Editorial

There will likely never be another year like 2020 – we hope. Though as we stand at the juncture of a new year, it’s hard to actually visualise what 2021 will be allowed to look like. No -one could have predicted the farce which played out this year, that’s not to demean the fact that the Coronavirus is a nasty piece of work that certainly has sting to it. Its severity may or may not be exaggerated but the farce in question belongs not to the illness itself, but to the baggage around it.

The news we see in our numerous feeds from the media only seems to focus on bad news, these bad news stories seem to gather momentum faster than a spring avalanche with media contributors fighting each other to create the most news worthy bad news story; whether it’s true or otherwise is irrelevant. The point is now reached where most level headed people question anything they read, though getting to read any news can be a challenge as we now have a new role in our society that was once the jurisdiction of authoritarian regimes that we in the west chastised; the censor. Officially the don’t exist, but in our new real world they most certainly do, much to the chagrin of everyday people. These are the anonymous people who took down an article on an individual’s website that was questioning the original thinking about how the new virus spread – except the censor didn’t release it was actually a cut and paste from the WHO own website. Or how about the shock horror story of the 5G conspiracy theorists who burned down 5G receivers and thus threatening the lives of medics and loved ones of people ill in one particular nearby temporary medical facility in the UK, except the Prime Minister three days later announced the facility was being stood down having never been used. Or what of the people who were advised they had tested positive for the Virus; except they weren’t tested, having left before their test as the queue was too long. Such stories go on and on and on but for anyone who challenges the system they had better have thick skins or no desire to be successful in later life. The way the free world west has controlled the media would leave these aforementioned authoritarian regimes looking on in awe and admiration. No-one could imagine that level headed people would be convinced to drive alone in their own cars wearing a face mask on. As some have pointed out, it’s easy to see how oppressive regimes such as Hitler and Communism grew as they manifested themselves amongst a passive population controlled by an active minority.

Back in 1963, President JF Kennedy was assassinated in Dallas. Two things are known about that day: first the president was indeed killed and second, as history now shows some 57 years later, the rest of the story put out at the time about the assassination was complete balls. Here in 2020, the fact is that already over 1.5 m people are listed as having died of the Virus, apparently. The 35 million who have died over the years from HIV or the 500,000 who die in Africa each year from Malaria don’t get a look in as that’s not fashionable anymore. In 57 years time, documentaries and articles will show that what the media reported, what the scientists said and what the role was of politicians during 2020 as they batted to get fame for themselves was quite similar to the nonsense put out around the death of JFK in 1963.

Hans Christian Andersen wrote the fairy tale “’The Emperor’s New Clothes”, if anyone doesn’t know the tale, they should read it. Eventually a child stood up and called a spade a spade (the English medieval metaphor as opposed to the new use with racial connotations). Let’s hope someone has the guts to stand up to the system once again.

So as one year ends and another starts, let’s hope that journalists the world over make a new year’s resolution to talk positive and not negatively. That the feel good and feel safe factor that surrounds the new Coronavirus jabs helps people regain the confidence to travel again and helps everyone get back to living their life as they once knew. Let’s hope the medica on the front line are not forgotten at the end of all this for it is they who have suffered more than anyone else (July/August article) The world of travel will definitely not be the same again for some time, maybe never, but now that people have seen the positives and negatives of working from home, from not being able to visit loved ones and from being restricted from the joys and pleasures of family summer or winter holidays, these same people should at least have the ability to decide for themselves what sort of life they wish to lead. Roll on 2021.

January

March

The airline industry operates a unique business model, rather than borrowing money from the banks like normal people, they borrow from their clients in the form of advance payments for future flight tickets which they then use to fund their current business operations. If the clients want their money back i.e. they don’t travel, the airlines are powerful enough to tell the money lenders (the travellers), they can’t have it until they decide to re-pay it, if at all. Try telling that to your bank manager:-

Airlines – above the law

The airline fraternity is angry with the EU, though thank goodness the EU has maintained its stance on being the defender of the consumer. In short, the airlines want to keep passenger’s money for flights that they have either had to cancel or government restrictions means they can’t operate. As we type, there are virtually no commercial flights taking place around Europe; what is operating is miniscule and no doubt by the end of March they will have stopped as the world is “’re-set”. There is no point in listing which airline and which routes may still be operating as this is fruitless. In any case people aren’t travelling; period.  This of course leaves a massive hole in the cash flow of airlines who of course are the first in the queue to knock at their government’s door. Not forgetting of course that EU laws forbid state support of any airlines – sort of, or when it suits.

