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IN FOCUS: After signs of recovery, how much damage is Omicron doing to the battered travel and tourism industry?

Just as they were beginning to see the light at the end of the tunnel, the travel and tourism industry now faces a new challenge in the potentially more infectious Omicron variant. CNA looks at how the industry is clawing its way back to a revival.

IN FOCUS: After signs of recovery, how much damage is Omicron doing to the battered travel and tourism industry?

Local firm Rangoon Air Travel resumed operations at its centre at Tekka Place in December 2021. (Photo: Vanessa Lim)

SINGAPORE: With Singapore gradually relaxing border restrictions and launching more vaccinated travel lanes (VTLs), COVID-battered travel and tourism companies have been emerging from the shadows of the pandemic, in the hopes of reviving their business.

For travel agency director Jahabar Sadiq, this meant returning to his office at Serangoon Road for the first time in almost two years.

The 37-year-old, who had to rely on odd jobs such as food delivery and part-time security for income, decided to switch back to working full-time at his centre, Rangoon Air Travel, earlier this month.

As Mr Sadiq stepped into the office, emotions welled up inside him.

His almost-brand new travel agency and visa processing centre, which had been forced to close its doors just a month after it was set up due to the introduction of the "circuit breaker", was coated with a thick layer of dust.

In the corner of the office were cardboard boxes still to be unpacked after nearly two years.

Sitting in his black swivel chair, a small smile spread across his face as he told CNA how it felt to be back.

"It's an indescribable feeling and so emotional for me to be here again, to sit in my own chair," said Mr Sadiq, who runs Rangoon Air Travel with three other partners.

Travel agency director Jahabar Sadiq (right) and his business partner Nandakumar Ramanathaan (left) attending to customers at their office in Tekka Place. (Photo: Vanessa Lim)

Recalling the struggles he has faced, the father of two said his family had to watch their spending closely and cut back on unnecessary expenses.

"This (travel) business is our rice bowl and when flights stopped, we suddenly had no more rice – and life as we knew it was gone," said Mr Sadiq, who is the sole breadwinner.

"Whatever odd jobs I could find, I would do it," said Mr Sadiq, adding that he typically earned between S$50 and S$60 a day as a food delivery rider as well as a security officer.

"It wasn't a good feeling but what choice did I have?" he said. "I had to do whatever I could to help my family survive."

Figures released last month in Parliament showed that travel agents were among the hardest hit by the pandemic, with 157 – or 8 per cent of all licensed travel agents – ceasing operations since January 2020. 

But the country's VTL scheme, which first kicked off in August, appears to have unleashed pent-up demand for travel. To date, Singapore has announced 27 air VTLs and one land VTL with Malaysia.

Online travel giant Expedia said searches for international VTL destinations on its website have tripled since August.

The pent-up demand for travel has resulted in a clear increase in demand for outbound travel for the year-end period, said the group's head of public relations for Asia, Ms Lavinia Rajaram.

A check-in counter at Changi Airport Terminal 1. (File photo: CNA/Vanessa Lim)

Seoul, Kuala Lumpur, and Sydney were among the top five destinations for year-end travel among Singapore travellers, she said.

At Mr Sadiq's agency, which specialises in tour packages to India, phone lines have been ringing continuously since the Singapore-India VTL was announced last month.

"Once the news was out, people started calling us, messaging or even coming down to the office to ask us about the possibilities of getting a flight," he said, adding that the office was closed at the time.

"It got to a point where we were getting so many calls that we thought it would be better to open the centre up and have the customers come down instead," he said.

"By then, most of the other travel agencies had already reopened too, so it was time for us to let our regular customers know that we were still in the market and ready for business."

Mr Sadiq’s agency, which specialises in tour packages to India, also offers visa application services. (Photo: Vanessa Lim)

Things have also been looking up for Monster Day Tours founder and CEO Suen Tat Yam over the past few months.

Since expanding his business to include virtual and game tours, revenue has almost returned to pre-pandemic levels.

But a breakthrough came when he noticed one or two foreign-sounding names on his booking list a few months ago.

Having been through a nearly two-year tourism drought brought on by the pandemic, the 35-year-old was careful not to get his hopes up.

Then came the emails from people living overseas, who were enquiring about his company's tours and asking for booking details.

That was when he realised that the moment he had been waiting for – like so many others in the travel and tourism industry – had finally arrived: The return of overseas travellers.

