“Travel & Tourism sector: Providing Customers with Flexibility and Security is Key,” says Efi Dahan, PayPal’s general manager for Central & Eastern Europe, Russia, and Israel.
Dahan gives GTP Headlines his insight on developments involving the impact of the Covid-19 pandemic on travel to Greece and highlights the importance of travel security and flexibility in the challenging COVID reality.
Greece has long been one of Europe’s most popular tourist destinations. Beautiful beaches, historic sites and breath-taking views have attracted not only Europeans, but also visitors from other continents including North America and Asia – until 2019. COVID-19 travel restrictions and border closures struck the travel & tourism industry hard, causing massive job and revenue losses. Although the outlook for the sector remains uncertain with the rapid spread of the delta variant, there are signs of recovery that allow the country to look to the future with moderate optimism. But to get back in the game, travel-related businesses should provide their customers with flexibility and security.
The ‘revenge travel’ mode is on…
With many governments lifting COVID-19 restrictions and vaccination on the rise, the travel & tourism sector is striving to get back to normal. It’s still far from the pre-pandemic levels, but there is a hope. As more people are travelling or planning to travel for both business and leisure, the ‘revenge travel’ phenomenon is seeing people who have been stuck at home for the last year booking trips and vacations as a form of pandemic payback. This positive trend provides relief to tourism-dependent economies.
Greece’s tourism sector, which accounts for a fifth of the country’s economy and one in five jobs, has already observed some signs of recovery. According to the recent study from the National Bank of Greece in June 2021, arrivals to Greece recovered one-third of pre-COVID-19 2019 levels against 3% in June 2020, while July 2021 had gained back two-thirds of pre-pandemic 2019 arrival figures against 29% in the same month of 2020. Overall, the country’s tourism sector in 2021 is expected to recover up to 50% of pre-pandemic 2019 levels.
The growing interest in travel has also been reflected in PayPal’s data. Since March 2021, we have been seeing the rise in the volumes of transactions in travel industry across all European markets. Travel in Greece is re-accelerating swiftly, with travel trends showing promising recovery boosted strongly over the summer season and rising number of vaccinations – with more than 3x volumes processed in Q2’2021 when compared to the previous quarter by our travel merchant. This is good news for both all Greek businesses operating in travel-related categories including airlines, hotels, car rentals, tour operators, travel agencies, and other travel service providers, as well as many other sectors indirectly dependent on the tourism-related traffic, i.e., restaurants, museums, local transport companies, etc.
… but anxiety remains high
Greece officially reopened for tourism on May 14th. Two months later, on July 19th, Deputy Tourism Minister Sofia Zaharaki told local TV station that since the beginning of the year, foreign tourist arrivals in the country reached 2.3 million. It’s fair to expect that today this figure is even higher. These numbers bring hope to the Greek travel & tourism industry. But there is also another side of the coin.
The pandemic has increased travel anxiety. Rescheduled flights, inconveniences associated with changes, regulations, and requirements in the interest of public health or unexpected health issues, along with unforeseen natural disasters, such as wildfires, heavy storms or floods (also connected to the climate crisis) make travelers all over the world hedge their bets. As a result, in the challenging COVID reality they are less eager to take a risk, regardless of whether it’s purchasing a flight with an unknown carrier or sharing their financial details with local hotel or travel agency. Enabling payment solutions by recognized and trusted global payment providers like PayPal can help travel & tourism businesses overcome these challenges. According to the Nielsen Media Behavioural Panel, PayPal users in the UK are up to 1.2x more likely to make a purchase on Travel websites where PayPal is visible. This rate is even higher in Germany, which is one of the leaders of incoming tourism for Greece, responsible for 17% of the total number of foreign arrivals to the country in 2021. German PayPal users are up to 3.1x more likely to make a purchase on Travel websites offering PayPal as one of the payment methods.
Apart from security, another key value proposition businesses operating in the travel & tourism industry should provide to their customers is flexibility. In a world where changing travel advice and restrictions make it highly difficult to book holidays or plan a business trip, free cancellation policies or extended rebooking options are crucial to attract and retain customers.
Light at the end of the tunnel
The travel & tourism industry is very dynamic – things change fast and businesses need to adhere to constantly changing guidelines and regulations on ongoing basis. According to the latest ‘European Tourism Trends & Prospects’ quarterly report published by the European Travel Commission (ETC), the demand for intra-European trips which are expected to account for over 80% of Europe’s travel in 2021 is expected to pick up considerably in course of the second half of 2021, while announcements to welcome vaccinated American travellers have already boosted transatlantic travel to destinations such as Iceland, Croatia, or Greece.
However, while the general outlook is positive, it’s necessary to remember the COVID-19 pandemic has significantly changed the way people think about travelling. What once was normal, is not normal anymore and travel security and flexibility are more important than ever.