The impact of Covid-19 on air travel was perfectly illustrated last week in a trading update from Ryanair, the biggest budget airline in Europe. It is currently operating fewer than 20 flights a day as against a normal schedule of 2,500 daily. It cannot provide any guidance on profits for the current financial year because it simply doesn't know when air travel will resume or gauge accurately the level of consumer demand after the lockdown. Many carriers around the world will go bust in the coming weeks and months.
Dalata Hotel Group is Ireland's biggest hotel chain. It has closed 29 of its 44 hotels, with the balance providing accommodation to healthcare staff and other essential workers. Citywest in Saggart, the biggest hotel in the country, has been converted into a HSE facility to treat patients with Covid-19. Dalata chief executive Pat McCann, an industry veteran, expects restrictions to last until September. If that is true, summer has effectively been cancelled, which would be devastating for towns and villages across the country that rely on revenues from the peak tourism season.
Social distancing will continue to be a feature of life until a vaccine has been developed and is widely available
Tourism is a €9.4 billion industry in Ireland, employing about 260,000 people, according to Fáilte Ireland. Its broad geographic spread makes it a vital source of jobs and income in rural Ireland, reaching into practically every nook and cranny on the island.
Rebooting the industry once restrictions begin to be lifted will be extremely challenging. Social distancing will continue to be a feature of life until a vaccine has been developed and is widely available, and people around the world will naturally be slow to travel abroad again for fear of putting themselves in the way of danger.
A series of initiatives will be needed to help kick-start the industry again. Fáilte Ireland is already scoping out the possibility of another version of the Gathering, a 2013 tourism-led initiative to encourage the diaspora to return home to visit family or attend an event.
The brutal fallout from Covid-19 still lies ahead, and many businesses will not reopen
In the wake of the financial crash, a special VAT rate of 9 per cent was introduced to support the hospitality sector before being scrapped last year. The State lost €2.6 billion in tax revenue but the measure boosted competitiveness at a crucial time in our recovery and helped drive visitor numbers to record levels. Marketing initiatives such as the Wild Atlantic Way were also launched with success.
Similar innovation will be required this time around and the industry will also have to play its part in providing value for money to consumers.
The brutal fallout from Covid-19 still lies ahead, and many businesses will not reopen. But the hospitality sector demonstrated its resilience after the financial crash and can do so again with the right supports and leadership from Government and State agencies.