by Lombard Odier

When summer destinations meet social isolation

The coronavirus pandemic prompted a huge drop in carbon emissions. As the travel industry begins to rebuild and the summer holiday season hits its peak, how do we ensure a green recovery?

The long-awaited summer holiday season is here. This year, however, as the travel industry cautiously reopens after temporarily grinding to a halt due to the coronavirus outbreak, it’s not going to look quite the same as usual. While this time last year holidaymakers were gearing up for sunny beach vacations, long haul flights to overseas destinations and city breaks, today movement restrictions and the risks associated with travel during a pandemic have put a stop to this. The new travel normal looks very different in 2020. 

According to the International Energy Agency (IEA), by the end of March the global average road transport activity had fallen to almost 50 percent of 2019 levels as entire nations stayed at home to avoid the risk of infection. Flights dropped by more than 90 percent in Europe. The result was a reduction in carbon emissions the like of which has never been seen before. While tourism and mobility suffered, the environment benefitted. 

As restrictions begin to ease, there is huge potential to harness changing consumer sentiment in order to rebuild the travel and mobility industry in a significantly greener and more sustainable way.

For cash-strapped holidaymakers the reduced costs of using green mobility solutions offer a way to keep that much anticipated summer break tradition

Gone are the far-flung exotic vacation trips, for now at least. Instead, those in search of their summer holiday fix are looking closer to home. After all, this all comes at a time of great economic uncertainty, and for cash-strapped holidaymakers the reduced costs of using green mobility solutions that do not incur high fuel costs offer a way to keep that much anticipated summer break tradition. According to research by energy giant EDF, electric vehicles stand to strengthen domestic tourism as a third of British customers say the cost of petrol is a major barrier to exploring more of the UK, while over a fifth of them stated they would drive more if they owned an electric vehicle.

This growing focus on alternative mobility solutions such as electric vehicles (EVs) and micro vehicles also offers attractive incentives for investors. According to Jato Dynamics, battery EVs, plug-in hybrids and other hybrid cars represented 17 percent of sales across all European markets in April, compared to seven percent in the same period last year. This shift is strengthened by EU recovery plans and stimulus packages which incentivise and support the EV sales market.

The change in the way we spend our leisure time and indeed in the way we work has been radical in the last few months. It has not only kick-started a period of real change in travel and mobility, but it has also put into sharp relief the need for systemic change if we are to avoid catastrophic environmental damage. 

Consumers are driving the transformation, with 40 percent of business travellers saying they are likely to reduce the number of flights they take after the pandemic, according to a recent survey by Barclays. The explosion of online meeting services such as Zoom means a large proportion of these will be replaced with telephone meetings or newly-popular virtual conferencing systems. However, given business travel only accounts for 12 percent of all airline passengers, the change in domestic and leisure tourism is especially significant.

Fuel efficiency is top of the agenda for many airlines looking to cut long-haul costs, and the move towards biofuels has begun

The economic impact of coronavirus has hit the airline industry hard, with governments across the globe handing bailouts to stricken carriers. To recover, there is little doubt these companies must look to innovation, and for many this means improving green credentials. France, for example, announced that its €7 billion bailout of Air France came with environmental conditions. These included reducing CO2 emissions from flights within mainland France by 50 percent, and replacing at least two percent of fuel with alternative jet fuel by 2025. Fuel efficiency is top of the agenda for many airlines looking to cut long-haul costs, and the move towards biofuels has begun.

Even before coronavirus hit there was increasing pressure on airlines by consumers concerned about their carbon footprint. This, along with government-led regulation, will continue to drive the shift towards decarbonisation. Sustainability has been a huge growing trend for consumers, and, increasingly, travellers are motivated by their carrier’s policies. 

Social and environmental values are today as much a driver for travellers in their holiday choices as cost. The ecotourism industry which focuses on responsible travel has skyrocketed, driven largely by the growing wealth of millennials who are increasingly choosing to spend their money on travel companies that prioritise sustainability and have a healthy green track record. This is reflected in the pressure shareholders are putting on businesses to be more transparent in their sustainability reporting, a rise in offsetting and carbon credit platforms, and the emergence of green tickets, where travellers have the option to choose routes and methods that reduce their carbon footprint. 

The coronavirus crisis has kick-started a healthy reduction in emissions on the road to net zero

The drop in carbon emissions during the coronavirus outbreak has been startling, with a 17 percent daily decrease in early April 2020 compared with the average of the previous year. According to a report by Nature Climate Change, around 50 percent of this was thanks to changes in surface transport. While this is undoubtedly a good start, the levels of CO2 in our atmosphere will not steady out until net-zero is achieved, and to reach the Paris Agreement’s 1.5℃ target, total greenhouse gases must fall 7.6 percent every year by 2030. Meeting this goal is unrealistic unless the travel industry is prepared to make this unprecedented drop in emissions a permanent reality.

The public eye has largely been trained on the aviation sector, which has seen a 65 percent decrease in the demand for jet fuel. However, it is important to remember that air travel only represents three percent of global transport emissions, and if carbon output is to be reduced to the point where the climate emergency is mitigated, focus must be across all transport. Road transport is by far the biggest culprit, but we must also look harder to abate emissions produced by forms of transport such as shipping and rail travel. 

The coronavirus crisis has kick-started a healthy reduction in emissions on the road to net zero, and the spotlight will inevitably be on the travel industry and the future role it will play. Following an anxious period of economic and social upheaval, we are eagerly awaiting the return of the traditional summer holiday more than ever. However, as longed-for breaks begin to be booked again, green recovery must be systemic and permanent if the much-prized travel market is to be rebuilt sustainably and responsibly. 

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