Why Travel is harder now
We would all like to think we can get back to "normal" in a post-COVID world, but for some businesses it has not happened, and in fact is getting harder not easier. Travel is one of those businesses. Since the pandemic we have had multiple restrictions put in place using various methods by various jurisdictions. Those measures, mostly aimed at slowing the spread of the virus, have had dramatic effects on how airports, airlines and associated businesses operate. And it has varied widely by jurisdiction.
For example in the United States, they were among the first countries to restrict travel but among the first to lift the restrictions domestically. Latest statistics released by the BTS show June traffic was down 17% from pre-COVID levels domestically but still down 45% on International flights. These are significant declines but not even close to the declines seen in Canada.
Canada's July passenger volumes were down roughly 70% from 2019 levels, with International travel down well over 90%. And, that was an improvement from June, so the trend is headed in the right direction however the base is so low its difficult to get too excited about it just yet.
To use an example of how difficult the changes in passenger volumes have made operating airports and airlines, imagine you had a coffee shop business that was built to sell $1000 a day in coffee and food. Your staff cost $300, your coffee/food costs were $250, your rent was $150, your debt to pay off the building of the shop was $150, and your utilities and insurance were $50. You made a profit of $100 each day, and with that were able to survive and make a living for your family.
Then COVID hit and your sales suddenly dropped to $200 a day. You laid off your staff suddenly and ran the store yourself, but you still had to pay $70 a day in food cost, $150 in debt payments, $50 in utilities and rent of $150. Your daily loss would go to $220 a day. And let's say you had savings of $10,000. In 45 days you'd be bankrupt by keeping the doors open. If you chose to close the shop, you would still be bankrupt in 30 days without rent relief from your landlord, debt relief from your bank, and concessions from your utility providers.
One could argue that airports and airlines have access to liquidity to weather such an event much better, which is certainly true. However we are now in month 19 of this change, and all the relief, and all the debt is accumulating. So at what point do you need to return to "normal" in order to continue?
Unfortunately airports and airlines operate with much less flexibility than a coffee shop - we cannot close our doors. We are built for volume. We have sprawling capital investments that need to maintained, and have complex, intricate systems and processes to drive operations every day. Complex labor allocations are based on scheduling, and significantly capital intensive businesses keep them constantly requiring reinvestment. So for businesses set up in such a way there's little surprise travel industry businesses have struggled greatly over the past 18 months. However, the real challenge now is how can we adapt to the dramatic return of the passenger now?
The Return has been rough so far
Since July we have seen dramatic increases in passenger volumes. Driven by domestic leisure travelers, who seem less patient, less tolerant and less apt to forgive those working for airlines and supporting businesses. We have seen a wave of negative comments, complaints and some isolated incidences of complete loss of self control and outright rage - the people coming back to travel are tense and under immense pressure. And it's no surprise - the passengers are feeling anxiety over travel after being away from it so long. Perhaps they haven't seen their grand kids for 2 years, or their mother since Christmas 2019. We can all relate. But they are also putting great pressure on the people working on the other side of the counter.
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The people behind the counter, flying the plane, on the flight crew, managing the bags, directing passenger flow, providing you a rental car, supporting those with access needs or those serving your burger at the airport restaurant are all feeling the same pressure as you the passenger. But the difference is they must put on their game face and show strength for you, and support you through the process. We can't forget how important those people are to the travel business - and we need to thank them more.
Baggage has been a particular pain point. Stories of bags taking 3x the regular time are not uncommon. But why? In a word, staff. The ground handlers who manage bags for you at each airport have struggled to get staff back. You recall the example of the coffee shop? Well imagine you laid off your staff and when you called them back they were no longer willing to return, for whatever reason - whether it be finding other work or unwilling to return until government payments run out. You would be stuck training new people who don't know how to make coffee - and for ground handlers that is exactly what they are seeing. Some cases cited show up to 50% of staff don't make it past training. It's not easy work. It's hard work.
Passenger flow, security and customs have become another significant pain point. For any Canadians having travelled abroad recently you know how painful the current process is. Not the least of which is getting a test abroad before returning and after returning. The tests abroad can run $250 USD or more. If you'd like to learn more about the fun see the link below:
We are hopeful this process gets more streamlined and made consistent with other countries to provide standards that everyone can easily understand, and execute without so many steps.
The Next Chapter of Travel
Much like 9/11, this event will make permanent changes to travel. The measures currently in place will surely change and evolve, but the controls of testing and vaccination will not go away. The requirements for free movement will become more stringent and as a result a portion of the public will simply not return to frequent travel. This is where our industry really needs to balance safety with passenger experience. We need to spend more time and energy engineering processes that are streamlined, efficient and effective on delivering a safe but enjoyable travel experience.
Currently the process design has been solely focused on command and control to drive safety. But as we evolve this recovery I hope that more thought is given to how we can make it easier for the passenger. Otherwise we will risk losing customers permanently. Back to the coffee shop example - would your customers return to buying coffee at your shop if you needed them to go through multiple steps to enter your shop, buy your coffee and track them in order to come back the next time? Or would they just drink coffee at home?
We need to remember we are in the hospitality business and we need to make it easy for our customers as much as possible. Yes we need safety. But we also need to challenge ourselves to be creative in delivering that safety in a better passenger experience.
Look forward to hearing others' thoughts on this.
Owner at Vin Room
3 年Great post Tim. I think it's fair to say we have to all adjust to the new normal as consumers, businesses, and most importantly, a reminder to be kind. From coffee shops, airports, airlines and employees, everyone is learning how to adapt to the new normal and a little kindness goes a long way.
Unlocking Loyalty Solutions & Ecosystem @ Riyadh Air | Transforming Customer Loyalty, Engagement & Digital Experience | Product & Program Management | Strategy, Innovation, Data & Technology Enablement | A-CSPO?
3 年IMHO, the future of travel calls for a complete rejig of the customer journey - not only at the airport, but holistically. Technology can facilitate to unlock the rejig, so long as we are willing to adapt and open to adoption. A lot of improvements can be explored to significantly ease the workload of airport check-in staff (including baggage), however the underlying cost is something that will have to be also factored in. In summary, its about identifying the pain areas and exploring a different approach / perspective to doing things that'll boost customer confidence in travel and provide everyone (including staff) the much required peace of mind during the journey.
Manager of User Experience at Canada Post / Postes Canada
3 年Designing customer experience within the constraints of security, safety and business needs is a tough one. But there are ways to to do it.
Sales Specialist, Certified Cicerone?
3 年Good read Tim, thought-provoking and a great reminder to 'us' passengers the airline industry needs our support as it finds its way in this new world.
CEO Canada Arizona Business Council (CABC)
3 年Tim very well written,we will all have to adapt to the new normal,travel will not be taken for granted for a while. Businesses have adapted using the internet with new forms of meetings(not in person) which will be a hit to the industry.Tourism I believe is going to grow back people need to get away.People need to understand travel is not fast food anymore we are back to chef type meals