Economist warns 50% chance of disruption continuing until next summer

There is a 50% chance of next summer’s peak holiday season being severely disrupted even if a Covid-19 vaccine is ready by early 2021, today’s virtual Travel Convention was told.

Yael Selfin, chief economist at KPMG, told Travel Weekly executive editor Ian Taylor that even if a testing regime and travel corridors are agreed, consumer sentiment towards travelling is likely to be low without a vaccine.

She said there is a chance that a vaccine, some of which have entered the critical stage three of testing, could emerge as early as January next year, but it is more likely to be April.

If that is the case the lead-in time for rolling out the vaccine and for holiday bookings will mean travel restrictions will remain in place during the summer.

“It may mean we will lose another tourism season,” she said. “If you have a vaccine by April and you allow four months of getting it through the population to allow you to lift restrictions and allow for lead-in time for people to book the possibility of losing next summer is relatively high.”

Asked about plans to bring in airport testing and agree safe travel corridors before a vaccine arrives, Selfin said progress to date has not been made as quickly as hoped.

And she said people will remain wary of travelling overseas with the risk of falling ill and relying on insurance if they need hospital treatment in a foreign country.

Pressed on the prospects for 2021, she said: “We need to allow for the possibility for it not going to be a normal tourism season next summer. I would say there’s a 50% chance of that.”

Selfin said she expected staycations to be strong again next year as people look to holiday within their own countries.

And she forecast business travel will be “very limited” as corporates look to cut costs and adapt to a new normal where people travel less frequently for work.

Despite the downbeat assessment of immediate prospects, Selfin said overseas holidays would remain in high demand and people will want to travel as soon as they feel it is safe to do so and quarantine restrictions have ended.

“As soon as restrictions are out of the way that will pick up quite quickly,” she said.

“There’s a lot of positive we should not forget in terms of the opportunities and advances we have made over the last six months.

“We need to be proud of a lot of what we have done as a country and also, if you look at my clients in industries that have overcome a lot by being innovative and continuing to operate quite strongly.

“There is positive, but at the same time we need to look at the risks and plan for them. There is no point in blind optimism. We need to be realistic and prepare for the potential downside risks.”

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