Anyhow back to the airlines, obviously they are desperately short of cash so many decided to re interpret/ignore EU rules on their obligations towards passengers. What many sought to do and indeed still try to do so, is to restrict refunds for flights and instead offer vouchers for use at a future date; which on the quiet, have a use by date on them which is not too far in the future. The airlines need this “” cheap” cash for their cash-flow, borrowing money from a bank is too expensive. The airlines seem to consider this as being in their rights and don’t for one moment think this is unethical. So, the scenario is, an individual, a small business operator or even a bit multi-national, can’t get his money back now at the time he really needs it because the airline thinks that they are higher in the pecking order to keep themselves alive than the individual, small business operator or multi-national. Additionally, if the airlines can’t keep these funds, how will they pay shareholder dividends they promised? sic

We should point out that not all airlines have taken this stance but even those who have refrained from such action, would be the first to cheer if this were ever allowed legally by the EU. In essence, all passengers have the right to a refund if their flight is cancelled, it is another matter of how fast the airline, IATA or whoever collects the money on the airline’s behalf, processes the refund and gets it back to its owners.

For the airlines desperate to get some cash, may we suggest the speak to a) the banks like everyone else, b) existing shareholders or c) potential investors who understand the airline business model who must realise you have to give before you can take.

Of course, if you are an American airline and part of the system that punishes and even tries to ban organisations involved in travel that are seen or perceived to benefit from state handouts; your government is giving you 25 billion USD in loans and 25 billion USD in grants (state handouts).  We assume the noises from the USA chastising the Gulf carriers will now be buried once and for all.

April

This article was picked up by various media outlets (fame!) although the jury is still out on just how accurate its forecast will be. As the flu pandemic continued, the noises from the airlines echoed the articles sentiments; that fares would increase as the supply of seat diminished and costs to cover new processes to make flying safer would incur expense.

Which way will airfares head?

Whenever and if ever the world of travel re-starts, things are most definitely not going to be as they were when the world stopped. This also applies to the cost of air travel; the problem is, no-one is quite sure whether fares will head north or south. Put another way, whether they will “’increase or decrease”.

If we apply a combination of logic and experience and add in the words of Ryanair’s outspoken CEO Micheal O’ Leary, when the pandemic stops, there’s “’going to be massive discounting going on”’. Translated; airlines will dump their fares in an attempt to entice people to travel again. A reasonably logical way of thinking and a model that has worked before. However, there is also the other side of the fence to look at.

The alternative thought fly’s in the opposite direction – if you pardon the pun – of logic and also of  Mr O’’Leary’s optimistic thinking.  What is different this time around is that planes have been permanently taken out of operation by airlines; staff have been either made redundant or put on leave in their tens of thousands; the supply chain involved in aviation such as ground handling and catering as been almost wiped out; but perhaps more importantly, people’s hunger for travel has been curtailed. Whichever way you look at it, if last year was 100, this year will be 25 in terms of demand and supply, view this in relation to whatever you wish.

Planes cannot be rolled out of the garage and started again at the snap of the fingers, popular routes where there were 10 flights per day will initially at first see 1 or 2 per day being operated. Routes that were marginal in respect of being profitable or not will be ignored for the time being as valuable resources are aimed at those routes were some profit can be made. An excellent example of this is some of the seasonal routes that Ryanair operate between Germany and Croatia: cancelled for the rest of the year before they began. The risk of low demand means Ryanair won’t waste its time on devoting resources which head down a black hole.

Look at the economics of flying from another angle. If you used to have 4 flights a day between A and B and each flight takes 100 people, that’s 400 passengers per day. If now the demand is forecasted to be 100 people per day, then test the market with 1 flight per day, hoping that demand matches or outstrips supply. If so, you then charge a premium from people desperate to travel as all seats will be sold. The 1 flight will be profitable; running 2 or more flights won’t be.  This is likely to be the default setting certainly in the short term and even into the medium term. The medium term we could also be talking of as being well into the next year. One simple example that may support this notion is the comment from Air France/KLM that they plan to “’ run (just) 30% of their usual flights from July onwards”’.

The bottom line is therefore likely to be that when travel re-starts, whilst hotels may be offering a good deal in an attempt to get occupancy up, the cost of getting to those hotels might come as an expensive shock.

May

Summer has been and gone and for many people, it will have been the first for many a day without the annual summer holiday. Summer was effectively cancelled by European governments. The fallout in terms of business failures is still in limbo as governments make half-hearted gestures to pay out compensation that seems to go everywhere except to those most impacted. The winter ski season my see similar issues and no doubt further fall out with the small business owner the likely victim.

