Due to the sudden and global outbreak of the coronavirus pandemic, several countries around the world have imposed entry bans, quarantines and other kinds of restrictions for citizens and travellers to the most affected regions or areas. Some other countries, however, have imposed global prohibitions and restrictions applying to all foreign countries and also ban their citizens from travelling abroad for the time being.

This, in addition to the reduced enthusiasm for travel, the coronavirus pandemic had a massive negative economic impact on travel agencies. The envisioned impact of COVID-19 on the travel industry is thought to possibly be long-term as there’s been a drastic decrease in business travels and international programmes and continued rise in virtual communication, meetings and conferences.

Although some countries are still actively battling this virus and trying to contain it, there’s been a relaxation of bans and restrictions. This relaxation of bans has given room for most industries to re-strategize, rebuild, and recover from the pandemic. The travel sector is one of the most affected sectors is still recovering, and the recovery process may be more complicated than it appears.

Several agencies were significantly hit, but some were able to re-strategize early and gain from the pandemic. However, most weren’t and were left reduced to an almost extinct level, while a few others were permanently shut down.

The Impact of COVID-19 on Travel Agencies

Travel Agencies are one of the most lucrative businesses in the travel and tourism industry. These agencies serve as ticket sales outlets, help to book flights, assist customers with necessary information on flight bookings and reservation, share information about new airline innovations through the media, and also promote airline businesses through advertisements and campaigns.

Note that, airline businesses are sponsoring several of these agencies. However, most of them are paid a specific commission for flights booked, and the tickets bought. This varies from airline to airline and also the travel agencies involved. Since the airlines were greatly affected, it is only expected that the travel agencies also took a massive hit. Some impacts the pandemic had on these agencies include:

Massive Loss of Revenue

Due to the pandemic, several trips were brought to a halt, tickets and bookings cancelled, and several refunds made. Most domestic and even international airlines had to cancel flights as a result of the drastic quarantine measure implemented and also because of the lack of airline passengers due to the rising fear.

According to Phocuswire  Booking Holdings saw its gross travel bookings drop to $12.4 billion in the first quarter of 2020 – a massive number, but a whopping 51% less than it was one year earlier ($25.4 billion).

As part of the stabilization efforts, Fogel says Booking Holdings has halted stock buybacks, dramatically reduced marketing spending – the first-quarter figure was $851 million compared to $1.2 billion a year earlier.

Based on research conducted recently, it was discovered that only about 40% of travellers rebooked flights to their original destinations with the ease of restriction. However, about 46% were put at a halt pending the return to normalcy.

From this research, it is obvious to conclude that, at the start of the pandemic, several trips were rescheduled, flights cancelled, and million dollars’ worth of revenue lost. In most agencies, there were drastic declines in ticket sales and reservations made majorly for international flights and even domestic flights also.

Loss of Jobs

Although there was an all-round increase in unemployment, the majority of it seems to have been in the travel industry; as it was one of the most affected sectors during the pandemic. This was because of the massive and rapid cancellation of flight tickets, reservations, and even hotel bookings, which in turn resulted in negative economic impact. Most individuals with jobs within the travel agency were relieved of their employment and rendered jobless. This also applied to several other workforces within the travel industry who were in charge of logistical planning.

Booking.com its workforce by up to 25 Percent: Despite the deep job cuts, Booking Holdings has far greater long-term strength than rivals Expedia Group. If you follow Booking.com’s logic, the future of travel will be substantially smaller than its past

While most of the travel agencies laying down their employee’s local startup in Lithuania is looking for engineers to build first of its kind digital travel agent. Suzie aims to provide digital travel agent services across the world, and in the current scene of social distancing, this makes a lot of sense.

How Travel Agencies Pivoted Earnings despite the Pandemic

With the COVID-19 pandemic, it was expected that the activities and businesses of travel agencies would come to a sudden halt. Several of them did, but a few managed to create strategic ways to keep income flowing and the business growing. A few agencies came with new ways to make changes to adapt to the novel coronavirus pandemic. Some of the innovative ideas of travel agency during this time include:

Online Social Gatherings

The travelling company, FTLO travel (For the Love of Travel) took great advantage of the pandemic to serve their customers better. They were able to create and organize paid online social media gatherings with international travellers all over the world. These gatherings consisted of travel-themed trivia nights and other fun online programs and activities. This way, they kept their customers busy, retained clientele, and also attracted new customers, while generating some income too.

