It’s safe to say that of all the industries affected by the COVID-19 pandemic, the airline and travel industries – and those related – have probably been hit the hardest. With planes grounded, travel cancelled, and borders shut across the globe, there have been limited opportunities for organisations to survive, let alone thrive.
To put this into perspective, air travel fell from 6,804,900 people a month in the UK in February 2020 to 112,300 in April of the same year. That’s a 98.3% drop in just two months.
Airlines in particular have lost millions – even billions – to the financial strain of the COVID-19 pandemic. Some have even resorted to ripping passenger seats out of aircrafts to operate as cargo planes in an attempt to offset the loss in passenger revenue.
These organisations are spending millions with the likes of Oracle and SAP. And you would think that, as such important customers, the ERP vendors would cut them a little slack, considering that both Oracle and SAP yield an approximate profit margin of 90% on this element of their business model.
It comes as no surprise to us (having worked with the vendors for over 20 years) and probably not to you, their customer, either, that this has not been the case.
Fortunately, there is a way for global airlines and other industries affected by the travel shutdown to make millions in savings.
And, we’re already supporting a whole host of organisations in the travel, transport, and tourism industries – including Gatwick Airport, Arriva, Avoris, Auto Teile Unger (ATU), Tifco Hotel Group, and more to do just that.
But, before we reveal how we’ve helped these organisations make substantial cost savings, avoid unnecessary upgrades, and all while remaining compliant, let us first delve a little deeper into the ripple effect of the pandemic.
With air traffic ceasing to exist, airports have hardly been bustling with passengers. Of course, they were still in use and subjected to all the general running costs like electricity and (albeit reduced) staffing, but only for a very small percentage of travellers that were exempt from travel restrictions.
Consider, then, all the restaurants and shops within the airport itself. A severe lack of passengers, in addition to lockdown restrictions, have meant little to no activity and a crippling fall in revenue.
Outside the confines of the emptied airports, the private organisations managing the vast amount of airport car parks in the UK will have taken a hit too, as they experienced an unprecedented number of vacant parking spaces.
There are so many organisations involved in general airport operations that the extent to which lockdown has affected this part of the travel industry is immeasurable.
Accommodation and travel agencies
Air travel was not the only industry to come to a complete standstill overnight. From March 2020, even holidays at home (“staycations”) were cancelled. During the first national lockdown, accommodation and travel agencies saw turnover fall to 9.3% of their February levels in May 2020.
The hotel and accommodation of Greater London saw the greatest fall of room occupancy in the UK, with only 20% of rooms occupied in July 2020. To put that into perspective, the occupancy of rooms in Greater London in July 2019 was 90%.
But, as was the case for airports, many of those in the hospitality and travel markets would have kept the lights on and the reception desk manned despite the sharp drop in travellers and bookings.
With similar preventative measures, restrictions, and border closures in place around the world, we can assume that a similar trend (a significant drop off in turnover, that is) followed all major tourist destinations across the globe.
While it may not be the first association you make, a huge part of travel and tourism is surprisingly manufacturing; another industry that came to a grinding halt with the introduction of social distancing measures.
For manufacturers that specialise in the components and assembly of public transport vehicles, operations were further impacted by demand. Planes, trains, and other modes of transportation do not need parts, or such frequent maintenance, when they’re not in use.
Manufacturing is just another example of the domino effect that the pandemic has created. One industry (travel and tourism) is drastically affected by a decision made by governments globally, and this has resulted in shockwaves ricocheting throughout a web of linked industries.
So, we’ve outlined some of the primary industries around travel and tourism that have been impacted by the pandemic, now let’s analyse some of the key problems that the CIOs of these organisations are facing in the aftermath. (Don’t worry, we will also provide solutions!)
Keeping ahead of the curve
Understandably, it seems airlines, airports, and the aforementioned collateral industries are focusing all of their spending on mission critical operations. The primary focus is to survive.
But what happens when the effects of the pandemic begin to wane? When the world is fully open again and travel (hopefully) booms, who will survive then?
Unfortunately, organisations that are solely focused on survival in the coming months are probably not going to recover in the coming years. While navigating the challenges of the pandemic thus far is something to celebrate, the pre-COVID economy and markets will still exist.
Competition, security, market demand, recruitment, and all of the other hurdles that organisations usually face won’t have disappeared. In fact, many organisations will likely find these factors come back with a vengeance as everyone seeks to find their footing in the post-pandemic world.
Some travel organisations will be considering the feasibility of pursuing key initiatives and growth plans that were placed on hold as a result of the necessary shift in focus. For airlines, this could mean moving Oracle and SAP systems to the Cloud, investing in in-flight software to improve the customer’s experience, or developing systems that will help to make flying as sustainable and efficient as possible.
Juggling the mission of current survival with future survival is tough, but there is a way of freeing up a huge part of your IT budget which can be redirected to innovative projects and development.
Avoiding unnecessary upgrades
Vendors like Oracle and SAP will (effectively) force customers to upgrade their software to the latest version by de-supporting older versions. By reducing support and increasing the cost simultaneously, or by removing support entirely, organisations are left with little choice but to complete an unnecessary upgrade.
It seems to be that, either way, you’re stuck between a rock and a hard place; don’t upgrade and lose support, or do upgrade and lose money, time, and resources to a nonessential venture. Whichever option you choose, you’re spending vital IT budget just to keep your systems operating efficiently and effectively.
But, when we consider the obstacles (both financial and otherwise) the travel industry has faced since the spring of 2020, it’s safe to assume that any thoughts of upgrading functional software may well have been placed on the backburner.
If you’re looking to prioritise investing in other areas of your organisation, there is a way to avoid upgrades and steep increases in support costs (hint: it doesn’t involve sticking with vendor support).
As we’ve mentioned, some organisations have been hit harder than others.
If, like most in the travel industry, you’ve been losing almost 90% of your usual revenue, you’ve had to furlough or let go of staff, and you’re doing everything you can to keep going, IT development is probably not going to be at the top of your list, let alone an upgrade.
If this is the situation that you’re in, you need to find way a quick and effective cost saving. But, not just for the short term.
This is where our solution will really help your organisation.
Getting you flying again
All airlines and other travel-related organisations will relate to at least one of the problems we’ve listed above. The industry has lost billions.
Meanwhile, Oracle and SAP have reported a period of growth over the pandemic. Considering little innovation has been released from the mega-vendors over the past year, this comes as a bit of a surprise. Well, that is until you consider their extortionate (and rising) support fees.
After 20 years of working with the vendors, we realised that we could provide an exceptional support service (far better than either vendor is willing to) while helping organisations to make considerable savings.
At Support Revolution, we can offer organisations at least 50% off for their current support bills for a fully compliant third-party support service.
If you’re still looking to invest in state-of-the-art technologies to safeguard the future of your organisation, cutting a multi-million support contract in half will go a long way in funding that innovation.
Recover from the pandemic, follow your own IT roadmap, and safeguard your future, as the world opens up again, with us supporting you.
So, why not join other organisations in your industry, such as Gatwick Airport, Arriva, Avoris, and Auto Teile Unger (ATU), and make big savings on your largest IT bill?
With our savings calculator, you can find out how much we could save you on your annual support bills, so you can get off to a flying start as we navigate this post-pandemic world.