Adrian Loveridge Column – Coronavirus Uncertainty
Perhaps the single biggest challenge to our ‘local’ tourism industry is the uncertainty that the Coronavirus brings with it. Many airlines that service Barbados have sensibly implemented a no-change fee, subject to various conditions, some more generous than others, which allows those booking in a restricted time window to change flight dates without financial penalties.
Likewise, an increasing number of tour operators have adopted a similar policy.
At this time, it has to be the most responsible policy to adopt. There is absolutely no mileage into forcing people who have already booked and made a substantial economic commitment, to travel at a time they feel threatened, whether that perception is realistic or not. This is especially concerning to our more mature visitors, who understandably feel substantially more at risk. It’s already a difficult time for the airlines with the ongoing Boeing B737 MAX problems, not looking even remotely likely to re-enter service until very late this year.
Perhaps, at least partially mitigating this situation is the dramatic fall in oil prices, reaching the lowest per barrel prices for nearly 30 years and reflected in the one third lower cost of aviation fuel over the last year (source: IATA).
The next ‘moral conundrum’ stance that these airlines will be forced to make is for all those passengers who have booked and paid for tickets outside the newly revised Coronavirus conditions and whether people already holding confirmed flights will actually ‘risk’ travelling. In my case, I am due to travel across the Atlantic within the next two weeks. Do we simply ‘write-off’ the cost of the tickets if the involved airline refuses to transfer to a later date, or does the carrier gain our valuable onward brand loyalty by allowing changes? Under current rules air carriers are allowed to cancel and exempt from paying compensation up to 14 days prior to travel.
For our policymakers, this scenario is close to a nightmare.
Damned if you do, or damned if you don’t, while I honestly believe they are doing all that they reasonably can, given the fact, that frankly, none of us know how the ultimate sequence of events are going to develop. Likewise for our hotels and other accommodation providers, do they adopt a carry-forward stance without forfeiture, where confirmed guests having paid deposits are allowed to re-book for a later date?
Obviously, there is a real net cost to our tourism partners here, as you cannot sell an empty room twice, to compensate for the loss, but there is a much better chance of retaining that guest with good faith for a future stay. That certainly was the approach that worked for our small hotel in previous occasions, where there was no tangible element to apportion blame and liability.
Whatever the end game, it is inevitable that there will be negative fiscal consequences for the country and I am sure that our planners at the highest level are currently implementing mitigating measures, to possibly minimize this level of potential damage.
Government might even consider speeding up the essential revision of taxes and levies on tourism, which will help make our offerings more affordable to a domestic market, that are now also faced with dwindling overseas travel options.