Travel insurance is not a cure for the many issues facing travel companies, but it might be a useful tool in pushing a hesitant booker over the line, says Steve Endacott
Many customers are worried about booking holidays, in case an outbreak of coronavirus in their holiday destination puts their health at risk or forces them to cancel their holiday. Google is already reporting a 25% drop in holiday searches.
We all know that the current media hype is an overreaction to a disease that has a death rate no higher than the average flu, but unlike the flu we currently have no natural immunity or treatment for it. Unless you are old, have pre-existing medical conditions or underlying health issues, coronavirus is unlikely to kill you, but will make you ill and bed bound for a short period of time. Obviously, not something you want to happen on holiday.
The problem with the current media coverage for the travel industry, is it’s highlighting the quarantine risk, of being caught on a “plagued ship” or a “plagued hotel” for two weeks, ruining your holiday experience. In real terms, this risk is infinitesimal, however it’s the one being placed forefront in most travellers’ minds and in my opinion, doing the most damage to demand.
The other major perceived risk is that travelling via airports is high risk, because of the mingling of people from multiple destinations, increasing the risk of spreading the virus. I have to confess to walking slightly faster past people with an Italian accent at Heathrow recently.
Some people also believe that close proximity and recycled air on aircraft make them havens for the disease, even though little documented evidence of this exists.
While we don’t have outbreaks of coronavirus in the UK, the fear of travelling to a destination like Tenerife, where just one hotel is affected, is obviously intensified and bookings have dropped like a stone.
Like most people, when I’m ill, I’d rather be at home with access to my local doctor or NHS hospital if anything escalates. Therefore, I’m likely to avoid booking a holiday to a destination with coronavirus as I’d rather suffer at home than overseas.
So it’s easy to see why holiday searches have dropped by 25% and unfortunately how things could get worse.
However, what happens when, inevitably, it does reach the UK and you are just as likely to get infected at home as abroad? The answer I’m hoping is that the dam will break and a lot of people take the ‘it’s only the flu’ approach and continue to travel on holiday.
Travel insurance is not a cure for any of the issues above, but can be a useful tool in pushing a hesitant booker over the line.
Holiday insurance companies are still offering cover to destinations currently unaffected by coronavirus and would allow you to cancel and get your money back, provided the Foreign and Commonwealth Office does not advise against travel.
So today customers who have already booked holidays to Tenerife, are able to take out insurance. Put more bluntly, customers would be mad not to immediately make the most of this opportunity, as it’s one of the few times customers can still get insurance for a known issue, before it escalates.
I’m sure insurers will quickly tighten restrictions for destinations where the virus has been found and may even push up premiums, so I’d advise people with existing holiday bookings to act fast, while reading the small print of their insurance policy to ensure they will be covered.
Given a 25% drop in searches, it will not be long before tour operators and airlines are forced to drop prices to stimulate demand. Very soon we will be seeing some real holiday bargains being presented to customers.
If these are combined with the sale of a travel insurance policy that guarantees customers their money back in the case of the FCO advising not to travel to a destination, or in the unfortunate case a customer does get ill on holiday, then I personally might be persuaded to continue with my plans and book my usual summer holiday.
Travel insurance is never going to drive demand, but it may help with conversion!