An employee of Monster Day Tours conducting a virtual tour at Little India. (Photo: Monster Day Tours)

"We started receiving enquiries from people after the announcement of the vaccinated travel lane scheme (in August), and I had people saying that (they) will be visiting Singapore in January or February, and that they wanted to do a tour with us," said Mr Suen.

"We were so happy because it felt reminiscent of the pre-COVID days, where we would receive tourist enquiries every day," he said. "So the tourists are starting to come back already and it's a good sign for us."

According to data from the Singapore Tourism Board's (STB) website, monthly visitor arrivals in Singapore have been increasing since August. Last month, the country saw 41,000 visitors – the highest number since the pandemic took hold in March 2020.

A SHADOW OVER RECOVERY HOPES

But while recovery appears to be on the cards for the travel and tourism sector, the industry isn't out of the woods yet.

The emergence of the Omicron variant has cast a shadow on the industry's plans for a revival, with health experts and governments concerned about its potentially higher transmissibility.

First identified in South Africa in November, Omicron was declared to be a "variant of concern" by the World Health Organization and has been detected in more than 60 countries, including Singapore.

The fifth such variant to be given the designation, it reflects a high number of mutations that could increase virus transmissibility and reduce the effectiveness of vaccines.

In response, governments around the world have tightened travel rules, with some implementing travel bans to countries in southern Africa. Last month, Singapore announced that it would freeze all new VTLs, while introducing stricter testing requirements for travellers. The country also held off on easing social restrictions. 

Scoot planes parked on the tarmac at Changi Airport. (Photo: Dilli Babu)

While scientists are still gathering data on the variant, travel companies CNA spoke to expressed concerns that new border restrictions could lead to a spike in cancellations.

At Rangoon Air Travel, 25 per cent of existing bookings have already been cancelled or postponed. Mr Sadiq said if more restrictions such as longer quarantine periods or additional testing requirements are implemented, the company will take a bigger hit.

"People are worried that we might go back into lockdown and they'll get stuck overseas, or new restrictions will be implemented and affect their plans, so out of fear, they would rather cancel or delay their trip," he said.

 "If this situation doesn't improve, we cannot continue with what we're doing because it's not sustainable," he said. "We might have to speak with the mall's management to see if they can help us with rental rebates or allow us to use the space to do something else temporarily."

Meanwhile, local firm Pegasus Travel said it is still receiving new enquiries for trips to Hong Kong and Australia, despite changes in quarantine rules.

"The pattern for most people seems to be that if the quarantine period is between three and seven days, they are still okay to accept it. But if it's more than seven days, they'll just forego the entire trip," said the company's managing director Charles Tan.

"Some of these places that are tightening up travel restrictions already had longer quarantine periods, so we didn't really see much of a demand for them," he said.

"But for Europe, where we're seeing an upward trend in the number of COVID-19 cases, we might see changes in travel restrictions, so we may see a change (in demand)," he added.

As of Friday (Dec 17), Singapore had confirmed 24 Omicron cases, out of which, 21 were imported cases and three were local. 

The Ministry of Health (MOH) said previously that it will continue to monitor the situation but added that observations from affected countries and regions suggest that the new variant is at least as transmissible as other variants that are currently circulating.

Travellers queuing up for PCR tests at Changi Airport on Nov 30, 2021. (Photo: Vanessa Lim)

During a press conference on Tuesday, Health Minister Ong Ye Kung said it was not realistic to stop the variant from entering Singapore, when asked if the country would shut its borders to curb the spread of Omicron.

"We have temporarily suspended short-term travel to affected countries in Africa, this is to buy us time so that we can understand the variant better. But Omicron, as of now, has spread to more than 60 countries, including those in Europe, US and some of our regional neighbours so, soon it will be in great abundance all around us," he said.

"We can't say ... for Delta variant, let's live with COVID (and then) for Omicron variant, let's have a zero-COVID policy. It is not coherent, it doesn't work that way."

"Especially given that we have come this far, we have ridden through a big Delta wave together, we've built up our defences and we have gotten life somewhat back to normal, we don't think we would want to give all that up and go back to where we were last year before Omicron," he added.

The country's high vaccination rates could also help to limit the economic fallout of Omicron.

Members of the public waiting in an observation area after receiving the COVID-19 vaccination. (Photo: Marcus Mark Ramos)

As of Dec 15, 87 per cent of Singapore's total population has completed their vaccination, according to figures from MOH's website. Out of those who are eligible for the national vaccination programme, 96 per cent have taken both shots.

