a period that could amount to months, will simply send airlines and travel companies bust.

The only solution therefore is for the Government to change regulations, to permit airlines and travel companies to mandatorily defer flight and holidays. They can then tell customers that they have to choose new dates for their holidays either next year, which is the safest solution or for later in the year.

The customer would still get the holiday they booked and paid for, but just a later date. Obviously, companies would have to waive all amendment fees and take the administrative burden of rebooking at no cost, but I can guarantee that every travel company I know would agree to this.

The alternative is wholesale collapses and an ATOL fund that has been so depleted by the Thomas Cook collapse, that it could not cope, forcing further Government funding.

Some customers may not be happy with this deal, but most would accept it as being fair and reasonable in these exception circumstances, if it saves jobs and keeps airlines alive. The alternative is fewer players and much higher flight/holiday prices when we come out of the other side of the Corona pandemic.

In a crisis cash is king and sorry customers, but we need to retain your cash for a while in order to survive.

10 things to consider to ride out the Corona Virus downturn.

Like most industry observers I think Corona Virus has been massively overhyped and much of the current down turn in sales is media induced, since for most people the heath impact of the Virus will be minimal. However, the impact on travel business is real and unlikely to go away.

Having worked in the industry during 9:11, the gulf war and 2008 financial crisis, the current Corona Virus worries me more as its impossible to predict the length of the impact, so in my opinion its definatly time to baton down the hatch’s. All businesses are different, but here are 10 actions I’d recommend people consider.

  1. Cut overheads by 20%-30% immediately.

Unfortunately, the easiest cut is often staff. Every business I have ever worked with has a layer of “Fat”, that is only dealt with in a down turn. Cutting staff forces a business to become more efficient, by either using new technology or by stopping work that has no real benefit. Once you have cut staff this drastically, every working practice gets revisited and staff simple don’t have time to “do it the way it’s always been done”. I know readers may not want to hear this, but business survival is crucial for the 70% of staff left and bluntly some jobs are better than none.

  • Implement 4 day week and homeworking.

It’s important to keep key staff so you can expand again once the crisis recedes and to manage the business through tough times. However, these people are often your most expensive resource.

Moving to a 4 days week and giving key staff an extra day off a work a week, greatly softens the 20% wage cut you need them to take. Maybe get them in a room as ask “which one of you do you want me to get rid of, as if you don’t all agree to take the pain equally, that’s my only choice.” Setting up full homeworking capabilities using Zoom or Google hang outs video conferencing is also a must. We have to assume that major cities will be shut down making homeworking capabilities a necessity for virtually all businesses.

  • Stop ALL IT spend immediately.

Businesses need to worry about today and not tomorrow in a crisis. If it works now, don’t try to fix it! Expenditure on IT is often one of the major cost of a business and of course some expenditure will be locked in contractually with third parties, but most can be post postponed.

  • Marketing.

Cut back to the essentials that drive 60% of your current traffic. Cancel any above the line TV, radio etc and focus on immediate calls to action, which have the lowest cost. Google advertising costs should fall as companies cut back, but I’m not convinced google will allow this easily, so it needs to be driven by players cutting back bid terms aggressively.

  • Chasing every lead and maximizes margins per booking

With less leads, its vital to increase conversion. In a shop or online, its vital that every lead gets chased down. Within shops this may involve implementing further data gathering and a 100% follow up procedure, either by phone or email. Similarly, in call centres a target of 1-2 call backs per inbound call might be a sensible metric, whilst online players may increase their remarketing targets using social media like Facebook. Maximising margins by yielding higher and upselling Ancillaries is probably also a good idea is a slow market.

  • Removing reasons not to book.

Customers will clearly be worried about booking at the moment, in case they need to cancel their holiday because of an outbreak of Corona Virus in their holiday destination. Tour operators and retailers dynamically packaging are acting as principals and will be responsible for refunding customers, if FCO advice is changed to tell customers can not travel to a destination, so why not make this 100% clear? Offering Travel Insurance that also covers medical costs will provide reassurance whilst also providing increased revenue per sale.

  • Reduce the “Principal Risk”

Tour operators and retailers dynamically packaging are acting as principals and will be responsible for refunding customers if FCO advice is changed to say customers can not travel to a destination. A dynamically packaging retailers should be booking all low cost carrier flights via virtual cards, so that if a flight is cancelled they can recharge all bookings via their virtual card provider for non-delivery of product. All hotel accommodation needs to be booked on a payment on arrival basis, with all use of non-cancellable or pre-paid rooms stopped. This will reduce cancelation loses to lost margin, which is painful enough, but not as deadly as a full agent funded refund.

