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Love and travel, plus another Zoom call, in the time of Coronavirus

Jun 18, 2020

It has always been essential for the youth travel sector to focus on the unique characteristics and conditions that make tailored travel experiences possible for young people, but the COVID-19 crisis is a firm reminder of the need to keep the bigger picture in view. Although the ins and outs of youth and student travel are very well known to a small number of long-standing organisations, the sector’s niche travel products have evolved since the post-WWII era while maintaining the value of cultural exchange at the core.

The youth travel sector serves a segment of travellers estimated at nearly 25% of international arrivals. With some parts of the wider travel industry beginning to unlock from the grinding global halt, we talked to someone with decades of strategic and operational experience across several areas of travel about where youth travel fits into the bigger picture of recovery. That someone is Carl Michel, Operating Partner at The Strategy Exchange, former Executive Chairman of Generator hostels and past member of WYSE Travel Confederation’s STAY WYSE Association board. 

“Love and Travel in the Time of Coronavirus” is a thought piece that you recently wrote and published on LinkedIn. What prompted you to write this?
As someone who has been in travel for about a quarter of century with a career that spans airlines, hostels, school trips, online travel agency, river cruising, luxury home rentals, adventure travel and camping, I felt I could at least try share some wider insights. I had also seen a few articles and attended some webinars which really only scratched the surface of what was going on, so decided I wanted to try and write something that might still be relevant next year. 

How has your thinking changed about the impact of the virus on the travel industry over the last several months?
After a few weeks of slack-jawed shock, I sensed that the recovery would be quite slow and that, to better understand it, one needed to focus more on consumer psychology. And the longer the crisis lasts, the more behaviour will shift and the less likely it will simply revert back to what we had before.  I have to say, I have listened to so many people talking superficial nonsense about what the future might look like, that I am not sure if we really need another Zoom call. Hence my decision to pen something a bit more substantial.

What business kept you busy in 2019? How is that going now?
I was kept busy with two things last year – one was chairing a German river cruise business where we took the decision to invest in a new ship with hybrid power, catering not just to our core demographic but also introducing a revolutionary family product concept. The other was advising on the buy-side on a number of travel deals in youth travel. This involved thinking through not just whether the underlying business was robust but what other opportunities were out there to expand.

I am happy to say the shipyard is busy with building our new vessel, although the impact of all the supply side disruptions means the completion date has been pushed back. As for the travel deals, everything has ground to a halt. Happily, some of the reservations I had about how high to bid turned out to be rather fortuitous. In the end, it is often the deals which one walks away from (in disappointment) that are the best ones. These will come back again in time and maybe at a more reasonable price.

Youth travel is a segment of travellers that you briefly touch on in “Love and Travel in the Time of Coronavirus” and there are a few specific challenges that you note – namely school travel and hostel accommodation. Can you expand on those a bit? Do you imagine that the changes that school groups and hostels will need to make on the short term will have significant consequences over the long term?
I tried to write more generally for all sectors rather than focus on hostels or youth travel. The truth is that while Coronavirus is really not very dangerous at all to young people, the perceived risks may still be exaggerated (also known as cognitive dissonance) and lead to new behaviours. For one, the image of hostels being full of happy-go-lucky beer-drinking groups is a bit of myth – the majority of travellers are female, often guests travel singly or in pairs, so the mindset may be much less care-free than people imagine. Hygiene and security have always been big preoccupations – now one needs to add health safety too. This becomes a challenge for newer hostel operators who have been perhaps overly focused on cramming more beds in, of creating intimate social spaces where one can meet with others. Smaller ‘traditional’ operators, if they can survive the bookings drought, could be well placed. But it may mean more private rooms, less F&B (which rarely earns one much) and perhaps expanding the product offer with bike tours and learning classes. Guest kitchens can be repurposed, larger shared dorms split up.

School travel has to deal with the added complication that teachers may be reluctant to take on the risk of leading a group and parents may view the attendant health risks (of their child returning without symptoms but with the virus) as unacceptable. So, it is possible that this sector is likely to be smaller going forward with a much higher test on whether a trip is really necessary. Plus, in the next year, one has to factor in a huge catch-up period for all students who have missed three to six months of schooling

Do you see opportunities for youth travel?
As noted, I actually think COVID-19 will help smaller more boutique hostels to the detriment of the larger ‘bed-factories’. Also, those with leased properties may find the going tougher. Landlords may have deferred rental payments, but this has only ‘kicked the can’ down the road a bit. At some stage these rent arrears, like any loan, will need to be repaid, so, it’s much better if you own the site freehold.

I think many younger travellers will be staycationing in their own country or travel bubble this year, so operators need to redirect efforts to source markets they have maybe not prioritised as much of late. But we all have to think hard about creating new and enduring USPs – price alone is not enough.

How do you think the current global wave of protests against racism and social injustice will affect young people and how they view travel and cultural discovery and exchange?
I think I honestly need more time to reflect on this. But it is likely to widen the generational gap that already exists on climate change where young people feel frustrated by the slow pace of change. It would be nice to hope that this encourages travel for a purpose (i.e. cultural exchange) rather than just travel for travel’s sake.

It seems that every few weeks there is a new theme that the industry focusses on. Flexible booking policies, ‘re-setting’, trust, safety, hygiene standards, and contactless experiences are a few. Consumer sentiment is the latest. WYSE Travel Confederation has been waiting to conduct this type of survey until the return of a baseline possibility for major global markets to travel. What’s your take on consumer sentiment findings at this point in the crisis?
I think we are still in the spin cycle of all this. So, I agree that a sentiment survey now is a bit of a waste of time. Maybe in two to three months we can be see the true impact on consumer behaviours.

Are there old thought patterns or assumptions that will no longer fit into business strategy for a post-COVID-19 travel industry?
A lot of thinking (and some business plans) revolve around the Chinese coming to the rescue of global tourism. I am less convinced that such a reliance is healthy or sufficiently assured. As supply chains become shorter and less global, so it may be wiser for tourism to focus on demand that is more regional and/or less subject to the vagaries of geo-politics. 

How have you handled the situation personally? Are you well? Do you have any new hobbies?
I am well – quite sanguine about it all, as there is no point getting annoyed about holidays that need to be cancelled or much else. But one can take some comfort in smaller pleasures like nice food to cook, the recovery of nature, etc. Not shopping, apart from groceries, is also not a bad experience – one really does have enough ‘stuff’. I am also discovering the pleasure of jogging, which pre lockdown I never really liked!

Thank you for sharing your thoughts and humour, Carl. We wish you all the best with your jogging.

Carl Michel is an Operating Partner at The Strategy Exchange. He serves as Chairman of several travel businesses, including Veeve, a short-stay holiday and luxury apartment rentals platform offering properties in London and Paris. He is also a Visiting Lecturer at the City University of London. Prior to joining The Strategy Exchange, Carl served as the Executive Chairman of the chain of hostels now known as Generator. He also served on the board of the former STAY WYSE Association. Earlier in his career, Carl was Chief Executive of Holidaybreak plc and a Commercial Director of British Airways.

 

 


Carl Michel

Operating Partner,
The Strategy Exchange

Thought piece: Love and Travel in the Time of Coronavirus

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