VSA Capital’s Andrew Monk says there will be opportunities for private equity
Coronavirus: COVID-19 impact won’t be as long-term as the rise of the web
The impact of COVID-19 on the travel industry will not be as fundamental as the change emergence of the internet saw, but it will accelerate existing trends.
Speaking in a special pandemic Travel Weekly webcast Andrew Monk, chief executive of investor VSA capital, said he expected travellers will question how often they jump on planes.
And he said existing concerns about the environmental impact of travel will combine with health and safety issues to contribute to this reduced tendency to travel.
“If you look at what the travel industry went through when the internet came along, the internet came and stayed,” said Monk.
“The changes that took place clearly were long-term fundamental changes that would change the way we operated.
“We suddenly started going online and it changed a lot of things in your industry. Coronavirus is slightly different. It’s come, but it will go away.
“So the only sort of major changes we’re seeing probably longer term are the ones that were going to happen anyway.
“I think there are quite a few changes that were due to happen in the travel industry anyway. What you will see now is simply they will be accelerate.”
Monk said as well as heighted awareness of health and safety measured there will be more questions asked about people’s need to travel.
“I think industry had got to a stage where a lot of people were questioning certain things. The biggest one was saying we’re travelling too much for the sake of it,
“We’re seeing with EasyJet and AirFrance at the moment questions raised about buying more and more planes. We just can’t cope with it.
“People are going to start to question why we keep putting on more and more and planes.”
Monk added COVID-19 is also an opportunity for travel to address cashflow issues that should have been dealt with before the crisis.
Asked about the controversy over firms being unable to pay refunds, he said it is “extraordinary that some travel companies are able to exist by using customers money to keep the business going”.
Monk said: “If you go into a shop, you hand your money over as you get the product, and that is the normal way of doing a transaction.
“It is very unusual, the travel industry, and I suspect that not everybody fully understands how it works.
“There’s lots of customers wanting refunds for holidays they have booked and not taken, but the money has been passed up the pipeline to the tour operator to the hotel or the cruise line.
“And I think there is a big job explaining that to consumers. This is one of the changes that probably should have been coming and what this will do is simply accelerate it.
“It is a concept that is really not acceptable and needed change. At the end of the day, if you pay your money for a product you should be given that product.
“For somebody else to use that money in the meantime is, if nothing else, morally wrong but it’s an issue the industry has always had.
“I think it would be a good opportunity for the industry, perhaps, to sort that out. The industry needs to make itself much stronger.”
Monk added: “Demand is still going be there, people are still going to want to travel and go on holiday. That’s the good news. There is still going to be huge demand.”