Post-lockdown social distancing an enduring threat to travel and leisure sector

In contrast, social and leisure activities and transportation hubs are where the greatest risks to an extended period of sub-par profitability lie in our view. These sectors are likely to suffer the longest coronavirus restrictions. Large gatherings of people are unlikely to be permitted until there is confidence that sufficiently effective tracking technology is available which can mitigate a potentially major super-spreader event, but without shuttering the economy.

The inherent biological risks in large social gatherings will unfortunately have significant implications for live sporting events, the gambling sector and other leisure activities.

The resumption of international travel carries further political question marks, given the lack of a globally coordinated response to COVID-19. Politically, it will be difficult to sanction the resumption of flights to foreign destinations unless there is confidence that the corresponding nation has the epidemic properly controlled and sufficient monitoring is in place to ensure the health and tracking of passengers returning from trips overseas.

In turn from a demand perspective, passengers are unlikely to wish to travel until there is confidence self-isolation will not be necessary upon their return home, as currently mooted in the UK in recent days.

The considerations for business owners are not just biological as there are likely to be serious profitability issues in the service sector for as long as social distancing remains in place. Most obviously many bars, restaurants and other entertainment venues will be unprofitable if forced to comply with social distancing measures such as closed bar areas and enforced table spacing.

In the circumstances, many hospitality venues may choose to remain closed. Airline profitability would be significantly impacted by current suggestions to vacate the middle seat while lost revenues from ticket sales at sporting events may prejudice the sporting calendar even after fixtures are allowed.

Edison Group – also photo

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