Are We Heading for a Perfect Storm of Travel Troubles This Winter?

There have been a lot of gloomy reports in the mainstream press of late. It’s hard to avoid the constant stream of negativity as labour shortages, inflation, rocketing energy prices and strikes take their toll on the global economy. But the travel industry is particularly susceptible to these problems, leaving us having to ask the question: “how bad could things get?”

To answer this question we need to look at how the industry has been performing to date and then address the current and forthcoming difficulties.

The Travel Sector’s Recovery to Date

After more than two years of severe upheaval in the travel industry due to the devastating impact of COVID-19 and the strict restrictions it ushered in, as we previously reported, there have been encouraging signs of better than expected recovery. Demand blew up despite warnings of consumers and businesses alike feeling the pinch with many western countries in economic turmoil as they see soaring inflation and challenging economic conditions.

Japanese investment bank Nomura has predicted that 2023 will see countries in the Eurozone, the US, UK, Japan, South Korea and Canada all enter recession. Whilst they may yet be proven wrong, it’s very difficult to imagine all these economies avoiding what seems inevitable further turmoil. Therefore the recovery seems set to be sadly short lived.

Inflation and Soaring Costs

Capacity outstripping demand will always push up prices and the travel industry, both for business and consumer, has seen phenomenal demand at a time when total capacity, particularly in aviation, has been restricted compared to its previous peaks. This is due to a combination of factors including the inevitable hangover from post-Covid recovery, continued staff shortages and the wider economic picture.

Soaring fuel costs, due in no small part to the ongoing war in Ukraine, have also had a knock on effect on all transportation methods. Even where more economical electric trains aren’t as susceptible to spikes in fuel costs as airlines are, the higher demand for rail journeys as flight fares increase means lack of capaxcity has again become a problem.

Strikes and Labour Shortages

Cancellations and delays at airports, railway stations and ferry terminals are now commonplace around Europe as the travel industry (just like many industries) struggles with chronic labour shortages at the same time as seeing a surge in industrial action. The UK in particular has been badly hit due to the twin-impact of the post-pandemic workforce being smaller as fewer people returned to work after the enforced break of lockdowns and the Brexit effect of driving out EU immigrants.

Combine this with striking workers struggling with the cost of living at railway companies, airports and seaports and it’s easy to see why newspapers are labelling this the “summer of discontent” which shows little sign of getting better as Autumn and Winter draw in.

London’s Gatwick Airport saw over 4,000 flights cancelled over the summer, whilst reliability on the railways was the worst it has been since records began. Europe’s busiest airport, Heathrow, has had to cap total daily passenger numbers for at least until the end of the year.

It’s not much better in mainland Europe either with walkouts on Dutch railways and German airports in recent months, plus forthcoming strikes for staff at Ryanair and easyJet disrupting travel in Spain.

The Potential Return of Pandemic Restrictions

Sadly Covid hasn’t gone away and we know from experience that spikes in infections in the winter months can be drivers of increased restrictions on travel and freedom of movement. Naturally we should be confident of being in a better position to ride out future coronavirus waves thanks to the vaccination efforts and a better understanding of the virus today, but we still can’t rule out new variations causing panic.

In fact it is the threat of borders being closed once more that is perhaps the biggest fear for the travel industry, among all of the ongoing disruption. Should any countries get overly cautious about Winter infection rates there could be a domino effect seeing neighbouring countries following suit and implementing similar restrictions on international travel. It’s hard to overstate just how devastating this could be for an industry facing so many challenges right now.

How To Weather the Storm

For the travel operators, it’s just going to have to be a case of treading water and hoping the worst of the theoretical threats aren’t realised. However for organisations needing to plan their business travel requirements for the months ahead, the solution is thankfully more straightforward. It is considerably less stressful engaging with an experienced travel management company to handle your travel arrangements than having to juggle everything in-house.

You can enjoy peace of mind that a good business travel management provider will have contingency in place to deal with last-minute changes, cancellations and potential new restrictions. With so much in the corporate travel sector looking volatile right now, you really need a partner you can rely on to navigate these choppy waters.

Traveltrust are proud to have significant expertise in the business travel management world and will be happy to support your organisation manage all its travel requirements. We’ve got the industry relationships and the wealth of experience to minimise any potential disruption to your plans. Get in touch with us if you’d like to know more.