Is There Any Light at the End of the Tunnel?

The events in Paris and Beirut over the past few weeks have had a cascading effect on global society at many levels. The attacks have highlighted issues such as migration and refugees in Europe, increased security checks on travellers of every description, and naturally, on the prospects for foreign travel everywhere. It is the randomness and horror of such terrorist activity, designed to promote fear and a sense of insecurity among the public, that makes it such a potent weapon. It immediately creates a climate of anxiety that begins to threaten even day-to-day life, resulting people clinging to the familiar, reluctant to even travel locally, let alone internationally.

It could be said that these incidents have created a heighted sense of unease amongst prospective and confirmed travellers, leading to cancellations of bookings or even reconsidering possible destinations due to security concerns. We in South Africa have long been exposed to aspects of negative publicity – particularly in terms of violent crime and recently the visa debacle – and have had to develop ways of dealing with this. They remain facts that we must both acknowledge and accept, but generally we are able to find some compensatory factors that can be promoted to counter the apprehension expressed by our travel customers. This is patently obvious since South Africa remains a popular destination for many thousands every year.

A fundamental rule of successful public relations is that one should always deal with bad news up front. There is little point in trying to deny it or hide it under the carpet, because when such information subsequently becomes public – as it inevitably does – it undermines the trust that people may have had in you. Most people would rather know bad news sooner rather than later. To this end it is crucial that we have as much knowledge about events and circumstances as possible, since only then can we realistically provide facts to those who enquire. Also being well informed allows us to make considered statements, risk assessments and public assurances that are all necessary to maintain business relationships with operators and customers alike.

So we must acknowledge that there will be disruption to travel and inconvenience to travellers, in some instance and some destinations this may even be quite considerable. But forewarned is forearmed, and if people are sufficiently prepared for what they are likely to encounter in terms of inconvenience they will be less inclined to blame those in the travel industry for their discomforts.

Having confronted this rather gloomy scenario, is there anything on the horizon that might bring us some cheer?

Well there is a rumour circulating among some economists that the price of crude is set to fall further, and lower fuel costs are always a boon to the travel industry, it is after all, part of our lifeblood. Nassim Taleb, whose 2007 book The Black Swan: The impact of the Highly Improbable, described the extreme impact that certain rare and unpredictable events can have on economies. The idea is centred around: ‘our blindness with respect to randomness, particularly large deviations’. He has made a considerable fortune understanding risk (and also explaining why most of us don’t understand it!). At a recent economics conference in Kilkenny, Ireland, he ventured the opinion that oil prices are headed dramatically downwards. He further suggested that the Saudi economy is far from robust and could even go broke. The consequences of this would put crude into free fall.

Now while that isn’t a brilliant scenario for the oil producing countries it would have a positive and uplifting impact on global travel, because as any elementary economics student will tell you, there is a very direct correlation between price and demand: the higher the price the less demand, and conversely, make things cheaper and more people will buy them. You only have to look at the success of Tony O’Leary’s Ryanair venture (now Europe’s biggest independent airline) to know that the formula works. So we might yet see a boom in business in the not too distant future…

Linda Pampallis – CEO Thompsons Africa

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