The COVID-19 pandemic has been the single most disruptive force that the modern-day hospitality and travel industry has ever witnessed. Writer Sarah Sax examines the impact.
It was mid-January when Jamie Barys, the Shanghai-based CEO and founder of UnTour Food Tours, became concerned about a novel coronavirus that had appeared in the city of Wuhan a month previously. At first, it seemed like the virus would be contained to the city of 11 million in the province of Hubei, though its spread and origin were still unknown. More concerning to Barys was the timing: the outbreak in Wuhan appeared just weeks before Chinese New Year was set to begin on January 25. Barys likens the holiday to “Thanksgiving, Christmas, and the Fourth of July all at the same time.” Hundreds of millions of people travel all over the country to visit their families.
So Barys was both relieved and somewhat surprised when, on January 23, the government locked down the province of Hubei. “No one ever thought that they would be able to lock down an entire province that quickly,” said Barys. “But in the end, it turned out to be the right thing to do.”
As she does every year over the holidays, Barys shut down her food tour business, which she started a decade ago, and headed to the U.S. with her husband.
“No one ever thought that they would be able to lock down an entire province that quickly.”
Barys never would have suspected just how different the world would be by the time she returned. When she arrived in Hong Kong on March 16, the virus, which had become known as COVID-19, had already torn through Hubei province, killing thousands, and was causing outbreaks in Italy, Iran, and the U.S. The Chinese government closed the country’s borders to foreigners a day after Barys got back to Shanghai on March 27, out of fear of reintroducing the virus that was now sweeping the world. Barys was forced to quarantine at home for two weeks, with a nurse in full hazmat gear coming twice a day to check temperatures. By the time she was ready to get back to business, business as she knew it had been turned upside down.
“International customers previously made up about eighty-five percent of my customer base,” she said. “Now they are all gone, and we don’t know when they will be coming back.” Instead of doing 25 tours a week in multiple cities, she is averaging about a dozen a month and has pivoted to focusing on expat communities and companies in China, organizing new tours to suit her new clientele.
“Now [my international customers] are all gone, and we don’t know when they will be coming back.”
While Wuhan officially recorded around 4,000 deaths from the novel coronavirus, the rest of China was relatively unaffected—as of May, Shanghai had a few hundred cases and only seven deaths, although exact numbers vary depending on the source.
As for the future, Barys said that “it’s all just so up in the air at this point. I think that is the hardest part—it is just the biggest uncertainty.”
While Barys was adjusting to a new reality in China, Europe, and the U.S. had just begun to grapple with their own outbreaks.
Florin Ionescu is a tour guide and owns a small travel agency in Sibiu, Transylvania. He remembers his last tour with three Australian women distinctly. It was on March 9, the day after the Italian government put the entire Lombardy region—16 million people—into quarantine following a surge of deaths and thousands of new cases. “I remember that we were all kind of freaked out and using hand sanitizer every time we touched something that may have been touched by someone else,” Ionescu recalled. The women were planning to continue on to Bulgaria for several more weeks. “A few days later, we exchanged messages on WhatsApp, and they told me they had cancelled the trip and returned back home,” he said.
The day of Ionescu’s last tour will go down as the week much of the world woke up to the severity of the crisis. On March 12, in response to the U.S. imposing a travel ban on parts of Europe, the European Commission president Ursula von der Leyen stated, “Certain controls may be justified, but general travel bans are not seen as being the most effective by the World Health Organization.” And yet, less than a week later, the E.U. passed the most significant travel limit in its history—a ban on all nonessential travel by non-E.U. nationals, stretching from Portugal to Finland, for 30 days.
“My worst-case scenario was a conflict at the borders of Romania [or] an economic crisis.”
That same week, other politicians across the world had been debating whether or not to escalate measures in response to the virus. But by midweek, the W.H.O. had declared the novel coronavirus a pandemic. A few days later, the U.S. and several European nations had declared states of emergency. Museums, cafes, restaurants, and all nonessential shops around the world fell like dominos; the MET, MOMA, Guggenheim, and Whitney in New York closed temporarily, as well as the Prado, Reina Sofía, and Thyssen-Bornemisza in Spain. The Stedelijk Museum closed its doors in Amsterdam, followed by the Louvre and the Palace of Versailles in France; all of Berlin’s state museums followed. A week later, India’s Minister for Culture and Tourism shuttered nearly 3,700 monuments and museums across the country, including the Taj Mahal. In Cape Town, the newly opened South African Zeitz MOCAA also heeded the call for shutdown.
By March 25, the entire country of Romania was on lockdown. People were only able to go outside for shopping near their homes or for work. All the people who were traveling back to Romania were quarantined or isolated, depending on the country they were coming from. The pandemic hit the tourism industry especially hard: hotels, travel agencies, people who were renting their homes on Airbnb, and restaurants lost almost their entire base overnight. Ionescu experienced a 100 percent drop in his revenues for the peak season.
Right now he is in the process of promoting tours for the Romanian market, but there is still a lot of uncertainty. “I never imagined a pandemic like this would happen. My worst-case scenario was a conflict at the borders of Romania,” he said, “[or] an economic crisis.”
