Covid-19 Impacts Global Travel Industry
The Covid-19 virus has been also hitting the tourism industry. In Indonesia, the number of tourist arrivals from various countries have decreased dramatically as China tourists have been a significant contributor to Indonesia’s tourism and hospitality industry. The decline in tourists has already impacted businesses such as hotels, tourist trips, tourist transportation, tourist guides, and souvenir makers especially at tourist spots such as Bali, Labuan Bajo, Yogyakarta, Bintan etc. As a result of the Corona virus, Indonesia’s Central Government has issued a very important policy by discounting the flight ticket prices to 10 tourist destinations including Lake Toba, Yogyakarta, Malang, Manado, Bali, Mandalika, Labuan Bajo, Bangka Belitung, Batam, and Bintan. The policy’s aim is to boost the number of domestic tourist visits and will be valid for three months from March to May 2020.
Updated news on Monday (2/3/2020), two Indonesia residents have been tested positive for the Covid-19 and are now under intensive care at Sulianti Saroso Hospital, North Jakarta. This news has already lead to panic buying at several supermarkets and shops in Indonesia and price increase in hygienic articles such as hand sanitizer etc.
Hotels are advised to stock up on face masks, antibacterial gel and hand soap to make sure guests and staff stay as healthy as possible. By doing so, the hotels instill confidence of their guests and staff that they are acting responsibly. From the standpoint of revenue management, the Coronavirus is challenging the hotels to be proactive to define short and long term strategies against the decline of bookings. The hotels need to understand the Covid-19 influence to the global and regional economic conditions while monitoring the change of situation. Though dropping prices is a strategy with risk since it requires high effort and time to recover the prices to pre-crisis level. Another impact could be to supply chains, especially for hotels that use imported products from China. Hotels should consider undertaking a process of product mapping to ensure that vital components are not supplied from China or critical infected areas. It might be worth to look for alternative supplies for the moment.