The Founder&CEO of Metglobal, Metin Altun, answered questions about the sector and Metglobal on live at Uzakrota Youtube Channel. You can see the full video in Turkish and the speech text in English below.
What are the effects of coronavirus on the tourism industry?
As you know, the COVID-19 outbreak started in China in early January and was reflected in the media. Then it spread to the Far East, all of Europe and America. The World Health Organization announced in early March that this epidemic was, in fact, a pandemic. After that, the tourism industry started to get a deep wound and was driven into chaos.
When we consider the tourism sector with all its branches, we are talking about a sector of 5.3 trillion. It covers more than 15% of the transaction volume in the world. Looking at the forecast, it is estimated that half of this trading volume will not happen this year. Currently, 70 million of 350 million employees have lost their jobs. And in March, only 25% of the world’s accommodation was completed. When we examine tourism in Turkey, we see that 70% of tourism revenue which is 35 billion dollars would disappear.
When we look at Booking.com, Expedia, the biggest players in the sector, we see that their market values have fallen sharply with the crisis. These companies are borrowing more now, and they also say that layoffs will continue.
Considering that the flights stop between April and July, unfortunately, the international tourism sector has stopped. Looking at these datas in March, we are facing the greatest depression since World War II.
What measures have you taken against the crisis as Metglobal?
As Metglobal, we were established in 1998 and started to provide online services in 2002. Our first focus was abroad. In the domestic market, we have been serving with the tatil.com brand since 2005. We have nearly 650 employees in 40 different countries. We obtain 85% of our income from abroad. Metglobal also has a payment systems company called Paytrek that is licensed in the UK and Turkey.
The first effect of the crisis was the inability to receive collections. Afterward, reservations stopped in March, and then cancellation requests started. As of March 16, the first decision we made was to start working from home. Secondly, we temporarily stopped the overseas offices, which had high costs. For different reasons, we have just closed our Cairo office.
In Turkey, we did not lay off anyone who worked with us for more than 6 months. We offered free-leave to some of our employees and some of these employees did not accept this leave for rightful reasons. We separated our ways with a total of 15 employees.
We applied for the allowance offered by our state for all of our employees. Our expectation is that our President will extend this period for at least another 3 months for the tourism sector.
Apart from that, we have paid almost all the 60 million TL payments to the hotels under the Tatil.com brand. But unfortunately, we could not get our collections and our return from private banks and hotels in Turkey. When we look at our financial values as a group, we are a debt-free company for now.
What do you think about the future of tourism technology brands?
I think tourism technology brands are more fortunate. Because we are on the engineering side of this business. We are making investments to be available and to increase transaction volume. I think that the capital side will be easier to enter the technology side of the tourism sector and the technology side will come out of this crisis faster.
What are your predictions about the start time of the 2020 tourism season?
This crisis has different dimensions which are health, security, psychological, socioeconomic and political. So since the situation is a bit complicated, it will take time to return. We estimate that domestic travels will start at first. As time goes on, nearby area travels and business trips will begin. Even if the vaccine is found, it may take 2022 to overcome this crisis completely.
Our hope is, at best, to have the vaccine until 2021 and spend 2021 a little more comfortably.
Our strategy and plan for this year; Fulfilling all our commitments to our customers, suppliers, and employees, bypassing 2020, and putting everything back on track in 2021.
What changes will there be in customer habits in tourism?
Of course, we foresee that some habits of consumers will change. Nowadays there is a shift to online in all sectors. While tourism is shrinking by 80%, we see that global retail companies continue to grow by 10-15%.
Secondly, in terms of consumer confidence, there may be a shift to buying directly from the hotel. According to researchers, there may be interest in boutique hotels with fewer employees, but it is also predicted that there may be a trend towards 5-star hotels in terms of quality and hygiene certificates.
Those who change fast enough in this period, those working for the future, those who invest in technology may encounter new opportunities after the process. Are you working on this?
As Metglobal, we have been making very serious investments in technology in the last 5 years. Our vision is to produce and use tourism technologies and at the same time to bring them to our business partners. We have an R&D team with over 300 employees at Yıldız Technical University Technopark. We develop many products that will contribute to the industry.
When we look back, we were changing parts when the plane was in the air, but with this crisis, the plane is now on the ground. In other words, the crisis provides us with the opportunity to make bolder decisions and restructure the company. Even if we work from home, we are currently developing new products with our team and we plan to make them available to players in the industry.
As Metglobal, what are your exit plans after the crisis?
The first question we asked as a company was how can we structure the company until 2021 without further debt. The decisions we make and the improvements we make are also in this direction. From July onwards, if we achieve a 25-30% turnover, we want to deliver the financial budget of 2019 in 2021 again. As I mentioned, we are a technology company. We have the agility to make faster decisions and turn our decisions into income models. We hope to turn this crisis into an opportunity in the near future with these decisions.
Finally, do you have a message for the industry?
All human beings are going through a tough test right now. We are in the sector that is most affected by this crisis. In order to construct the 22-year-old Metglobal, we are pulling down some of its bricks with our own hands. Despite everything, we have to look to the future with hope. We have to motivate ourselves and focus on our business. Even if we are in the dark now, we will see the light.
I wish everyone good health and thank you to Uzakrota for this opportunity.