Last week, the country's Health Sciences Authority (HSA) also approved the use of the Pfizer-BioNTech/Comirnaty vaccine in children aged five to 11, with a plan to progressively open up bookings for the shots from next week.

Mr Christopher Khoo, managing director for international tourism consultancy Masterconsult Services, said while the new variant is concerning, it may not completely derail the industry's recovery plans.

"We are further along in the fight against COVID in that we've got more options now because vaccination rates are pretty high and steadily increasing in many countries, so that's a positive sign that we didn't have a year-and-a-half ago," said Mr Khoo.

"We're more aware of the transmissibility of the virus, and we've ingrained that into our old behaviours, following certain protocols like safe distancing and avoiding of crowds," he said.

"It's not going to be plain sailing and we might see one or two more surprises, but we are a lot more prepared this time around."

His sentiments were echoed by Pegasus Travel's Mr Tan, who is also the secretary-general of the National Association of Travel Agents Singapore (NATAS).

Having gone through nearly two years of disruptions, Mr Tan said travel firms have learnt how to adjust and adapt better to changes, making them more resilient.

"Omicron will definitely have an effect on us, but it will not be a devastating one which takes us back to square one, perhaps just one or two steps back," he said. "We should be able to conquer it and move on."

In the meantime, he said his company will take the opportunity to press on with its expansion plans. Earlier this year, it launched a S$1 million sister company to cater to a growing demand for private and customisable holidays.

It is now currently in the process of applying for grants from STB to improve its online booking system and reduce administrative work for its employees.

"We decided that the best way forward would be to offer a full spectrum of travel services and so, we invested more money to build up the new company, and brought in new talents who have the knowledge and skills we lacked before," he said.

"We want to come out stronger from the pandemic, and if we go back to doing things the same way we did before, definitely, we would not be able to survive."

A CHANGING LANDSCAPE

But even as the industry looks ahead to a post-COVID future, it is unlikely that it will return to its original form due to major changes in the travel and tourism landscape, said experts.

Growing awareness over the importance of health and safety means large travel groups may become a thing of the past, said Ngee Ann Polytechnic senior tourism lecturer Michael Chiam.

A group tour conducted by Monster Day Tours before COVID-19. (Photo: Monster Day Tours)

"People may prefer to travel in smaller groups or at least, travel with people they know because they might think it's safer and also to avoid infection. So we could see more people opting for smaller, private tours rather than the large ones we used to see," said Dr Chiam.

"In terms of destinations, we might also see more people choosing places that are away from the hustle and bustle of the city, instead of those that tend to be more crowded with tourists," he said.

It's a pattern that some are already seeing, with travel companies observing an uptick in enquiries for more private and customised trips. That is despite higher prices, which could be as much as double that of large group tours.

Local firm CTC Travel's first tour group during the pandemic in South Korea on Nov 16. (Photo: Chen Bin)

"There's a lot of pent-up demand for travel. We only launched our sister company six months ago and we're still in the processing of setting up the business, but we have already received quite a number of enquiries about our itineraries for smaller, private tours," said Pegasus Travel's Mr Tan.

With the COVID-19 situation still evolving, travellers have to grapple with ever-changing safety protocols imposed by different countries as well as the possibility of last-minute changes or unplanned scenarios.

Recalling the early days of travel arrangements such as the Reciprocal Green Lane and travel bubbles, Mr Tan said it was a struggle to keep up with all the changes and attend to affected travellers.

"The Singapore-Hong Kong travel bubble, in particular, was a headache. It was delayed at least twice and never actually happened," he said.

"But the amount of work we had to do, whether it was cancelling existing flight bookings and getting refunds, or managing the credits for customers who wanted to change their flights to another destination, was significant."

"It took extra work to get all this done, for a trip that didn't materialise and one that we actually didn't get anything out of it because we didn't impose a service fee," he added.

"But what we got instead, was a certain amount of goodwill from our customers. And now that travel is restarting again, these customers are coming back to us."

Changi Airport workers wearing personal protective equipment at Terminal 3, Jun 7, 2021. (Photo: Changi Airport Group)

This is where COVID-19 has presented an opportunity for travel agents to attract more customers, said Dr Chiam.

"In the past, people liked to do free and independent travelling, where they planned their own itineraries. But now, because of the sheer number of restrictions imposed by the various governments, most people don't want to go into the realm of checking and staying up to date on the latest requirements," he said.

