Facing the hard reality of future international travel
Like many of my travel industry colleagues, I have been keeping a close eye on the rise of COVID-19 across the globe. As we are well aware, Europe and the USA are taking a beating at the moment with new COVID-19 infections hitting record levels over the past few days.
As someone whose life has revolved around corporate travel for over 20 years, I’ve been seriously contemplating how and when international travel is likely to resume and what it means for organisation and travellers looking to the future in light of the pandemic.
Australia vs The World
With Australia reporting less than 15 new cases daily (bringing us down to less than 1 infection per 100,000 people), expect the Australian Federal and State governments to be very selective about who we allow into the country, especially if travellers are coming from known hotspots like Europe and the USA.
As of Monday 9 November, the USA is reporting an infection rate of 40 infections per 100k people and Europe’s infection rate is ranging from 19 (Denmark) to 102 infections per 100k people (Czech Republic). What’s alarming for these two regions though, is the rate at which the virus is spreading throughout the population.
In the past seven days, COVID-19 infection rates in the USA have increased by 51%. This is in part because the management of COVID-19 has itself become very political. In many states, measures to control the virus are virtually non-existent and that’s unlikely to change until well into the New Year.
In contrast, infection rates in countries such as Singapore, Vietnam and Taiwan have flattened to less than 20 cases a day and are on a much more similar trajectory to Australia.
The hurdles to overseas travel for Australians
For Australians wanting to head overseas, there are multiple hurdles to overcome. The Federal Government has already flagged tight controls on Australia’s borders until 2022. This would include requiring an exemption from the Department of Home Affairs for any travel outside of Australia. Any easing of travel restrictions is likely to prioritise official and business travel, similar to the “green lane” arrangements Singapore is rolling out with select countries.
Hotel quarantine measures will also remain in place for some time, especially for people returning from high-risk countries. This will act as a significant deterrent for a lot of people wanting to head overseas and return to Australia as the time required to quarantine and the subsequent costs will prove prohibitive for most travellers.
Travel insurance will also be a major issue for a significant number of travellers. Insurance companies have excluded COVID-19 related claims from their policies, leaving travellers on their own if their travel is impacted by the virus.
Recently, Covermore New Zealand announced Covid-19 specific benefits for New Zealand residents travelling within New Zealand and to Australia. However, this very specific coverage is indicative of the risk COVID-19 poses to insurance companies, and it’s unlikely any policies will offer travellers broad protection against COVID-19 any time soon.
This will leave most organisations with the option of self-insuring. This will be a very risky strategy, especially if you’re sending travellers into known COVID-19 hotspots like Europe and the USA as the cost to treat a hospitalized COVID-19 patient in the USA ranges from USD 30,000 to USD 75,000 — not a small amount for companies to consider when doing their cost/benefit analysis of sending employees overseas.
When is travel likely to get back to normal?
It’s unlikely we will be able to control the virus by locking down cities and countries around the world. The political and economical ramifications will simply not allow it, despite plenty of evidence from countries like Australia, China and New Zealand who have benefitted from moving quickly and decisively to control the spread of the virus.
The big breakthrough will be the release of a vaccination and I expect there are a lot of countries banking on this to reopen their borders. Pfizer’s announcement earlier this week of 90% efficacy for its mRNA vaccine was cause for celebration, especially amongst the travel industry.
However, despite the positive result, it’s still likely to take at least 12 to 18 months to get a critical mass of the population vaccinated so it’s effective against the virus.
Countries that act quickly and decisively will reap the benefits allowing domestic travel to continue, and the possibility of exchanging travellers with other countries that also have the virus until control. However, this is likely to be only a few select countries or regions throughout the world, including Pacific countries and parts of Asia.
So when are we going to get to travel again? If all goes well over Christmas and we managed to keep a lid on the virus, expect domestic travel to ramp up in early 2021. Don’t expect it to come at a rush as budgets will be tight, airfares higher than normal, and schedules limited as airlines will take time to get their services back online.
Unfortunately, we don’t expect to be boarding a flight to the USA and Europe anytime soon, in fact, it’s looking like 2022 will be the first chance for most of us.
Our best options are going to be ‘travel bubbles’ with other COVID-19 safe countries, including New Zealand in early 2021 and parts of Asia, including Singapore, China, Taiwan, Japan, South Korea and Vietnam in the second half of 2021, subject to keeping a lid on new infections.
