Vaccine Passport Is the New Golden Ticket as the World Reopens

Written by bloomberg.com on March 29, 2021. Posted in Current News

Illustration: Joel Plosz for Bloomberg Businessweek

Companies and countries that depend on travel or large gatherings are counting on a totally unproven concept.

In a harbor on the Greek island of Paxos, Panagiotis Mastoras checks over his fleet of pleasure craft and counts down the days to the return of the tourists who fuel the economy of the 8-mile speck in the Ionian Sea.

Panagiotis Mastoras. Image: Loulou d’Aki for Bloomberg Businessweek

For the rental-boat skipper, the easing of travel curbs imposed as the Covid-19 outbreak swept the world appears tantalizingly close. Greece said it would welcome back visitors starting on May 14, as long as they’ve had a vaccination, recovered from the novel coronavirus, or tested negative before flying out. “It’s the safest way,” says Mastoras, one of 850,000 people working in a holiday sector that accounted for almost a quarter of Greece’s gross domestic product before the pandemic, the highest proportion in Europe. “We’ve reached a point where it can’t go on like this.”

Greece is at the forefront of a bid to revive travel with the help of so-called vaccine passports—certificates or digital cards testifying to the apparent low-risk status of their holders—which is gaining traction in tourist-reliant economies from the Caribbean to Thailand.

Businesses that have suffered a yearlong battering from the pandemic are also coming to view the passes as a route to salvation. The International Air Transport Association, which represents 290 carriers worldwide, estimates the industry could lose $95 billion in cash in 2021 after already suffering the worst year on record. So airlines have supported a number of tech solutions to verify passengers’ Covid vaccination or testing results, such as the IATA Travel Pass app, the AOKpass from French travel-security company International SOS, and the CommonPass, which is being developed by a Swiss nonprofit and the World Economic Forum.

A lack of standards could hinder such efforts. “There has been a lot of advocacy, but the execution has been sorely lacking” says Jeffrey Goh, who heads the Star Alliance of 26 carriers including Air China, Deutsche Lufthansa, Singapore Airlines, and United Airlines Holdings. A single set of standards for vaccine passes needs to be agreed to at the Group of Seven or Group of 20 level, Goh says, because vaccine passports represent “a policy choice for rekindling the economy.”

Singapore Airlines has begun a trial of IATA’s app, as has Qatar Airways. TUI AG, the world’s biggest tour operator, says vaccine passports will be key to resuscitating its business. And Carnival Corp.’s U.K.-based P&O Cruises has stipulated that no one can board its ships this summer without proof of vaccination.

In the U.S., American Airlines Group Inc. has signed on with the VeriFly app being rolled out by biometric software company Daon. United has developed its own in-house platform, Travel Ready, which will allow passengers bound for certain destinations to upload vaccination records starting in early April.

Once established in the travel sector, such passes could hold the key to the reopening of wider society, advocates say, allowing business meetings and conventions as well as gatherings at sports events and concerts. Hyatt Hotels Corp. on March 9 announced it was exploring the use of VeriFly to help guests attend meetings at its properties. Ultimately some gyms, bars, restaurants, and even shops could also rely on the new vaccination documents to help patrons gain easier access.

Yet the case for handing the newly inoculated pass holders their old life back is far from universally accepted. None of the available shots is 100% effective, meaning travelers with vaccine passports could in theory continue to spread the virus in crowded resorts. Moreover, some vaccines, such as Russia’s Sputnik V, have not been cleared in many other parts of the world, raising the possibility that administrators of the Covid passports may have to make thorny medical determinations on which vaccines are effective enough to allow safe passage—even though health professionals haven’t settled that debate.

More fundamental are questions surrounding the fairness of vaccine passports, which would inevitably favor the inhabitants of richer nations over poorer ones where the distribution of shots has barely begun. And vaccine passports would initially open up travel to a cohort of the elderly and middle-aged that have been prioritized for inoculation, leaving younger people in effective travel curfew while their parents and grandparents jet off to warmer climes. President Joe Biden is facing pressure from travel interests including Airlines for America, the industry lobby, to introduce federal standards for vaccine passports.

He signed an executive order in January requiring an assessment of how they might be used, but he’s yet to act on the request to establish guidelines amid concerns over privacy issues and the impact on disadvantaged groups. The Virginia-based Global Business Travel Association, which says its members manage more than $345 billion of spending annually, said in February that the White House should resist any moves that might “further cripple” the industry by restricting domestic air travel with a required negative Covid test.

Although Americans have a handful of foreign-travel options, including to parts of the Caribbean and Mexico, which requires neither a Covid test nor proof of vaccination, the reality is that they will “all be going to Florida” this year because most other top destinations have restrictions, says John Grant, chief analyst at flight-bookings specialist OAG.

