With travel restrictions in effect all over the world, and most tourism attractions temporarily being shut down, the impact of COVID-19 on the tourism industry is evident. The World Travel and Tourism Council predicts the loss of around 100 million jobs in the sector and one of the worst affected areas is Asia, with an estimated 63.4 million jobs at risk.
In a region such as ASEAN, millions of people depend on tourism spending to survive. The area attracted approximately 133.1 million visitors in 2019, with this number expected to climb further in the coming years. Established tourist hotspots such as Thailand, Malaysia and Vietnam welcomed around 39.8 million, 20.1 million and 18 million visitors respectively.
COVID-19 has dealt a devastating blow to the industry, halting all but the most necessary of travel in the region. There are fears that many businesses won’t survive the pandemic, and countries’ economies may take a long time to recover. According to GlobalData, the industry was on track to bring in $155.4 million USD to Southeast Asia by 2022, but this figure is now undoubtedly unattainable.
A lot of Southeast Asia has seemingly now turned the corner with regard to the Coronavirus, and some countries are considering opening up their borders to tourists in the near future. But many economists are predicting it could take over a year before the industry will recover as people will be reluctant to travel until they are sure the virus is under control.
Part of this road to recovery will involve the use of technology, which could bring a positive boost to startups engaged in traveltech in Southeast Asia. While the cessation of tourism has badly hit some, others are pivoting and adapting in order to survive.
We take a look at some traveltech startups adapting innovative ways to stay in business during this global crisis.
When the entrepreneurs behind Singaporean startup Travelhorse incorporated their business in January 2020, they visualised a large customer base for their luggage storage platform. Unfortunately, just weeks later, the first case of COVID-19 was recorded on the island, and tourism quickly came to a standstill.
Undeterred, Travelhorse pivoted its product’s direction and moved into food delivery and logistic services. Working with the partners it had established in the old business model, they offered to stand with its country and help deliver necessities in this time of need through their F&B Dash service. This brave change of direction should pay off and help it survive until tourists start to visit again, and it can revert to the original plan.
Capsule hotels have been a popular, affordable choice for many budget-conscious travellers in recent years. So, in 2017 when Indonesia’s Bobobox decided to enter the market, it did so confidently, knowing that it had every chance of success. Fast-forward to the almost apocalyptic landscape of the tourism sector in 2020, and you might think that like most other hotels and hostels, Bobobox would have its doors shut.
Despite occupancy rates dropping from 80-90% per night to 50-60% during the pandemic, this firm has shown it is possible to not only survive but also to thrive in times of crisis. It recently raised $11.5 million USD from a Series A funding round and looks set to continue to expand its state-of-the-art, IoT-enhanced pod hotels when travel restrictions ease.
With claims that it is the “world’s biggest inventory” playing host to 29 million rooms and over 80 thousand tours and activities, Vietnamese traveltech startup Triip’s platform is the perfect place to start planning a holiday. One of its main selling points is that it offers genuinely local experiences and helps tourists to embrace a kinder, more sustainable way of travel.
And, even with a global pandemic, the company is still encouraging people to research and share their travel plans, but even more importantly, right now, to stay at home. Triip adapted its usual money-earning offering of sharing trip information and completing tasks, to “Stay Home Hero”, where it rewards users for proving they are not leaving their house.
As the tourism industry tries to dust itself off and resume operations, embracing digital methods to assess the impact of COVID-19 on travel, finding ways to reassure people that it is safe to go on holiday and helping to save as many jobs as possible, will all become vital. With support from governments and venture capitalists, traveltech in Southeast Asia will be able to assist in the rebuilding of the once-booming tourism sector. While some may struggle to survive, others will thrive if they are willing to adapt and help the hospitality and travel industry find its feet again.