Summer is here – but not as we may know it

The summer holiday for many people is a “rite” as opposed to being an option. There are times of course through life when each of us has to forgo this annual event but that makes us only more determined to enjoy the following years holidays even more. Now that society in the past few months appears to have been educated to think in a totally different manner, just how much the human mind and human desire has been changed irrevocably may be measured in how many people demand their two weeks in the sun or whatever form of annual relaxation they prefer. Another question that comes into the remit is whether summer tourism (or indeed any tourism) is now top of the pile as an economic tool of necessity for governments reliant on tourism to provide a chunk of the annual GDP.

Cutting out the ifs and buts which, by the time this is read anyway may have changed, much of Europe seems to be following the same manicured script in what they do, when they do it and how they do it. Of course, there is the odd variation but this is akin to whether you like salt on your food or not; it doesn’t alter the core of the meal you are getting.  The 1^st and the 15^th of each month seem to be the yardstick from which the “’next’ phase begins. Thus applying this in general terms to an here and now situation, the 1^st June will see an easing of many of the restrictions the population across Europe face then on the 15^th we will see an even bigger relaxation of restrictions as the ability of more and more – though not all – people to travel as more and more border crossings are opened will take effect. Then come the 1^st July, you will see a noticeable increase in flights between countries, these having been slowly started from around mid June. Come the 1^st July we will be as near to “’as was” as is possible. This will mean the annual summer holiday is once again on the radar for most people. We add ‘most” people, as most will still be able to grab a summer holiday but maybe not all. The elephant in the corner for popular holiday destinations like Greece and Spain is the source markets that bring in big numbers of visitors, but which are still in the middle of the pandemic i.e. the UK and Russia.

So where do economics fit into all this? Simply, many countries realised that the contribution to the GDP that tourism makes cannot be replicated nor compensated for, this is in both economic and human terms. Generous handouts to business etc are a popular vote winner from a government perspective, but then the reality kicks in that these have to be paid for, somehow. When the Coronavirus first appeared, we made the comment that if the government could keep the local population within its own borders for summer then that would keep up to 1 billion Euro in the Bulgarian economy that would otherwise be lost to destinations like Greece, Spain and Italy. Whilst the government bean counters would appreciate this income, if tourists from Bulgaria are prevented from leaving the country then likewise tourists from other countries would be prevented from entering! The loss from this based on 2019 figures would be 3.7 billion Euro’s in lost tourism income. The same thinking would no doubt apply to those making tourism decisions in other popular summer destinations, hence the 1^st July date for the “’re-opening” of the summer tourism industry as governments across Europe engage damage limitation mode and try to kick start their own economies.

June

The absurdity of it all is best summarised with this true story on our own doorstep:-

Silly but sadly true

Some impressive knowledge of Geography was exhibited at Sofia Airport recently. As the Bulgarian quarantine rules required British and other nationalities to observe 14 days of isolation if travelling from the UK, a border official asked a man on arrival at Sofia from London Heathrow if he was English? To which he replied with honesty “’No, I am Scottish””.  The border officer replied “”Oh, that’s OK then you don’t have to do quarantine”’.

July/August

As the full effect of the new world order became apparent, for anyone who cared to look just a little closer at facts and figures, this new world seemed to have already made a four year plan for how the world will operate. Not for the first time though one asks just who gets the money and who bears the brunt of the episode? In this case, rather like in World War 1, it’s the front line and not the ones pulling the string.

Winners and Losers

Before I start, the figures below are widely available from wherever one looks; whether they are factual in reality is a totally different matter. Also, the opinions or thoughts given seem, perhaps surprisingly, to resonate with many who care to “be bothered” about the current never-ending pandemic farce. Whether they are correct or not is probably no worse in its accuracy as the decisions being made across the globe by people ill equipped and without any pre-requisite knowledge of the subject matters they are giving an advice on (bureaucrats), nor of the repercussions these ill thought out decisions are having on much of the population across the globe.

