2022 for tourism and aviation: the 5 top challenges · p. 417 - SkyUp Airlines

2022 for tourism and aviation: the 5 top challenges

31 Jan 2022

The tourism and aviation remain the most affected by the pandemic sectors of the economy. But, as is often the case, local challenges are added to Ukraine's global problems. This multiplies all the negative factors several times, and to maintain the position you need to act much more effectively than competitors from other countries. Co-Founder of SkyUp Airlines and Join UP! Oleksandr Alba has written an article on this issue for nv.ua, which with the permission of the editorial board we publish in full on our website.

Oleksandr Alba, Co-Founder of SkyUp Airlines, Join UP!

1.To return clear rules of the game

The most unexpected event of the end of 2021 is the reaction of world powers to a new strain of coronavirus. Despite the positive news about the acceleration of vaccinations, new effective forms of vaccines, the approvement of the first drugs against coronavirus, we are again seeing chaotic actions and closing borders. The worst thing is that it is done in a day. Such actions do not leave tourists the opportunity to adapt and businesses to stabilize the process.

The International Civil Aviation Organization (ICAO) and the World Tourism Organization (UNWTO) issued a joint statement in early December calling the border closures discriminatory and ineffective. And this is true: the strain has already spread, and the negative impact on the economy will be significant. The world must learn to act in harmony and not panic.

Business has learned to operate in these extreme conditions: we have developed mechanics that protect travelers from the unexpected. Among them: travel insurance, if tourists happen to be tested positive for COVID-19; the possibility of postponing tours, or loyal approaches to changing travel destinations; flexible fares that allow you to postpone departure without penalties. We also comply with all refund requirements. However, if the situation is not as stressful for final consumers as it was at the beginning of the pandemic, the tension on business remains unchanged.

2. Reduce Ukraine's risk

Our tourism and aviation industries need to compete in the global marketplace, so the problems of the whole country affect us as well. The riskiness of investment can be seen on their own - new international hotel chains have not been appearing in Ukraine for many years. Therefore, the challenge for next year is to make international investors work more actively with Ukraine. In addition to increasing budget revenues at various levels, it will also help to strengthen the country's reputation and thus help us to attract more foreign tourists.

What is not so noticeable outside the tourism industry - the difficulty of working with foreign partners. Hotel owners do not want to take another risk and reserve places for tourists from Ukraine, but try to fill the rooms with citizens of other countries, for whom the borders are unlikely to close. We are looking for ways to offer Ukrainians as many travel opportunities as possible, but we need transparency and predictability.

3. To accelerate the development of tourist infrastructure

In 2021, probably everyone has heard about the phenomenon of tourists from the Persian Gulf, and most of all, from Saudi Arabia. During the season, our country was visited by more than 35 thousand tourists from the Persian Gulf, who spent almost a billion hryvnias. The secret of success is simple: European borders were closed, and Ukraine has proposed visa liberalisation and convenient flights. This turned out to be enough to make the Carpathians a place of attraction for tourists.

Maintaining this flow next year is another challenge for the industry. European borders may already be open to tourists from the region, so this advantage will disappear and competition will intensify. Is there enough infrastructure in Ukraine that satisfies tourists accustomed to comfort? We, as a tour operator, find offers, but we already feel that they are not enough. Ukraine has only recently begun important work on standardizing hotels and rating them with stars. The State Agency for Tourism Development is doing this well, but business needs to accelerate. And this requires incentive programs.

The same goes for airports. We already need more capacity in key cities: airports must be equipped with modern technological solutions to avoid getting stuck in fog or light snow. At present, many new airports in the regions are not needed as much as the current development of those that are already operating. It is important that at least part of the resources received from foreign tourists be directed to the development of the industry. All these are essential to preserve the flow of inbound tourism.

4. To maintain efficiency in uneven conditions

In 2022, a completely new period will begin for the Ukrainian airline business: "open skies" should start working, and the state will now be not only a regulator, but also a player with its own airline.

However, the most important thing remains: the lack of support programs that were supposed to work during the 2020 lockdown. These circumstances will continue to affect the situation in the industry for a long time to come, because unequal conditions of competition with foreign players were established, which had received billions of support from their countries.

Preferences for international companies are now being added to this. Thanks to the Open Skies Agreement, they will be able to operate domestic flights in Ukraine, but we within the EU – will not. Even the abolition of domestic VAT and fuel excise taxes, which have been talked about in the industry for a long time, will only partially improve the situation in such conditions.

In 2022, the turbulence period for the airline business will continue, and we are already developing a flight program so as to remain cost-effective - offering only those destinations that are in stable demand.

5. Make Ukrainian attractive to Ukrainians

Ukrainian airlines and travel companies need to compete globally, but we retain our identity. For us, the main thing is to create opportunities for all Ukrainians to discover the world, and guests from other countries - to explore Ukraine. But the challenge for the whole industry is to make Ukrainian attractive to Ukrainians.

The long-awaited arrival of new international players in the aviation market will not contribute to development, but will only help fill the budgets of other countries. And, of course, as soon as it becomes unprofitable to fly, they will leave the market. We are already seeing global low-cost carriers significantly reduce flights from Ukraine amid the spread of a new strain of coronavirus.

They can be understood - business profitability is more important, and our country is only one of the world's markets for them. But this is their key difference from Ukrainian business: they can transfer airplanes to another profitable region, but we can't. Our business remains here, and we will develop air transportation and tourism despite all obstacles.

The previous two years have been extremely difficult for the industry and have forced us to significantly review our business strategies, optimize resources, and learn to be flexible and quick in decision making. This is what allows us to be ready for the challenges of 2022. However, in order to truly bring Ukrainian tourism and aviation to a new level, the state must be a regulator, not a competitor, while society must become the partner in making Ukrainian goods and services fancy