What a difference a war makes
War has a way of exposing vulnerabilities that arise from interconnection – Peter Goodman
The sight of Dubai’s Fairmont ‘The Palm’ hotel ablaze following an Iranian missile strike, during the fourth day of the war in the Middle East, was a stark reminder that hospitality remains resilient to geopolitical factors only to a certain point.
With roughly 12% of the world’s air traffic relying on the Middle East as a giant transit lounge, it is no secret that it is one of the busiest and most lucrative markets in the world of commercial aviation. Handily located at the crossroads of Europe and Asia, the region has become a go-to stopover for passengers making long intercontinental journeys, resulting in its 'big three' airlines (Emirates, Etihad, and Qatar Airways) establishing themselves as key players. Now, however, the conflict has caused chaos with some of the world’s busiest hubs caught in the crossfire.
According to Sri Lankan Tourism authorities, a one-week closure of Middle East airspace will deny Sri Lanka US$ 15 million in tourism revenue as around one-third of all arrivals to Sri Lanka take place through that region. Major Gulf carriers collectively form the second pillar of Sri Lanka’s air connectivity behind the national carrier. Qatar Airways, Emirates, Etihad Airways, Fly Dubai and Air Arabia together brought in 93,858 passengers to Sri Lanka in January, representing about 33.8 percent of all arrivals for that month.
Last year, Europe alone accounted for 51.3%, of all tourist arrivals with countries like the UK, Russia, Germany and France, leading the charge. Thus, the competitive landscape of airlines facilitating this traffic, further mirror this dependency, whilst exposing a critical vulnerability for Sri Lanka’s tourism sector.
Accessing the impact on the island’s tourism industry, should the Middle East airspace remain closed or restricted for weeks, (more likely months), since the war began, it could mean a huge loss of revenue for Sri Lanka.
Sri Lanka Tourism’s anguish will not ease even when the war ends. Because its off-season period will or would have commenced, with airlines then implementing summer flight schedules with increased airfares due to high oil prices, fluctuating exchange rates and to make up for losses incurred during the war. This will affect travelers across all markets, making long-haul flights affordable only for high-spending travelers, although shorter flights will see the least adjustment.
While assessing the decline in tourism arrivals and receipts may be easy, peering beyond the fog of war and staying resilient and overcoming the current situation is hard. The reality is that Sri Lanka’s tourism industry has to make a number of decisions extremely quickly to try to hold on to whatever cash flow the hotels and other stakeholders could retain. And while we clearly don’t have time to study every ramification of every decision, we need to move forward immediately and then adjust as we proceed.
COVID is the biggest staring-in-your-face example, where in March 2020; we were looking down the gun barrel, after revenues dropped 100% for nearly all our hotels, as the world practically shut down. March this year, marked six years since Covid shut down global travel. That anniversary arrived with another crisis in the Middle East and another unwelcome chance to see whether the industry absorbed any of the lessons it swore it had learned.
When one thinks about the key lessons learned, certainly during the pandemic, the easiest one to point to, is that time is of the essence in a crisis — being able to pull things together quickly and have the team focus very squarely on the top priorities.
Shafeek Wahab - Editor, Hospitality Sri Lanka, Consultant, Trainer, Motivational Speaker, Mystery Guest Auditor, Ex-Hotelier
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