Since early 2020, the COVID-19 pandemic and efforts to contain it have severely restricted the level of economic activity around the world and have had an unprecedented effect on the global travel industry. Containment measures have included, and in some cases continue to include, travel restrictions, bans and advisories, social distancing measures, curfews, quarantine restrictions after travel in certain locations, border closures “shelter-in-place” orders, required closures of non-essential businesses, vaccination mandates or requirements for businesses to confirm employees’ vaccination status, and other restrictions.
The pandemic had, and may continue to have, a number of material adverse impacts on our business, financial performance and liquidity position. For example, in 2020, we experienced significantly reduced levels of new bookings, significantly heightened levels of cancellations, and instigated traveler-centric modifications to our cancellation policies. As a result, we experienced a significant increase in refunds, which led to materially negative cash flow that negatively impacted our cash balance and overall liquidity position. The pandemic also had a significant adverse effect on many of the partners on which our business relies, including accommodation providers and airlines, as well as on the traveling public generally and our employees.
In addition, the pandemic impeded global economic activity for an extended period and could continue to do so, leading to a continuation of the already significant decrease in per capita income and disposable income, increased and sustained unemployment or a decline in consumer confidence, all of which would significantly reduce discretionary spending on travel.
In turn, that could have a negative impact on demand for our services and could lead our partners, or us, to reduce prices or offer incentives to attract travelers. We also cannot predict the long-term effects of the COVID-19 pandemic on our partners and their business and operations or the ways that the pandemic may fundamentally alter the travel industry or consumer habits. In particular, we may need to adapt to a travel industry with fewer and different suppliers as well as structural changes to certain types of travel.
Our mitigation efforts in response to the impacts of COVID-19 on our businesses have had, or may continue to have, negative impact. For example, in response to the spread of COVID-19 in early 2020, we incurred significant additional indebtedness and took other actions, including the ultimate adoption of a hybrid work policy, that could lead to disruptions in our business, reduced employee morale and productivity, increased attrition, and problems retaining existing and recruiting future employees, all of which could have a material adverse impact on our business, financial condition, results of operations and cash flows.
The ultimate extent of the impact of the pandemic, including as a result of possible subsequent outbreaks of COVID-19 or of new variants thereof and measures taken in response thereto, will depend on future developments, which remain highly uncertain and cannot currently be predicted. Additional impacts and risks that we are not currently aware of may arise. It is therefore difficult to estimate with accuracy the impact to our future revenues, results of operations, cash flows, liquidity or financial condition, but such impacts have been, and may continue to be, significant and could continue to have a material adverse effect on our business, financial condition, results of operations, cash flows and liquidity position for the foreseeable future.