As bans and restrictions were gradually eased, this agency successfully provided short “weekender series” trips for solo travellers and travel credit for postponed trips. Based on previously built customer trust and confidence, you can guess that most customers took advantage of these offers.

Retention of Old Clients

While most travel agencies tried to find ways to adapt to the COVID-19 pandemic, some others utilized this period to retain customers and stay in business. Once the travel bans and restrictions were put in place, some travel agencies intensified and focused their advertising to already existing customers. This was the primary focus, as opposed to investing in advertising and marketing their service to prospective customers.

The provided existing clients with information about the coronavirus pandemic and how they can stay safe. Although this may not have gained them more money, these agencies were able to spend less on advertising while keeping their clients in their space.

Many of their advertisements and marketing strategies, mostly focused on improving customer relationships and trust, rather than starting from scratch. This way, these agencies were able to secure future trips post-pandemic and also trips booked pending when the travel ban was lifted in their respective countries. Travel Agencies such as the Ultimate All-inclusive travel agency took great advantage of this opportunity.

Business Diversification

Several travelling agencies took it as a better idea to diversify. That is, some travel agencies successfully kept their business while investing in new business opportunities in other industries. This way, they can maintain focus on their business goals without having to go bankrupt in the process.

These business opportunities are closely examined to determine their profitability and see their compatibility with the travel sector when it resumes fully.

Domestic Trips

Several travel agencies offered less international trips and more domestic trips depending on the country or region, and the travel restrictions implemented. This is because interstate and region ban restrictions were lifted first. Trips were organized to more exciting and eventful places within the country in smaller and private groups also.

Virtual Traveling and Touring Experience from Home

There are travel agencies partnered with the tourism industry to provide existing and new customers with paid virtual travelling and touring experiences.

Through this medium, travellers and tourists from all over the world were taken on tours showing tourist attractions and more, virtually. Through this virtual experience, individuals were taught about the history and culture of tourist areas, and how to prepare local dishes, sing local songs, and engage in other exciting activities. These agencies used this as leverage to prepare for the post-restriction tours and travels.

Through the virtual travel and touring experience, promotions were done for newly added tours. Using this medium, travel agencies informed customers and prospects of their strictness with recommended social distance guidelines and government regulations. This was done to increase travels and tours once restriction bans were eased strategically. It was also a strategy to gain new clientele.

The Future of Travel Agencies after the Pandemic

The travel sector took a massive negative economic hit during the pandemic and is yet to recover. It is expected that recovery would be slow and quite tricky. However, the future of travel agencies post-pandemic is now solely dependent on the length and severity of the pandemic and the worldwide economic crisis and how fast the world can recover from it.

As a result of the economic impact on the industry, we expect to see changes in the travel behaviour of individuals locally and globally.

A rapid increase in domestic trips may be recorded, as international trips are still not as free as they used to be due to the pandemic. This would be acceptable to most individuals since the majority consider a vacation and would do just fine in other states within their countries.

Also, a drastic reduction in international trips may be recorded as every important meeting and conferences have now gone virtual. In addition to the decrease in business trips, other activities like schooling and shopping are also going virtual, thereby reducing the need for travel.

With the increased rate of unemployment and slash in salaries, it is only expected that more people would be unable to make domestic or international trips. Funding is a fundamental necessity when travelling, and the coronavirus pandemic has affected the finances of many. Due to the foreseen reduction in travels not just due to the restrictions, but also other factors such as funding, travelling agencies may be dealing with recovery for years. However, if travelling becomes a safer and affordable option, with time, the travel industry may likely bounce back and even do better.

Conclusion

There is a growing need for travel agencies to re-strategize and prepare for a bumpy ride in the next few years. The COVID-19 has done more harm to the travel industry than it has too many other industries. In addition to the worldwide negative economic impact, the economic impact on the travel industry is massive and will not be easy to adjust to.

Although many travel agencies are gradually adapting to the pandemic and the implemented quarantine guidelines, several others have been permanently shut down due to economic inadequacies. Also, several others are headed towards extinction as there’s been less and less need for individuals to take trips.

However, this is not the end for travel agencies; it is only a bumpy ride. These agencies can take advantage of the virtual space to reach out to, and learn about their prospective customers. This way, they can learn valuable lessons on the new behavioural patterns concerning travels and adapt to them.