The year 2020 was tumultuous with mass layoffs and furlough dominated the market across industries. It has also left the travel, tourism, and hospitality sectors hit the hardest, with retrenchment numbers exceeding those seen in the Global Financial Crisis in 2008. International travel was seen to be the most impacted as it continues to have marked decreases and is unlikely to return to record levels the world has previously had in 2018 and 2019.
Annual ACI Salary and Employment reported that 1 in 5 surveyed respondents have lost confidence in the travel, tourism, and hospitality industry entirely; and will no longer pursue a career in the sector. Nearly one-quarter of hiring managers expect further retrenchments to take place in 2021, while 21 percent are uncertain about this. Responding to these alarming statistics, HR in Asia sat with ACI founder Andrew Chan to dig insights on how the statistics and economic sentiments could spell for the travel and hospitality sectors.
As a recruitment company that specialises in the travel and hospitality sector, the COVID-19 pandemic has undoubtedly impacted us as a business severely. Having led a business during the Global Financial Crisis a decade earlier, this invaluable experience enabled us to build ACI to withstand and mitigate future crises. While that was helpful, sometimes there simply isn’t a playbook for most organisations and leaders to follow when dealing with an unprecedented crisis of such a magnitude. As a leader, you have to put your emotions aside and make your decisions based around numbers quickly and critically; since numbers do not lie. So staying abreast with your financials is literally your biggest priority.
While ‘pivoting’ and ‘digitalisation’ appeared to be buzzwords during the pandemic, they should be cautiously evaluated and applied. As an organisation, we knew our core focus and strength was still within the travel and hospitality sector, and that our business fundamentals were what brought us success. Hence, we only used this opportunity to fine-tune certain aspects of our business. For example, we managed to build an online learning platform to support our business’s training arm, and moved workshops and courses online.
I actually hold a different view: I believe that the travel and hospitality industry will recover quickly. I think that the pent-up demand for travel is huge, so once borders open up and safety protocols are in place, the tourism industry will rebound rather quickly. If we look back to what we saw after 9/11, travellers flocked to the sky once they were confident that security and safety measures were standardised across countries. So I think it’ll be similar in a post COVID-19 world. Of course, the million-dollar question is when this will be possible, and that is a tough one to answer. But I don’t believe it’ll take as long as five years.
For the short term, I think most innovations will be around safety protocols to instil confidence in travellers, and also for future-proofing against pandemics. Reducing touch points, such as what we already see at airports, while not compromising on the essence of “hospitality” in the service industry, will be crucial. The pandemic also did not change the fact that we are in a talent-short market, and the challenges of finding talent will return once businesses resume normalcy. This is something I’m personally invested in through my involvement with a start-up called AiMYJOBS, where we are leveraging Artificial Intelligence (AI) technology in the recruitment process to reduce cost and time in talent acquisition.
Obviously, a huge factor is going to be the vaccine’s success – but we know that that’s not going to be quick, so I do expect that the first half of 2021 will remain slow before any visible signs of recovery occur towards later this year. The upheaval was undoubtedly huge with almost three-quarters of the industry either retrenched or had their salaries significantly cut. Critically, one of the most worrying signs is the increasing number of people who have lost confidence in the industry. This includes people who have worked in the industry for many years, or even young graduates who are currently pursuing degrees in hospitality or tourism. From our report, one in five people surveyed said that they no longer wished to pursue careers in the industry, and are instead opting for alternatives like IT, Healthcare and Education – the top three sectors currently sought after. So potentially, I think this is a huge concern for the travel and hospitality industry and one that will need to be addressed in the future.
Our report indicated that 22 percent of hiring managers predict further retrenchments in 2021. This doesn’t surprise me because I think most countries’ job support schemes did what they were supposed to do and helped soften the impact in 2020. However, most of these initiatives are concluding this year, and we could see further adjustments to headcounts as true payroll costs become clearer to organisations. The other significant number we saw in our report was that 21 percent of hiring managers were uncertain or undecided about their headcounts in 2021 – almost as many as those predicting further retrenchments. Depending on which way these 21 percent of hiring managers swing, we might see either higher or lower retrenchment numbers this year.
I think that clear and honest communication is critical as we are in unprecedented times and emotions are running high – most employees are aware of the situation. In our report, the majority of staff (56 percent) indicated that their company had handled the pandemic well. What HR teams will need to do post-COVID is to evaluate which aspects of their policy worked well and which didn’t. It might be tempting to continue working from home in order to save on office expenses, yet this might not be a one-size-fits-all solution for all companies. How changes in working arrangements impact an organisation, particularly its culture, will need to be closely analysed.
Tourism comprises a huge part of most countries’ GDP, so I have no doubt that governments will prioritise efforts and focus on the sector once it is deemed safe to do so. I think most will probably start with areas yielding higher spend first, such as bringing back business travel and the MICE industry before leisure tourism. We should see more travel bubbles as the year progresses and vaccinations ramp up, and travel should start to recover by the end of 2021 and into the next year.
Read also: The New Face of HR in the Phygital Workplace: Q&A with Ann Marr, Executive VP, Global Human Resources, World Wide Technology
About Andrew Chan
As the Founder and CEO of ACI HR Solutions, Andrew Chan is responsible for establishing the firm’s strategic direction, managing operations and ensuring complete customer satisfaction. With over 20 years of business experience, and having worked with prestigious brands such as Singapore Airlines and the Carlton Hotel Group, Andrew brings a broad base of business and hospitality experience to the firm. Andrew honed his leadership skills during his tenures with Hospitality Marketing Concepts (HMC) and TMS Asia Pacific, which have in turn prepared him well for his current role as the Founder and CEO of ACI HR Solutions where he has established himself as one of the leading HR, Talent and Recruitment experts in the travel, tourism and hospitality sector.
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