  • Cut the number of Suppliers.

In times of reduced demand, it’s important to cut the number of suppliers you have and work more closely with a smaller number who you can negotiate better payment terms or over rides with. The more fixed assets a level of the travel chain has, the more they will be feeling the pain. For example, Hoteliers will be desperate to fill rooms and will offer lower rates and/or higher commissions. Make sure your business benefits.

  • Manage cash brutally.

Revised forecasts for trading 15,30 or 50% down are required, with a realism level about cancellation. What you thought was in the bag, may not be for long. Every business needs to ensure that they stock pile cash as much as possible

For retailers this may involve scraping low deposits and bringing final balance payment dates earlier, however Trust funds often mean this consumer cash cannot be used, mitigating any benefit. Similarly, low cost carriers are not going to allow booking without full payment, but hotel partners may be forced to take later payment if demand is switchable.

  1. Renegotiate everything.

In times of crises, the 20 biggest expenses need to be reviewed and if at all possible “renegotiated”. For example, will a high street landlord give a “rent holiday” rather than losing a tenant, they are unlikely to be able to replace in the short term. The same applies to office rents, equipment rental and all third party contracts. It may even be time to negotiate a delay in payment of rates to the local councils. Just remember having something is better than nothing to most suppliers, when they are unlikely to be able to resale the assets your using.

Travel Insurance can’t counter the coronavirus downturn, but it can help with conversion

Travel insurance is not a cure for the many issues facing travel companies, but it might be a useful tool in pushing a hesitant booker over the line, says Steve Endacott

Many customers are worried about booking holidays, in case an outbreak of coronavirus in their holiday destination puts their health at risk or forces them to cancel their holiday. Google is already reporting a 25% drop in holiday searches.

We all know that the current media hype is an overreaction to a disease that has a death rate no higher than the average flu, but unlike the flu we currently have no natural immunity or treatment for it. Unless you are old, have pre-existing medical conditions or underlying health issues, coronavirus is unlikely to kill you, but will make you ill and bed bound for a short period of time. Obviously, not something you want to happen on holiday.

The problem with the current media coverage for the travel industry, is it’s highlighting the quarantine risk, of being caught on a “plagued ship” or a “plagued hotel” for two weeks, ruining your holiday experience. In real terms, this risk is infinitesimal, however it’s the one being placed forefront in most travellers’ minds and in my opinion, doing the most damage to demand.

The other major perceived risk is that travelling via airports is high risk, because of the mingling of people from multiple destinations, increasing the risk of spreading the virus. I have to confess to walking slightly faster past people with an Italian accent at Heathrow recently.

Some people also believe that close proximity and recycled air on aircraft make them havens for the disease, even though little documented evidence of this exists.

While we don’t have outbreaks of coronavirus in the UK, the fear of travelling to a destination like Tenerife, where just one hotel is affected, is obviously intensified and bookings have dropped like a stone.

Like most people, when I’m ill, I’d rather be at home with access to my local doctor or NHS hospital if anything escalates. Therefore, I’m likely to avoid booking a holiday to a destination with coronavirus as I’d rather suffer at home than overseas.

So it’s easy to see why holiday searches have dropped by 25% and unfortunately how things could get worse.

However, what happens when, inevitably, it does reach the UK and you are just as likely to get infected at home as abroad? The answer I’m hoping is that the dam will break and a lot of people take the ‘it’s only the flu’ approach and continue to travel on holiday.

Travel insurance is not a cure for any of the issues above, but can be a useful tool in pushing a hesitant booker over the line.

Holiday insurance companies are still offering cover to destinations currently unaffected by coronavirus and would allow you to cancel and get your money back, provided the Foreign and Commonwealth Office does not advise against travel.

So today customers who have already booked holidays to Tenerife, are able to take out insurance. Put more bluntly, customers would be mad not to immediately make the most of this opportunity, as it’s one of the few times customers can still get insurance for a known issue, before it escalates.

I’m sure insurers will quickly tighten restrictions for destinations where the virus has been found and may even push up premiums, so I’d advise people with existing holiday bookings to act fast, while reading the small print of their insurance policy to ensure they will be covered.

Given a 25% drop in searches, it will not be long before tour operators and airlines are forced to drop prices to stimulate demand. Very soon we will be seeing some real holiday bargains being presented to customers.

If these are combined with the sale of a travel insurance policy that guarantees customers their money back in the case of the FCO advising not to travel to a destination, or in the unfortunate case a customer does get ill on holiday, then I personally might be persuaded to continue with my plans and book my usual summer holiday.

Travel insurance is never going to drive demand, but it may help with conversion!