"So we will probably see more people opting for travel agents when planning their trip."

SURVIVING THE TEST OF TIME

Despite the uncertainties, travel and tour operators CNA spoke to say they are determined to ride out the storm until the industry eventually recovers.

A recent report by global consultancy firm McKinsey & Company predicted that global tourism will return to pre-pandemic levels only by 2024.

But Dr Chiam said it might take even longer than that.

"It's still early days because we are not seeing as many inbound travellers as we would have hoped to see. Because if you look at travellers from places such as Europe, they don't come to Singapore just to see the country, they usually want to explore the region as well," said Dr Chiam. "So we can only move as fast as the region."

In Southeast Asia, only Singapore, Thailand, Vietnam, Cambodia and Bali have adjusted border measures to make leisure travel possible for tourism such as scrapping quarantine requirements for vaccinated travellers.

Masterconsult Services' Mr Khoo said he doesn't expect visitor numbers to get back to pre-COVID levels within this decade.

"2019 was actually the high point of travel and tourism for Singapore in terms of number of visitors and all other metrics," he said. "So we now have to start again from zero."

Travellers at Changi Airport in Singapore on Dec 2, 2021. (Photo: AFP/Roslan Rahman)

International visitor arrivals and tourism receipts soared to record highs in 2019. In that year, Singapore saw more than 19 million visitors, with tourism receipts hitting S$27.7 billion. 

"A lot of the industry players themselves are badly battered, many low-cost carriers have ceased to exist and many national carriers are currently on skeletal staff, so that in itself will take time to recover," he said.

In addition, the current pent-up demand for travel may not be as strong as people think.

"We've all gone through about two years of economic hardship and that has reduced our savings that has diminished our job prospects, many people are struggling," he said.

"We may see the same demand that was present in 2019, where people want to go travelling but their bank accounts tell them differently, and it's likely that we'll see a lot less discretionary travel," he added.

But while it's a long road to recovery, experts remain confident that the travel and tourism industry's resilience will prove itself again and help it to bounce back.

Over the last two decades, the industry has demonstrated its ability to recover time after time, with crises such as Sars, ZIKA, Ebola, as well as the Sep 11 attacks, said Masterconsult Services' Mr Khoo.

"The industry has been pretty good in reacting to lower demand (such as) adjusting prices, or coming up with innovative packages or even promoting staycations," he said.

"COVID-19 is really a once-in-a-lifetime kind of event and we were all caught flat-footed ... but one example that we saw (of how quick the industry is to adapt to changes) was the idea of virtual tours," he said. "These have really taken off and we see some companies who are doing virtual tours or hybrid tours that are doing very well."

"So the tourism sector has not been slow in adapting and adopting new practices when need be."

Some, who managed to pull through the worst of the storm, have even carved out a niche for themselves in the market.

Monster Day Tours, which launched its first virtual tour last year, now has 15 local and overseas remote tours.

The firm also worked with a Singaporean game design company to create puzzle tours, in order to attract the locals.

"We managed to make virtual tour a mainstay product, and we saw that there was already an upward trend for thematic experiences, where more and more people were willing to put in money to try different things that they deem as hyper-local," said Mr Suen.

"We have always believed that small, niche tours will be the future and I think COVID has only accelerated this," he said.

Monster Day Tours, which launched its first virtual tour last year, now has 15 local and overseas remote tours. (Photo: Monster Day Tours)

As for Mr Sadiq, he's hoping the new year will bring more luck and good fortune, even though he knows it will be a long road to recovery.

"Now that we're back and we're getting calls and enquiries, we're hoping that this time we can continue business and have more sales too," he said.

At that moment, the phones suddenly stop ringing and a silence descends upon the office. Minutes go by with Mr Sadiq and his business partner Nandakumar Ramanathaan just staring blankly at their screens.

It's an uncomfortable moment, a sign of troubling times, but one that Mr Sadiq has grown used to.

"When we first returned to the office, there were no customers here so it was just my partner and me. We were the only faces we saw for a while," he said, with a laugh.

"But we are going to continue because this is my passion, to serve my customers and also being in the travel industry, so I'm going to try and do whatever I can for my business to survive."

Unfazed, he looks back at his screen while chatting casually with Mr Ramanathaan.

Then, a man walks in. "Hi, I want to ask about flights to India."

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Source: CNA/vl
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