From Surviving to Thriving: A Roadmap for the Recovery, Restart and Return of Travel

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The world has changed.

The last couple of months have been hard for everyone in travel. We are collectively living through the biggest crisis in travel in our lifetime. We have had to make difficult decisions. Decisions that we thought we would never have to make.

OpenJaw had some ‘insider knowledge’ as we saw what was happening in China and Hong Kong faster than most as these are key markets for us given our large installed base of Chinese airlines using our platform as well as having a substantial China R&D centre located in Dalian.

OpenJaw went from having its best year ever in 2019 to a situation where the world of travel simply shut down in a few short weeks. The situation was changing almost daily as we found that decisions that we made a week or two earlier were no longer relevant or valid.

Like everyone else, remote working became the norm. Fortunately for OpenJaw, we transitioned all of our systems into the Cloud several years ago to facilitate shared financial & HR management, distributed development and delivery across our 6 international offices and customers. And as heavy users of tools such as Google Hangouts, Lifesize and Zoom video conferencing, we found that the transition to full working from home was seamless.

Now that we are seeing some signs of a restart, I thought it would be appropriate to explain our own thinking about the future. OpenJaw has created a four-phase framework as a planning tool that might also help you plan the future of your travel business.

The 4 ‘R’s Framework of Covid-19 Planning

Forget the idea of a ‘new normal’. No-one can forecast what is really going to happen. ‘Normal’ refers to a pre-pandemic frame of reference. Too much has happened in a short period of time. As the CEO of AirBnB recently wrote, there are only two firm statements one can make about travel in 2020:

  • We don’t know when travel will return to any level of passenger throughput like 2019
  • When travel does return, it will look different.

Here at OpenJaw, we developed a framework to communicate both internally and externally how we are approaching the challenge. We created four phases to explain each stage of the response to the Covid-19 crisis and how this will, in turn, help us plan for the future:

  1. Retrenchment
  2. Recovery
  3. Restart
  4. Return to Growth

Let’s look at 4 ‘Rs’ – ‘Retrenchment – Recovery – Restart – Return to Growth’ in detail.

Retrenchment Phase: March-May 2020 – lockdown across the globe, and shutdown of travel. Many airlines stop flying, hotels shut and countries close their borders.

Recovery Phase: This is the phase we are entering now. During the recovery phase, people are back on the streets – even if it is just to enjoy the warm weather and long evenings. Some airlines will increase scheduled flying again with reduced capacity to keep connections open between major airports. Quarantine rules mean that options are limited. Airlines and hotels work out how the challenge of social distancing and yield requirements.

Restart Phase: More airlines, hotels and countries restart their tourism industry. But it’s not business-as-usual. Social distancing becomes the norm. Airlines change their conditions of carriage to require passengers to wear mouth and nose protection. There are many uncertainties regarding the extent of travel demand and consumer behaviour in the restart phase.

Return to Growth Phase: Talking to our customers and industry analysts, OpenJaw believe this will be in 2021 at the earliest. We are already seeing ‘green shoots’ in China with more flights and more passenger bookings which we expect to continue into 2021.
Although the recovery will differ country by country, a recent McKinsey paper has forecast some common themes:

Domestic travel will return first in most markets;
International travel will take much longer to recover given government prohibitions on travel from various countries as well as quarantine requirements; and the travel sectors of countries that lack large domestic markets will recover more slowly and will open up first to travellers from nearby countries.

Conclusion: from ‘Restart to Return to Growth’

OpenJaw believe that travel will return in other countries just like China. Flying will involve nearby destinations that people are familiar with. Leisure travel will recover more quickly than business travel. Outdoor and less-crowded destinations will be more popular than big cities.

As McKinsey write, ‘to capture early demand, travel-industry players must redeploy their resources quickly to the markets that recover first—domestic and regional ones. Processes and products need to be modified. Self-service, physical distancing, and new cleaning protocols will not only safeguard the health of customers and employees but also help restore consumer confidence, thus laying the foundation for the recovery of long-haul international trips’.

Travel will return, of that there is no doubt. If airlines, hotels and car hire firms can act early and be flexible with previous hard and fast rules, travel can adapt to the changing needs of travellers in a post-Covid-19 world. China’s early signs of recovery provide useful lessons for the whole travel industry.

By: Kieron Branagan, CEO, OpenJaw Technologies