By the end of March most of Europe had been shut down. The travel and hospitality industry had entered freefall.
“The emergence of COVID-19 completely changed the scene—it changed everything,” said Ingrid Koeck, an Austrian who moved to Portugal in 2014 and now runs Torel Boutiques, a collection of five luxury guesthouses and hotels. “We started to get the first cancellations in mid-February, here and there.” In response, she started taking preventative measures like putting out masks and gloves for guests. “We didn’t know what would come, but nobody did,” she said. By the time Portugal declared a state of emergency on March 19, all of Koeck’s reservations had been cancelled, and the picturesque, lively city of Porto, usually bustling with a mix of tourists, students, artists, and businesspeople at this time of year, was suddenly turned into what she called “a spooky ghost town.”
Throughout the lockdown, Torel Boutiques kept two of their hotels open for doctors and nurses who had to travel, and for pilots or other people on business. “It was important to not close the hotel as a symbolic gesture, not just for us but for our staff,” said Koeck. Even still, they had around five percent of their usual business at the end of March and beginning of April, and were forced to furlough many of their employees.
“It was important to not close the hotel as a symbolic gesture.”
For Portugal, as for many other countries, this has been an economic disaster. “The tourism boom in Portugal only really started five or six years ago. Portugal had just had new elections, and was just getting out of an almost 10-year economic recession,” Koeck said. The country benefited from and invested in the tourism boom. Now, the pandemic “has really shown how much [Portugal, and Porto in particular,] depends on tourism. I’m talking about the taxi drivers, hotels, restaurants, city guides, boats, translators, you name it. Many people depend on it now for getting bread on the table.”
Santiago de Compostela, Spain
José Manuel Caneda Mareque, a bilingual taxi operator just across the border from Koeck in Santiago de Compostela, Spain, has felt the financial squeeze of lockdown acutely. One of the cruel ironies of the COVID-19 pandemic was that European lockdowns coincided with what was supposed to be a spectacular tourism season in Spain. For the last few years, Santiago de Compostela, the alleged burial site of the biblical apostle St. James and the final destination of the Camino de Santiago pilgrimage route, has been welcoming record-breaking numbers of tourists. This year, “the government was expecting 400,000 people,” said Caneda Mareque. But two weeks before the holy week, which starts on March 28 and is widely recognized as the kickoff of the tourism season in Spain, the country declared a state of emergency.
“Everything started to fall after that,” said Caneda Mareque. “Tour agencies have really crashed. Tour guides don’t know how it is going to go on. It’s all gone, no? There are a lot of businesses that are going to close. Two months without any income—that’s a lot.”
“One of the fastest-growing markets for us was the U.S., and now, suddenly, it has completely crashed.”
While the government of Spain is talking about a July 15 reopening, Caneda Mareque recognizes that the impacts of the pandemic on people’s trust in airfare, transportation, and hotels, as well as the broader economic impact, will be felt for years. “One of the fastest-growing markets for us was the U.S., and now, suddenly, it has completely crashed.”
By April 6, four months after the virus was first reported in China, more than a million people had been infected, and over 50,000 had died. Over 95 percent of all worldwide destinations had introduced travel restrictions in response to the pandemic. U.N. World Tourism Organization Secretary-General Zurab Pololikashvili claimed that “COVID-19 has impacted travel and tourism like no other event before in history.”
Ambergris Caye, Belize
For more remote areas almost exclusively dependent on tourism, the pandemic was that much more devastating. Lara Goldman, a U.S. expat who built a successful wedding and tour service—Romantic Travel Belize, on Ambergris Caye, where she has lived since 2006—saw her entire summer bookings slashed when the country went into lockdown on March 23. The island, which was named the “best island in the world” in 2013 by Tripadvisor, boasts limestone caves, tropical rainforests, and white sandy beaches, all in close proximity to the world’s second-largest coral reef. “When people think of a tropical island vacation,” Goldman said, “we are it.”
But for an island that doesn’t grow much more than coconuts, the impact of the lockdown was felt immediately. On March 19, airlines started calling tourists still on the island, asking them to immediately return to the mainland to make sure they got flights home. Many workers left, boat transport services stopped, and grocery shops closed. “Within a week, we had food banks,” said Goldman. “People initially weren’t even thinking about businesses; we were thinking about making sure everyone had food and supplies.”
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Belize has also seen extraordinary tourism growth in the past five years. “You couldn’t even speak about ‘seasons’ anymore, in the traditional sense—we had tourists all year round,” said Goldman. But now, “a whole lot of those new restaurants and businesses have lost all of their money. I’m guessing that 90 percent of anything on Tripadvisor is now obsolete, because they are all done, they are all gone.”
Now, she said, there is nothing they can do but wait. The U.S. typically makes up around three-quarters of the business on the island, and she expects it will take years for the airlines to fully recover. The U.N. World Tourism Organization suggests that international tourism could fall up to 80% in 2020.
Chetan Kapoor, the cofounder and chief strategy officer of a boutique travel consulting company called Videc, said the economic fallout from the COVID-19 pandemic has been unprecedented. “What we have seen is the market going from a little dip to falling down a cliff,” he said.