The first obvious comment is that aside of the fact that those making decisions both globally and within Europe are often the least best positioned to do so, the other side of the fence is that as long as they can, these people will continue to make themselves invaluable so that their salary continues. Indeed, those least affected by the coronavirus are the ones making the decisions: a most definite self-interest bonus. Week after week these same decision makers are the ones who get “’Caught’” doing the things they shouldn’t after spending countless amounts of energy telling others to do exactly what they are not doing. Their crime would appear to be, “Getting caught”. It’s almost as if there is one rule for some and one rule for the rest and like with many people who have risen by fair means or foul, the rules for the masses they seek to control don’t apply to them. The benefits of Social distancing and the wearing of masks is of arguable benefit at the best of times and would appear to be more of a test of discovering how people respond to civil order requests than it is to reduce the spread of a virus. Having just watched the Champions League Final with its thousands of protocols in place such as the separation of the teams before the game and the spreading out of the small number of staff allowed in the stadium, even with the teams substitutes spread 3 seats apart; what happens at the final whistle? The whole entourage rushes onto the pitch and hug and kiss each other. A perfect example of paying lip service to a situation (literally) if ever there was one.

However back to the Travel and Tourism sector and without doubt this sector, globally, has been affected the most by political decisions. Numbers can be made to read whatever they wish, ask any accountant, but lets look at a few and add two plus two. Using Bulgaria and Greece and their tourism base, Greece generates usually roughly 21.6 Billion Euro in Tourism Revenue and Bulgaria 3.7 Billion Euro. For 2020, this figure will be decimated. The European Union as part of their bailout has ear marked Greece to receive 72 Billion Euro and Bulgaria 29 Billion Euro over four years. The four year aspect is interesting as the question would seem to beg whether this is their random guess how long it will take EU country economies to recover or, whether this is the time frame set in the master plan.  Would it not be reasonable to hope/assume that by summer 2021 the economies of our countries will be bouncing back and the pent-up demand for people to travel will make summer 2021 a bumper year? Is it not possible that by this time the next year the state coffers will have reaped the benefits of income from travel and tourism that will be roughly at the same or even better than they were before the events of this year?  Tourism in Greece is 20% of GDP, in Bulgaria it’s 11%. In short, the generosity (sic) of the EU and the money from it will enable the state coffers of many countries including our two examples to not be running at any noticeable deficit; countries will be able to work on similar sized state budgets as is normal, with the state’s themselves deciding how the money is spent and who gets it. The “’who gets it’” is an interesting point as in theory, the Travel, Tourism and Hospitality sector that is worst impacted at the grass roots level should be a main beneficiary; it is doubtful or questionable if they will be, funds will be directed and re-directed however the decision makers decide.

It’s just over a century ago since the end of World War 1 when around 20 million people lost their lives either as a direct or indirect consequence of the Great War. Most of these were rank and file working class citizens who signed up to the cause in the case of the military or who suffered as civilian’s, very few came from the Upper Classes or the so-called elite class. The current Coronavirus is a much hyped virus that has evolved through medical and political neglect (over many years) and those that will suffer are not the politicians and decision makers but rather like World War 1, the collateral damage will be the small hotel owners and their employees, the restaurants and its waiters, the hotel and bar cleaners, the souvenir shop owners, the transport companies, the airline staff from check in staff to admin staff, the travel agency community and the workers in small enterprises that feed the massive travel, tourism and hospitality industry, They make up  millions of people globally; they would appear though to be the “expendable”.

September

This was also the year when Political Correctness coincided with the re-writing of history. Like all great systems that have had their place in time, not jumping on the bandwagon became a punishable offence. Just what the democratic majority may think is irrelevant; when the system decides all else have to follow:-

Changing History?

The demand for perceived Political Correctness across much, if not most of the western world sees the famous USA ski resort of Squaw Valley deciding it has to change its name. The reason given for the change is that the word “’Squaw” has become a racial and sexist term for Native American women. Not that the majority of level headed people knew this.

A new name will be chosen next year for the resort which for those who don’t have a grasp of Geography, is near Lake Tahoe.

Sounds like the answer doesn’t it!

October

By autumn most normal people were getting thoroughly fed up with the media and those seeking political capital from the opportunities put in front of them. It is perhaps with a sense of humour that Germany’s engineering industry’s elephant in the corner is finally put to bed; albeit it none years late. Better late than never:-

Better Late Than Never

By the time you read this, the new Berlin Airport (BER) will have opened! Usually such an opening is barely worth a mention but the new airport that will serve the German capital has hardly been out of the news for the past decade. The actual opening on the 31^st October will see parallel “’Opening landings” by both Lufthansa and Easyjet planes (the two being the two major airlines in the new airport.

On the 8^th November, the last flight will depart Berlin Tegel airport. This flight will be an Air France flight in recognition of Air France being the first airline to land at Berlin Tegel during the Cold War in January 1960. Tegel itself is actually located in what was the French Sector of Berlin after World War 2.

