"It's Just a Matter of Time." I always thought Brook Benton had one of the best baritone voices around, and one of his signature songs set me to thinking today about all that is going on.
Heading into month 10 of the Covid pandemic finds the travel industry still in disarray. Forty-three airlines have ceased operations thus far, and more are almost certain to follow, though airline failures are more common than one might assume. The major cruise line corporations have survived through skillful management and access to capital.
The retail channel has held up far better than I projected early on because advisors and agency owners have worked diligently to secure financing and the working capital needed to survive. Granted, there have been a few closures, mergers and buy-sell agreements, but not nearly as severe as would have been the case without PPP and other relief.
The CDC allowed the No Sail Order through Oct. 31 to expire and introduced a conditional return to sailing. It was interesting to observe stock market reaction to the news. The spike in prices clearly illustrated an enthusiastic response to the announcement.
Never mind that the fine print in the 40-page ruling required:
- Sixty days advance notice and approval to resume sailing.
- Each passenger to be tested for the coronavirus getting on the ship as well as getting off.
- Crew quarters sleeping and sanitary restrictions that would mean a fair number of revenue-producing staterooms would have to be dedicated to the crew.
The order thus amounted to a de facto no sail order through the end of the year.
In two surveys our agency conducted and another by a very large agency, we indeed found tremendous pent-up demand for a return to cruising. This was especially so for respondents over age 55. And a majority, regardless of age, told us that they weren't going to go anywhere until there was a proven vaccine and Covid cases dropped near zero.
That's why news about effective vaccines was so welcome. Yes, we are several months away, but the imminent availability of an effective vaccine sent cruise stocks soaring.
The election is past. What is needed now is for the Senate and House of Representatives to focus on the next round of stimulus spending to buy time for struggling small businesses in all industries. Senate bill S-3814 and House resolution H.R. 7481 (the Restart legislation) is critically important, and I urge all reading this to contact legislators in their area.
The travel industry, especially the retail sector, needs another six to nine months of operating capital. I remain confident that most agencies will not see positive cash flow, let alone profitability, before August.
It's like this: There are so many moving parts that need to be flanged up to rebuild the travel industry. We see news and reports daily that are encouraging and raise hope for a positive turnaround. With all these upbeat indicators, I am certain the return to normalcy is closer than ever before. As Brook Benton sang all those years ago, "it's just a matter of time."