What will Trump, tariffs and economic turmoil mean for travel SA?

It is seldom that I feel the need to segue from one article to the next on the same subject, but having written about the impact that the withholding of funds from the USA will have on South Africa and our travel and tourism industries last time, I just cannot ignore the constant bombardment of news about America’s new president and the harsh reality of what his tariffs wars could mean to the global economy as a whole. No doubt, the travel industry will be as much affected by a massive economic downturn as any other. A huge number of Skift (An international travel publication) reports are about Trump and the knock-on effects of his sweeping changes and in the USA. airlines, hotels, Tour Operators and  “even the companies that provide tech to travel companies are seeing early signs of weakening demand in the U.S. and a shift toward domestic travel.’’ 

This is certainly not just about the USA though, and another article I read from ‘Oxford Economics’ summarised the general global economic picture with this observation, ‘’The effects of these tariffs will not be uniform across the globe. Different countries and regions will experience varying levels of impact, with some economies more vulnerable due to their reliance on exports to the US. As nations begin to announce retaliatory measures, the landscape of global trade is poised for upheaval.’’ It does not paint a pretty picture, but if the effects are so different for different regions what will Trump, tariffs and economic turmoil mean for travel SA?

We get knocked down, but we get up again…

At a time when we were beginning to feel that Corporate travel was really on the comeback trail from the pounding we took from the pandemic, there is every possibility that we could now be in for another rocky (excuse the pun) ride. With the tariff war and a plummeting Rand weighing heavily on so many industries, corporate travel, deemed by many businesses to be a luxury, could well be cut. At the very least, the thousands of SA businesses that have been dealing directly with the USA, one of our largest trading partners, will generate both outbound and inbound travel cuts.

Secondly, you currently need to have a crystal ball to predict fluctuating travel prices even from one week to the next. For example, if you booked and paid for a cruise three weeks ago, good for you, because it just got 15% more expensive! This is highly problematic for corporates and their TMCs trying to make plans for future travel. So, how do we try to avoid having to get up again after being knocked flat on our faces – if it happens?  

Plan ahead with flexibility

“Be water, my friend” is a famous quote attributed to the martial artist and actor, Bruce Lee. The quote emphasizes adaptability, flexibility, and the ability to flow like water, rather than being rigid or stagnant. In a time like this, when President Trump is churning out new edicts almost daily, and then just as rapidly and unexpectedly retracting a few, I believe we need to avoid making rash decisions about where we are going and any major changes we may need to make. We can try to plan ahead but still have to remain flexible to change. I would say whatever looks like a good thing and you’re happy with it then book it! Don’t wait around to see if it will get better. On the other hand, don’t just make significant changes to future plans on the assumption that everything is bound to get worse – be water, my friend, work around and over the boulders that lay before us. Having ridden some tsunami-sized waves through COVID-19, we can certainly ride out this storm! Let’s watch and wait – and as we South Africans so love to say – vasbyt!

LIDIA FOLLI
CHIEF EXECUTIVE OFFICER