"We won't see a tourism comeback before 2021"

Assaf Goren / Photo: PR
Assaf Goren / Photo: PR

Assaf Goren, CEO  of Israel tourism company Issta, sees the coronavirus changing customers' behavior patterns.

"Globes" spoke to Assaf Goren, CEO of tourism company Issta Lines (TASE: ISTA), about the impact of the coronavirus pandemic on his company and the tourism industry in general, and his plans for the day after.

Tell us about the current situation in the company and what actions you have taken in the face of the coronavirus crisis.

Goren: "At Issta, we found ourselves dealing within a short time with tens of thousands of requests for changes and cancellations, whether at the customer's initiative or because of flight cancellations by the airlines. All this happened in a short period of time, in which we were already working with limited manpower, with people working from home and having to become accustomed to a new and complicated way of working, which mainly involved following up cancellations with customers and with the airlines.

"There were calls from Israelis who were already overseas, and countless situations that had to be resolved. We built an automatic system to monitor changes by the airlines and notify customers of flight cancellations. This was dealt with in such a way that there was no need to contact us. We introduced an Internet system for rescue flights, and we set up an emergency team to deal with each of these channels."

Goren says that dealing with the airlines over returning money to customers whose flights had been cancelled was not easy. Many of them refused to refund fares and offered a credit against future travel instead. For many customers, however, the situation had changed, and money allocated to a vacation was now needed to live on. "The task is to refund the money by any means that will succeed, including lawsuits," Goren says.

How are you preparing for the day after the crisis ends?

"We have shareholders' equity, we will be capable of getting through the crisis, and we will adapt and change. We will try to identify opportunities and expand our activity. In the past two years we have invested resources in the "Issta 2020" program, and it will adapt itself to change and to the need to expand the technological tools available to travel agents.

"We will have to adapt ourselves to the new reality. There will be more people working from home, fewer people will come to the branches, and work methods will be more advanced. These processes make us more efficient.

"The crisis will speed up processes, and our customers too will be more exposed to technology. Every grandparent now knows how to use Zoom. Issta is has a presence all over the country, with 40 branches. I don't know whether all of them will remain, but we will maintain deployment from Kiryat Shemona to Eilat. There are people who like to physically meet an agent who already knows them and their preferences, and that's a service that can't be provided by a call center.

"We will also see changes in customer behavior patterns. The low-cost airlines taught us to make bookings a year in advance, but that won't happen anymore. There's a crisis of confidence between customers and retailers in every sector. Under the cloud of uncertainty, people will prefer the money to stay with them. In tourism, this will mean last-minute bookings." <pHow long do you think it will take before activity in the sector gets back to what it was before the crisis?

"In the throes of the crisis, it's hard to say when it will end. It depends on the degree to which people feel a sense of personal security, and on the state, as restrictions are slowly lifted. The first to be able to get back to work in the industry will be the hotels, which will be dependent on internal tourism. Tourism will return like a pair of compasses: first internal, after that the Mediterranean basin, then Europe, and then more distant destinations. It could be that instead of tourist visas there will be health visas. Other notions will become important to the consumer, such as standards of cleanliness.

"We estimate that fares will be higher, and airlines that survive will try to recompense themselves until they reach profitability. In internal tourism, the price will perhaps make it possible to bring vacationers back. I assume that we will start to see bookings as we get closer to the Jewish holiday season in the fall, but a return to full activity - I don't believe we'll see that before 2021. It depends on the Ministry of Finance and the government getting the economy moving forward. With high unemployment and a worsening recession, we know that tourism is a luxury."

Published by Globes, Israel business news - en.globes.co.il - on April 13, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Assaf Goren / Photo: PR
Assaf Goren / Photo: PR
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