Rifts over the role of vaccine passes in helping the world recover from the coronavirus crisis have been especially apparent within the European Union. Nations in the sunnier south are desperate to revive tourism just as others farther north fret over the consequences of permitting travel, in a continent where the virus has hit hard and vaccine distribution remains painfully slow in large parts.

The Greek island of Paxos, devoid of tourists. Photographer: Loulou d’Aki for Bloomberg Businessweek

On March 17 the EU gave the go-ahead to its own passport, a “Digital Green Certificate,” but some key questions persist, including when the passport will be available (an internal memo has suggested in three months) and how long the full reopening of borders will take under a proposed tiered phase-in.

Those hurdles suggest countries such as Cyprus, Greece, and Spain may need to go ahead with plans to admit tourists via bilateral pacts if they’re to make the most of the summer season. The U.K. aims to permit international leisure trips starting as early as May 17, and many travel-dependent nations are desperate to snag British vacationers once restrictions are lifted. Britain, along with Germany, is the biggest source of visitors to the Mediterranean.

Visitor numbers to Spain were down 90% in January from a year earlier, underscoring the continuing woes of a tourism sector that’s typically 10% of the economy. In Spain’s Canary Islands, which sit off the coast of Africa and normally have a year-round tourist season, hotel manager Jorge Marichal is counting on a May reopening of his lodgings on Tenerife, a perennial favorite with Brits, after more than a year. “We’re pinning our hopes on the vaccines and the Covid pass,” says Marichal, who also chairs the Spanish Confederation of Hotels and Tourist Lodgings.

At PortAventura World, a theme park and resort complex near Barcelona with 2,200 rooms, managing director David Garcia says he expects vaccine passports to unleash pent-up demand from international markets in the third quarter. But Michael Blandy, chairman of Blandy Group in Madeira, Portugal, which has stakes in 15 hotels, is less upbeat, even though the holiday island and cruise ship destination is already accepting visitors who can produce the appropriate health documentation.

Blandy says that with inoculation programs moving at different speeds, vaccine passports may help only much later in the year when all of Europe is protected.

Some nations are showing more caution about the use of proof of inoculation as a basis for reopening to tourists. Thailand, whose palm-fringed beaches and temples have made it the biggest destination for international tourists in Southeast Asia, plans to shorten the mandatory isolation for vaccinated foreigners by half, to seven days, beginning in April.

Non-vaccinated travelers will have to quarantine three days longer. The country, dependent on tourism for a fifth of its GDP, won’t scrap quarantines completely until October and the start of the high season, Deputy Premier Anutin Charnvirakul said in March.

Bill Barnett, founder of hospitality consultants C9 Hotelworks Co., on the holiday island of Phuket, says that there’s widespread concern about the risk of letting outsiders back into the country and that vaccine passports by themselves won’t change that. “It’s a case of needing to win over hearts and minds,” he says. “There’s still a fear factor out there.” That fear led to pushback against early moves to reopen Phuket, Barnett says, triggering a drive to vaccinate the local population to achieve herd immunity.

Economies where tourism is a more marginal activity have narrower ambitions. Australia plans to grant access to vaccinated travelers from New Zealand and Singapore, despite being effectively closed to visitors for a year and having barely 150 active Covid cases. Foreign tourists may be able to visit Bali again as soon as June, if they come from countries with successful vaccination programs, Indonesian Tourism Minister Sandiaga Uno said on March 18, though as many as 2 million Bali residents will need to be vaccinated first.

The pace of the return of visitors from China will be a huge factor for Asian tourism. Totaling 155 million outbound tourists in 2019, Chinese are among the biggest foreign visitors to Japan, Thailand, and Vietnam, as well as key customers of luxury retailers in cities as far afield as Paris and Rome. International visitors who want to enter China could face some vaccine nationalism: China in March said it would ease entry requirements for foreigners who’ve been inoculated with a Covid vaccine produced in China. No such vaccines have yet been authorized by U.S. health officials.

The reaction to Britain’s announcement of a road map for resuming travel starting in mid-May suggests there’s certainly burgeoning demand, with TUI reporting a sixfold jump in reservations to Greece, Spain, and Turkey overnight on the news and U.K. discount airline EasyJet Plc saying ticket sales have quadrupled.

On Paxos, Mastoras is preparing more than 30 craft for the coming season. Bookings have surged in the past month, he says, mostly from Britons who’ve already had the shot. Vaccine certificates might even help erode some of the wariness he saw among customers during a brief reopening in July and August. “Families and groups of friends had the opportunity to be together, and it was good,” he says. “But our boat trips didn’t work out at all. Strangers didn’t feel comfortable mingling.”

See more here: bloomberg.com

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