Reimagining the US$9 trillion tourism economy
A new article from consulting firm McKinsey & Co. explores four ways in which governments can reimagine their role in the tourism sector in the context of COVID-19. Reopening tourism-related businesses and managing their recovery in a way that is safe, attractive for tourists and economically viable will require coordination at a level not seen before, McKinsey suggests. As borders start reopening and interest in leisure rebounds in some regions, governments could take the opportunity to rethink their role within tourism.
Indian Hotels Co. Q1: Revenue fell 86% year-over-year
Severely hit by the COVID-19 pandemic, Tata Group-backed Indian Hotels Co. (IHCL) posted an 86% drop in revenue from operations for the quarter ended June 30. The New Delhi-based hotel company said the business of the group in India and international markets has been severely impacted during the quarter on account of the pandemic and “softer” revenues due to the lockdown. Management has secured additional financing for the next 12 months to prevent disruption of operating cash flows and to enable the group to meet its debts and obligations as they fall due.
How is Mexico faring?
Horwath HTL released a new report on the current state of the Mexican economy, the tourism sector and the evolution of variables that are influencing the hotel investment market amid the COVID-19 pandemic. During 2019, Mexico was ranked seventh in the world in the number of international tourists; tourism accounted for an 8.7% share of the Mexican GDP in 2018. Key findings from the report include:
- The behavior of U.S. dollar-Mexican peso parity could result in a relevant competitiveness gain for the region
- The tourism sector will not return to 2019 levels until the end of 2022
- Mexico’s GDP will likely experience a decline of 8.3% during 2020
- There are no concrete countercyclical policies that incentivize a faster recuperation of the tourism industry
Morocco aid program for tourism workers
Moroccan officials signed a new strategic plan for the tourism sector that aims to maintain jobs and allow the country to adapt to new industry realities. Qualifying employees in Morocco’s tourism sector, including hotel operators, tour guides and transporters, will receive a monthly stipend of MAD 2,000 ($216) from July through December this year. The plan also extends some income tax exemptions and a loan moratorium.
U.K. performance up slightly, occupancy improved
Each week, STR analysts provide a deep-dive video update into U.K. hotel performance. Key highlights from the most recent video, addressing performance for the week of July 27 through August 2, include:
- Occupancy has improved slightly week over week for five consecutive weeks
- ADR was down 30% year over year, but that percentage change softened from the previous week
- All days of the week are seeing occupancy growth, with Friday and Saturday seeing the largest increases
- Bournemouth saw the highest occupancy level for the week (82%), followed by Plymouth (80%). London, however, saw the lowest occupancy level (25%)
Oyo’s online sanitization course
Industry body FICCI and hospitality firm Oyo have developed an online training and certification course specifically for the hospitality industry. The course will focus on redesigning the sanitization protocols and minimizing person-to-person contact. The course will help budget, mid-segment and boutique hotels and homestays in India as well as hospitality professionals to maintain and improve their safety and hygiene standards in line with government and industry benchmarks.
Market testing the hotel of tomorrow
Chicago-based hospitality design and development firm The Gettys Group has launched a global think tank to envision the hospitality industry through COVID-19 and beyond. Since its inception in June, the 325-member group, which calls their think tank The Hotel of Tomorrow, has developed hundreds of ideas and is now inviting travelers, designers and more to join them in the final stage of concept development: consumer testing.