The Economic Cost Of The Pandemic

On the third day of deconfinement in France, glimpses of a post COVID life start appearing, within the rules of social distancing still required by the government.

What is interesting is where the lines seem to be drawn:

Restaurants are imposed 2 meters between each guest, which effectively cuts the restaurant capacity in half at any given time.

Trains, trying to maintain the 2 meters between each passenger, sell one seat out two, and one row out of two. Even at the station, X’s mark the spot where passengers are allowed to stand to wait for the train.

Flights require you to wear a mask and continue to operate as normal.

The rationale behind this is purely economic: any plane is only profitable operating at a minimum 75% capacity. Air France already has a debt of € 1,8 billion and is preparing itself to make more job cuts in the coming weeks.

The reality is: the economic cost of the epidemic largely overshadows the medical cost. I carefully chose the word “medical” over “human” because the human impact of the economic losses will no doubt cause more suffering, and that over a longer period of time.

The post COVID will not be the same. The impact of this crisis will have long-lasting effects across the board, and the Travel and Tourism Industry will be one of the worst-hit (it already is). The above examples are clear: the economics will never be the same again, the revenues will never be the same again. As such, it would be irresponsible to continue operating on the same cost structure – continue paying large commissions to OTA’s, continue paying high transaction costs, continue waiting 90 days for refunds, tolerating the high fraud levels inherent to outdated technologies. COVID has opened the eyes of the industry that a revolution of thinking needs to happen – new technologies such as blockchain and tokenization can solve much of the industries inefficiencies. We must act now to embrace a new world tomorrow.