CONSEQUENCES OF COVID-19
Our observations on how COVID-19 has affected markets and firms in the industry.
Visitor Arrivals By Countries (2020)
Since the outbreak of the virus in late January, Asian countries have closed their borders, reducing tourism and business activities between said countries; moreover, residents returning to their own countries are required to self-isolate for 14 days.
The majority of South-east Asia countries experienced a fall in visitor arrivals since February. The drop is significant in March and April (over 80% compared with 2019). Some even had 0 visitors in April.
TRAVEL TECH COMPANIES PIVOTING TO CATER FOR COVID-19
CASE STUDY 1
CASE STUDY 2
CASE STUDY 3
Major ASEAN Countries & Cities
International air travel will continue to be volatile:
It is highly unlikely to return to pre-pandemic levels in 2020 as fears of flying remain an ongoing concern.
Brian Pearce, chief economist for IATA expects a slight recovery in the second half of 2020.
Bookable seat capacity has reduced to 62% of normal capacity despite an average breakeven capacity of 77%
Amid low demand, it is difficult for airlines to raise prices despite their lower seat capacity - double the reason for concern.
We predict that it will not be until 2023-2024 that air travel make a full recovery to pre-pandemic levels.
CONSUMER BEHAVIOR AND OPPORTUNITIES
Forecasting the behavioral changes of consumers due to the pandemic, paired with opportunities which will arise as a result of said changes.
CHANGES IN PREFERENCES
We believe that travelers will evolve to value both privacy and hygiene.
In a post-COVID environment, there will be a natural fear of crowds and being within close proximity of others. Furthermore, with the likely continuation of social distancing into the future; traditional, large group traveling becomes less feasible.
Privacy and the option to travel in small groups therefore becomes more important.
Furthermore, travelers will instinctively be concerned with hygiene, both in maintaining their own sanitation and the condition of the places which they travel to.
Aspects of the industry which we believe, while untapped in the past will emerge as a result of COVID-19.