It didn’t take long for Omicron to transcend its status as a minor letter of the Greek alphabet. It is, of course, the term given to the most recent strain of COVID-19, which is thought to spread far faster than earlier variations and has already prompted UK governments to impose additional limits on mask use and foreign travel.
Omicron has already impacted public trust, with some companies canceling Christmas party plans and many individuals no longer feeling safe going out and socializing. This poses immediate issues for travel, tourism, and hospitality businesses, and the long-term consequences are difficult to forecast since we still don’t know much about Omicron. Let’s take a deeper look at Omicron’s current influence and attempt to predict its long-term impact.
The effect of Omicron on the travel and tourist industry: A red list and additional testing are impacting reservations.
Things were finally looking good for the UK’s struggling travel and tourism industry a few weeks ago. All foreign nations had been removed from the red list that needed strict quarantine, and transatlantic travel had been allowed. Vaccination levels continued to improve, and people were finally going on vacation again. The spread of Omicron, on the other hand, altered everything.
There were two major limitations announced:
The red list was revived, and 11 African nations were added to it (with Nigeria, South Africa, Namibia, and Zimbabwe arguably the most notable inclusions)
Travelers visiting the UK were once again needed to have a negative PCR or lateral flow test two days before departure, as well as to self-isolate until they tested negative on a private PCR test two days after arriving in the UK.
While the initial step had some effect, adding additional testing had a significantly greater impact. As a consequence, vacations became more expensive right once, and some reservations were canceled.
All of this has prompted ABTA (the Association of British Tour Operators) to demand further government assistance to prevent travel firms from collapsing. Without assistance, Abta said, these new limitations might “push enterprises over the edge,” citing its own statistics showing that employment in the tourism sector has halved since the outbreak began, and that summer and fall reservations this year were just 28% of 2019 levels.
Any large drop in passenger numbers over the traditionally profitable Christmas season might be a blow that some travel and tourism SMEs would be unable to recover from.
The effect of Omicron on hospitality: canceled parties and a loss of public trust
Apart from the modifications to travel laws, the government also reintroduced obligatory mask-wearing on public transportation and in stores in reaction to the spread of Omicron.
While this policy had little direct influence on the hotel industry in the UK, it did send a strong message to the public that Omicron was something to be concerned about. As a consequence, several people and businesses have reduced their socializing. For many, this meant no Christmas party at work. More than half of companies have postponed the annual festive get-together, according to a poll of 2,000 office employees conducted by COVID-19 testing company Prenetics.
It’s unclear if this implies individuals will instead meet together in smaller groups. Some individuals will undoubtedly go forward with their plans, while others will exercise prudence and cancel them. Meanwhile, Prime Minister Boris Johnson and Health Secretary Sajid Javid have urged people to go about their business as usual, while other powerful advisers and government employees have taken a more cautious stance.
This muddled message hasn’t benefited firms or people, with neither group having much faith in the “correct” course of action. According to industry organization UKHospitality, holiday reservations were down 12.4 percent on average, and over a quarter (22 percent) of respondents claimed festive bookings were more than 30 percent below expectations even before Omicron.
Overall, most hospitality firms are expected to take a blow as a result of Omicron, although the severity of the damage may vary depending on the kind of business and customer demographics.
Omicron’s broader impact: Could it slow or halt the UK’s economic recovery?
Consumer behavior is already being influenced by the danger of Omicron, according to some studies. Retail experts’ analysis Footfall in Central London office districts decreased by 2% in the week leading up to December 6, according to Springboard, while footfall in significant towns outside the capital fell by 3.8 percent. This might be an indication that Omicron is preventing certain individuals from entering congested places or offices.
The Confederation of British Industry (CBI) has lowered its economic growth estimates owing to increasing company expenses, supply chain problems, and workforce shortages. It also cautioned that the development of the Omicron model might decrease the company’s growth estimate even more. “We predict a fairly solid economic rebound ahead,” Rain Newton-Smith, CBI Chief Economist, stated, “however obviously, the emergence of Omicron provides additional negative risk to our projection.”
As a result, another lockdown might constitute a true danger to the economy. The government’s Plan B COVID-19 plan, which will be adopted when more severe restrictions are needed to stem the spread of COVID-19, sounds eerily similar, with forced mask-wearing, COVID certification, and work-from-home instructions.
However, past history shows that the government would need some very persuasive proof in terms of the number of fatalities or major illnesses before taking such a measure. Outside of England, Scotland, Wales, and Northern Ireland have issued government recommendations encouraging individuals to work from home.
Omicron is unlikely to have a significant influence on the UK economy until substantially stricter restrictions are imposed in England.
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