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After devastating 2020 and colossal revenue losses caused by the first and second wave of the pandemic, the COVID-19 continues paralyzing the aviation industry. The growing number of COVID-19 cases, fears of travel restrictions due to Delta variant and concerns about the economic recovery caused a new hit to the world’s largest airlines, hoping for a steady upturn in the aftermath of the pandemic. According to data presented by StockApps.com, commercial airlines are expected to end this year with a profit loss of nearly $52bn and revenues 43% lower than before the COVID-19 hit. European Airlines the Worst Hit, with $21 Billion in Profit Losses During the last decade, the aviation industry witnessed stable growth, with revenues rising at a CARG of around 5.3% between 2009 and 2019 and reaching $838bn that year. However, after the pandemic hit, revenue streams dropped to historically low levels, with most of the world’s biggest airlines not even covering their operating costs. Although government aids across the globe brought hopes for the steady recovery of the global aviation industry, this scenario might not happen for years. Along with remaining one of the worst-hit sectors during the pandemic, the entire market faces increased costs, including labor and fuel. The International Air Transport Association (IATA) survey showed that commercial airlines generated only $373bn in revenue in 2020 or 57% less than pre-pandemic projections. Although this figure is expected to jump by 25% YoY to $472bn in 2021, that is $100bn less than revenues from 2008. Statistics show the global commercial aviation profit loss is expected to reach $51.8bn this year, after the industry already lost almost $138bn in 2020. In regional comparison, most of that loss, or nearly $21bn, will be generated by the European airlines. The IATA predicts Asian Pacific to witness the second-largest profit loss this year of $11.2bn. Middle Eastern and African carriers reported combined losses even before the COVID-19 shock. However, according to the IATA survey, the airlines from the two regions are expected to lose around $8.7bn in 2021. Latin America and North America follow, with a $5.6bn and $5.5bn profit loss, respectively. However, North America is the only region expected to witness significant recovery next year, with airlines reaching $9.9bn in profit gains. Almost 85% of People Changed their Travel Habits; Catching the Virus Abroad the Biggest Concern Besides increased costs and plunging profits, the entire airline industry is facing massive changes in travel habits caused by the COVID-19 pandemic. According to Passenger Confidence Tracker 2021, commissioned by Inmarsat, 84% of respondents claim their travel habits are likely to change post-COVID-19. Around 35% of people have decided to travel less frequently by any means after the pandemic ends, while almost 30% would travel less frequently by air. Catching the virus is the biggest concern preventing people from traveling abroad, with a 52% share among respondents. However, the five other concerns with high shares of responses were also all related to the pandemic. The survey also showed that India, South Korea, and China had the largest number of people who decided to travel less frequently by any means, while people from the United Kingdom, Greece, and Germany are the least likely to change their post-COVID-19 travel habits.

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The utilization of robotics will continue to grow in importance in the travel and tourism industry. However, companies need to be sensitive in how they deploy this form of smart technology, says GlobalData, a leading data and analytics company.

According to a recent GlobalData poll*, 31% of the respondents stated that their company will invest in robotics in the next 12 months, with robotics being the third most popular answer for this question, above the likes of IoT and cloud. A significant contributing reason as to why business executives and employees think that investment in robotics will increase is due to the long-term cost savings this technology can provide along with its ability to meet the sudden changes in consumer demands.

Ralph Hollister, Travel & Tourism Analyst at GlobalData, comments: “Prior to the pandemic, the utilization of robotics in tourism was mainly seen as a gimmick. Robot butlers in hotels would provide good Instagram opportunities for guests, creating exposure for the accommodation provider, and customer service robots at airports would entertain guests to reduce feelings of boredom. These same robots are now a necessity for the likes of hotels and airports due to the need for COVID-safe experiences.”

According to GlobalData**, 74% of global consumers are is still either ‘quite’ or ‘extremely’ concerned regarding the impact of COVID-19. These robots reduce the need for human contact, which increases safety for travelers across multiple stages during their trip.

It is also no secret that COVID-19 has battered the finances of many companies involved in travel and tourism. Although the initial cost of investing in robotics to replace human jobs will be high, many companies will recover what they have invested in just a short number of years. Subsequently, companies will then continue to shrink fixed costs and increase profit margins.

Mr. Hollister concludes: “Investing too heavily in robotics to replace human jobs could tarnish brand image. Travel and tourism employment has fallen substantially across the globe due to the pandemic, and many consumers will feel that it is a company’s social responsibility to employ people in need of work as travel recovers, especially if they have appropriate skill sets. Filling vacancies with robots could be deemed as insensitive in the current climate, especially in destinations that heavily rely on tourism as a key contributor to the local economy.

“Through increasing operational efficiency and improving traveler confidence, robotics in tourism will continue to grow. However, companies need to ensure that they are not seen to be shunning their social commitments. It must be emphasized that the robots are deployed to work alongside humans, not instead of them.”

* Question: Which of the following areas will you/your company invest in over the next 12 months? (ended April 16, 2021, with 476 respondents).

** GlobalData’s Q3 2021 Consumer Survey

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