November

One has to admire the approach of the glass being half full rather than being half empty. However, the local Ministry of Tourism would find it a hard sell saying that the rakia shot glass (the 2020/21 ski season) contains almost as much liquid as a litre stein of beer (the usual season). The summer season had limited success but the prospects of the ski season would appear to match the knowledge of the Tourism Ministry of how things work in tourism despite their optimism (small).

Optimism or Pragmatism

As the first snow of the year appears, thoughts at this time of year usually turn to the forthcoming ski season, this year is of course somewhat different than anyone can remember and the thought of whether to ski or not, let alone where to ski, is more than likely on the back burner. The summer resorts on the Black Sea made a decent attempt of rescuing some sort of business from the summer months despite the deck of cards being stacked against them. Just how successful or not they were is left open for discussion as the usual Press Releases from whatever Ministry is responsible that usually start with “this year XXXX was % higher than the same period last year’, regardless of what they were referring to, seem to be noticeable by their absence. This year that template has most definitely gone out of the window. So now we come to the ski season and the main resorts of Bansko, Borovets and Pamporovo are no doubt chewing their finger nails as to what the winter holds in store for them.

The one thing that is for sure is that winter will be a battle for survival and that battle is not being helped by the governments of Germany, France and Italy proposing to the other Eu members that their ski resorts remain shut until January. Austria is against this suggestion and so too is Bulgaria. The Bulgarian Ministry of Tourism perhaps rightly, arguing that the Bulgarian ski resorts are meeting all the criteria laid down with regards to sanitary and the general health of safety of people using these resorts. To this argument, one cannot argue. However, when it then says that the resorts will rely on domestic tourists and tourists from neighbouring countries, then that is the time to start to worry.

Skiing is not a cheap pastime and the ski resorts may well not be helping themselves either. The cost of skiing at the three main resorts will roughly be the same as last year but how many families can afford the 50—60 Leva per adult per day just for the ski pass? Plus, the cost of possible equipment hire and then there is the cost of accommodation and the cost of food in what are generally overpriced (by the national standard) restaurants who aim or prefer to service the unknowing foreigner. That’s not to say there aren’t good restaurants in Bansko etc as there are many, but these often remain a well-kept secret for those in the know and do not rely on the foreign tourists.  Anyway, we digress: the domestic tourist is significantly keener on taking a summer holiday than a winter one: the same tourist also has a wide selection of Black Sea options from cheap, to expensive in both accommodation and places to eat; the ski resorts do not necessarily follow the same pattern of thinking. So will the tourists from the neighbouring countries take up the slack? Unlikely is the simple answer. They too will be faced with unknown travel restrictions, pressure not to travel and the new state of normality that has already seen them miss a summer holiday overseas so missing a winter one will not be earth shattering. This is aside of possible financial limitations the new state of being may have also created for potential tourists.

Much is made of the fact that (apparently) some 100,000 Bulgarians travel across Europe for ski holidays each winter season. The hope of the Tourism Ministry seems to be that rather than spending a week in Austria or Italy etc, these people will spend a week in the Bulgarian ski resorts and spend the same amount of cash. It seems that the habits of skiers are not understood. These same people will, almost certainly, ski in Bulgaria: they always do, every year; but this is for the weekend or the odd day every other week and does not generally see them willing to or wanting to spend a week in a ski resort they can drive to in 1 hour or so and where the size of the ski area is miniscule to the ones offered in the likes of Austria and Italy, which is the reason they travel there in the first place. Bansko, Borovets and Pamporovo have top class European standard facilities and pistes, what they don’t have is size to keep the avid skier interested.

Figures can and do paint whatever picture is intended for them and the latest bullet point figures that the numbers for the winter season are 40% down on last year, really needs to be qualified. At this time of year i.e. November, it may be that usually only 10 or 20% of the people that intend to go skiing have actually made firm plans. Thus, another way of looking at the figures might be that so far this year only 6 or 12% of the usual total year on year bookings have been made! If the ski season ends up with only a 40% decrease, then this will be fantastic news for the ski resorts. The reality is that seeing that there are very few flights that will operate this winter from the key source markets e.g. Germany, UK and Spain and that the charter flights will be non-existent, the hole that these absent skiers leave cannot ever be filled, despite the optimism.

Everyone hopes that those involved in the ski sector survive to fight another day. One can be optimistic but it is perhaps currently better to be pragmatic and to think and plan accordingly.

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