The cost-of-living crisis and staff shortages are among the biggest challenges facing the travel industry and its recovery, according Latin American specialists.
Speakers at a ‘View from the Top’ session at the Lata Expo trade event also said rising fuel prices would pose a challenge.
Colin Stewart, Lata chairman and country director at Air Europa, said the impact of fuel costs had yet to be fully felt by airlines which had hedged, but predicted the impact would come soon.
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“This is just the way it is moving forward with food prices rising, energy prices rising, petrol rising, and I think the aviation industry is not an exception to that,” he said.
“I think it will eventually feed its way through, if the situation stays the same that it is, but you’re probably not seeing the significant rises because certain airlines are still managing their hedged fuel.”
Addressing whether rising costs would be passed on, he added: “Fuel in some cases can be as much as 25-30% of an airline’s cost, so if you look at any business and you look at the bottom line, you see the fuel rising, sometimes 30, 40, 50% of what you budgeted for, that’s got to go somewhere.
“Can the airlines in that situation afford to take the hit in that stage after two years of almost nothing?”
Sarah Bradley, managing director at Journey Latin America, agreed that rising prices had yet to filter through to the customer.
“I think anyone who is booked to travel now, and even current bookings, are getting a really good deal,” she said.
“Everyone worked really, really hard to keep confidence up and keep people travelling and partners throughout the supply chain worked to hold their prices, but the inflationary pressures are such that they are going to come.”
Christopher Wilmot-Sitwell, co-owner of long-haul tailor-made specialist cazenove+loyd, agreed the rising costs would be a challenge for both businesses and consumers, but said a more immediate issue was providing a quality customer experience.
“The issues we’ve got are more about staffing and standards,” he said.
“Clients have a short memory; they say, ‘gosh it must have been awful for travel going through this pandemic, it’s the worst hit industry,’ but when they end up in a hotel where the door is not painted or the staff are a bit stressed or the chef is not as well trained as he should be, they forget their sympathies.”
James Goller, co-founder at Viaventure, said rising numbers of requests were resulting in a need to hire more staff.
“We’re starting to look for sales staff but some of the sales staff we let go have already found and are happy in other industries,” he said. “It is great for them, we’re really happy they’ve found work, but now we’re starting from scratch in terms of looking for new staff to come back.”
Jutta Zenner, sales and marketing director of South American Tours, echoed Goller’s outlook.
“The challenge is definitely the lack of staff and qualified staff, because lots of people left to other industries,” she said. “Not everybody is happy there but, at the moment, they stay there because we are growing rather slowly.
“We have to look for new staff, we have to qualify new staff. At the moment we are ok but once we grow again, and once we get back to the numbers we used to have, we will see how much it affects us.
“I think we have to work now on getting new staff, training staff and giving incentives to people to come back.”
Bradley said there was a lot of pent-up demand for travel to Latin America, but the recovery had not been equal across the region so far.
“Costa Rica is out-performing pre-pandemic levels,” she said. “There are some destinations that are there or thereabouts against pre-pandemic levels, but a number which aren’t.
“Chile is probably a prime example where there’s a long way to go to get back to normal.”
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PICTURE: Steve Dunlop