Travel Agencies: A Sector Hit by the COVID-19 Crisis

Travel Agencies: A Sector Hit by the COVID-19 Crisis

Noelia Araújo Vila, Diego R. Toubes, Lucília Cardoso
DOI: 10.4018/978-1-7998-6996-2.ch010
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The whole world is going through an unprecedented health crisis, which has affected all sectors of global economy. In actual context, the tourism industry is particularly affected by COVID-19. In this context, the present chapter focuses on one specific subsector: travel agencies. These companies have not only stopped booking new trips, but also had to cancel bookings made prior to 2020. Therefore, many agencies did not manage to survive, and those that did are struggling. Considering this scenario, the present study aims to characterise the state of the art on this phenomenon – the effects of COVID-19 on travel agencies. To this end, all studies containing the keywords “covid” and “travel agency” published on the Scopus database were retrieved and subjected to a content analysis. The findings reveal a greater use of new technologies and online platforms. Moreover, studies point to a focus on sustainable and inclusive tourism, as well as on so far neglected market segments, as alternatives for recovering this sector.
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The Covid-19 crisis is unlike any other crisis in recent history, as previous pandemics were limited to specific regions, and have lasted in relatively shorter periods. Consequently, their death toll was much smaller compared to that of Covid-19 (Miao et al., 2021). Although this scenario affects every sector of the global economy, the tourism industry has been particularly harmed. Due to the intangible nature of the tourism product, destinations are especially vulnerable to perceptions of risk by consumers. There is a large body of academic literature examining how tourism reacts to and recovers from crises. Disruptive events that affect tourism are caused by many factors. Amongst those, geopolitical factors, such as political instability, military conflicts, terrorism, receive particular attention (Ivanov et al., 2020). However, tourism is often also severely affected by social, ecological, and economic crises.

Since March 13, 2020, the world has been experiencing an unprecedented health crisis, which has led to total lockdown periods in many countries. For over a year, mobility within and between countries and cities has been limited. This scenario has caused unprecedented damage to the travel and tourism industry, as it is essentially dependent on human mobility (Gössling, Scott & Hall, 2020). Low-income countries have been particularly affected, as they often lack transparency regarding public health measures, and have poor public health infrastructure (Karabulut, Bilgin, Demir & Doker, 2020). The world is currently facing the third wave of this pandemic, with expectations of entering a fourth wave soon. The hospitality and catering sectors have temporarily closed completely in many countries. In other countries, such as Spain, these sectors have been partially closed.

One of the key subsectors of the tourism industry is that of travel agencies, which have also been severely affected by the health crisis. As travel agencies work with bookings in advance, they have sustained considerable losses, since they had to cancel reservations made before the beginning of the crisis, and on top of that, are severely limited in terms of making new reservations. Moreover, they must play the role of intermediaries between their customers and providers regarding cancellations. The period is of extreme uncertainty, as mobility restrictions depend on the regulations established by national and local governments, which are frequently changing in response to the evolution in the number of Covid cases. Therefore, the demand for travel reservations has significantly decreased, and many tourists had to cancel reservations due to changes in the mobility restrictions either in their own country or in the destination. Many studies have examined the devastating impacts of Covid-19 on the tourism industry, which is to be expected since tourism is known to decline in response to health risks (Yang, Zhang and Chen, 2020). In this context, the present chapter focuses on the particularly affected subsector of travel agencies.

The goal of the present study is to characterise the state of the art on effects of Covid-19 on travel agencies, highlighting the main problems the sector is going through, and the strategies it must follow to survive in this disruptive scenario. To this end, a review of the literature on travel agencies was first carried out. In particular, two headings are presented: Adaptation of the travel agency sector to the digital world and the context of “smart” industry and The Impact of the Covid-19 pandemic on travel agencies. The methodology of the study is described below. All academic literature published containing the keywords “covid” and “travel agency”, was collected from the Scopus database, resulting in a total of 56 articles. These articles were subjected to a deductive content analysis. The following section shows the results, and finally the main conclusions are presented. The findings show that the travel agency sector is constantly reinventing itself to adapt to new conditions. During the present crisis, the analysed studies reveal new trends, such as a focus on sustainable and inclusive tourism, as well as on the far neglected market segments.

Key Terms in this Chapter

Resilience: Ability to adapt to an adversary of situation. Smart tourism: refers to the application of information and communication technologies, similar to smart cities, for the development of innovative tools and approaches to improve tourism.

Digital Industry: Introduction and application of digital technology to all factory production systems and processes, as in the relationship with customers.

Blockchain: Single record, consensual, and distributed across multiple nodes in red. Usability: Quality of the website or computer program that are easy to use and facilitate the reading of texts, quickly download the information and present simple functions and menus, so the user finds their queries and comfortable their use.

Inclusive Tourism: It is tourism that allows equal opportunities, of all people, to develop all the actions that make up the tourist activity in a safe, comfortable, autonomous, and standardised way, and that also tries to seek economic profitability, seeking to benefit both the person with disabilities and the companies of the sector.

Alternative Tourism: Refers to those trips that are intended to carry out recreational activities in direct contact with nature and cultural expressions that envelop you with an attitude and commitment to know respect, enjoy and participate in the conservation of natural and cultural resources. Alternative tourism covers a wide range of activities, but more generally, it is defined as “forms of tourism consistent with natural, social and community values and that allow both hosts and visitors to enjoy positive and highly appreciable interaction and a shared experience” ( Wearing & Neil, 1999 , p. 3).

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