“I’m guessing that 90 percent of anything on Tripadvisor is now obsolete, because they are all done, they are all gone.“
Kapoor’s company tracked 559 different travel companies and found that 8% shuttered completely due to the pandemic. But perhaps the larger impact has been on the millions of people that work in the travel and hospitality industry. Between those companies surveyed, over a million staff members had been furloughed and more than 400,000 had lost their jobs.
Globally, the economic figures are even more striking. The International Air Transport Association estimates that 25 million aviation jobs could be cut and the World Travel & Tourism Council predicts that 100 million travel and tourism jobs could be lost.
Alex Costin, a 22-year-old photographer who lives in Yorkshire, in the northern U.K., was working two hospitality jobs when the pandemic hit. They were anxious about the virus early on—with a history of asthma, they feared they could be more susceptible to COVID-19. Once everything went into lockdown, they were laid off from both their jobs and, along with millions of other workers, had to navigate a complicated bureaucracy of unemployment, sick leave, and furlough payments. “I think a lot of people are quite angry,” Costin said. “It seems like a lot of companies are keeping people in the dark, there is no concrete information. Companies don’t seem to want to be transparent about how they are calculating payments.”
Costin, who had plans to immigrate to the U.S. to join their partner at the end of the year, has put their plans on hold. At the time of this writing, the U.K. has tentatively announced it will begin opening hotels and restaurants at the beginning of July, and this has Costin worried: “It seems way too early considering how late we locked down—our rates and deaths haven’t gone down, they have just plateaued.” Costin faces the same dilemma as millions of other workers around the world: To earn money, they must expose themselves to the virus. “If I choose not to go back to work, I would be [financially] cut off completely. But I am going to have to go back to a workplace where I don’t know if I am going to be allowed PPE just to serve people drinks. It just seems… wrong.”
“I am going to have to go back to a workplace where I don’t know if I am going to be allowed PPE just to serve people drinks.
According to Videc’s Chetan Kapoor, for many workers in the hospitality industry the worst may still be to come. “One of the biggest impacts of the pandemic has been on the workforce,” he said. “Airlines have made statements that if the situation doesn’t improve, they are just waiting for September and October until they do another round of layoffs.”
New Orleans, Louisiana, U.S.
International tourism isn’t the only sector that has been severely impacted. Dan Davis, the “wine guy” (his official title) at one of New Orleans’s classic establishments, Commander’s Palace, didn’t mince words about the impact that the pandemic has had on the restaurant industry: “[It] is unfathomable. This is likely to change the face of restaurants in America forever.”
A self-described news junkie, Davis started becoming concerned about the pandemic in January. By the beginning of March, the management team was putting contingency plans on paper and having significant discussions around worst-case scenarios. He remembers March 16 vividly, the day the mayor of New Orleans called for a citywide shutdown. “That was such an eerie day,” said Davis. “I was the last one out that night, and locking up the place, not knowing when we would be able to open again, was absolutely surreal.”
Like most restaurants, Commander’s Palace furloughed hundreds of staff members and tried to pivot quickly. “We conceived of, executed, and closed about eight different business models within the span of about two weeks,” said Davis, landing on a business model that “we had sworn we would never do as a company: to-go and delivery. And it was profitable. It was well-received. People were gung-ho about it.” But with COVID-19 cases steeply rising in New Orleans, more and more people became concerned. Toward the end of March and beginning of April, a surge of new cases caused widespread fear that the hospital system would reach capacity. People were still working in the kitchens at Commander’s Palace. “No one wanted to say ‘I’m not comfortable coming to work,’” said Davis. “But once someone said it, it became the consensus. And regardless of any potential money we would lose, we didn’t want to endanger our people.” So at the beginning of April, Commander’s Palace ceased all operations.
“Locking up the place, not knowing when we would be able to open again, was absolutely surreal.”
As of the end of April, they have resumed business again. A weekly “wine and cheese” night, with pairing experts calling in to Zoom from around the world, regularly attracts over a thousand guests. But the financial loss for restaurants, which already often operate on razor-thin margins, has been profound. “A lot of restaurants aren’t coming back after this,” Davis said. “A lot of my colleagues are going to come out of this without gainful employment.”
As of late June, more than 2.5 million people in the United States have been infected, and over 125,000 have died. And the coronavirus is still spreading, with a new epicenter in Latin America, and increasing numbers in India also causing concern. Some countries, however, have stabilized and are beginning to take steps toward a controlled form of reopening: The E.U. began lifting travel restrictions at the end of May, and a “new normal” has started to prevail in places like Germany, where Plexiglas has been erected between tables at beer halls and standard practice now includes leaving your number behind to be accessible for contact tracing.
“If there is no cure and no vaccine by this time next year, will we still be in business?”
Davis is less optimistic about a full recovery in the U.S. “Frankly,” he said, “there is such a sense of foreboding. If there is no cure and no vaccine by this time next year, will we still be in business? I don’t know if we will.”
While the full impact of COVID-19 on the travel and hospitality industry will take years to fully understand, almost everybody agrees: It stopped the world as we know it. And what starting up again looks like is anybody’s guess.