Meditations on the Coronavirus and the Tourism Industry
What will be the impact of the coronavirus on tourism and travel? How will the tourism industry respond? Definitive answers don’t exist. Instead, we offer some ideas for destinations, travel companies and travelers to operate from a position of strength, choosing deliberate response over reaction and staying the course towards greater sustainability so we emerge stronger.
The other day a client asked, “I have a big question for you. Would travelers come to [our destination] even if coronavirus stays unsolved? What is your opinion?”
We’d achieved some excellent results with him, his business and the destination over the last couple of years. Implementation of tourism product development and marketing strategies had reaped benefits — not only in the growth of his organization, but also to local communities in the form of jobs, income and socio-economic opportunity. Demand for new products and tours had really begun to deepen year over year, with the upcoming summer season looking very promising just a month ago.
Now all that may change. We empathize with his concern.
As we considered our response to his question we watched the prudent yet last-minute cancellation of ITB Berlin 2020, the largest travel trade show in the world. Conversations with colleagues also intersected our thinking. The tourism industry looks very different if the extent of your dilemma is whether or not to cancel your next trip compared to if you depend on the health of the sector to put food on the family table.
A mindset to think on these things in a reasoned manner slowly revealed itself.
Shocks like the coronavirus (COVID-19) present challenges, considerations and opportunities to reflect on the way we operate — as a society and as the travel industry.
Here are a few considerations for destinations, companies, communities, donors, tourism industry colleagues, and travelers alike.
But before we dive into the detail, we take a step back for perspective.
Resilience: A Holistic Look at Travel
Resilience has become a popular term these days, especially in travel industry circles. The coronavirus offers a real-life resilience-testing laboratory. The definition of resilience suggest toughness and an ability to recover quickly from difficulties. It also implies an ability to bounce back into shape, an elasticity and flexibility to adapt to changing circumstances.
That second point is crucial.
Particularly when things are going well, it’s easy to forget that environmental, political, financial and social disruptions and shocks will continue to happen and change the shape of travel and the world we live in. In fact, they may appear in greater frequency than ever before. Anticipating those new shapes and adapting to their contours — that strikes us as the true essence of resilience.
But how to do that?
Philosophical Bits: Crisis, Mindset, Perspective
First, a few philosophical markers to guide the mind.
1. We don’t know.
The coronavirus is unpredictable. Human behavior and response are even more so. There’s freedom in admitting what you don’t know — so you may avoid directionless speculation and worry.
2. Comprehend and accept the reality of the situation.
You may not like it, you may wish circumstances were different. You may even pretend it’s not as bad or good as it really is. None of that matters. It is what it is.
The quicker you accept reality, the more prepared you will be to respond to fluid circumstances with equanimity, balance and objectivity.
3. Shift from reaction to response.
What’s the difference? Not everything requires a reaction, although everything deserves an appropriate and deliberate response, even if that response is to do nothing.
4. Understand what you can and cannot control.
Airlines will cancel flights and routes, quarantines will be imposed, events will be cancelled, governments will take action, borders may close. Focus your attention and energy on those items within your control.
5. Resist the temptation to operate on the basis of fear.
Fear is rarely helpful. Informed action is. This means not giving into panic, seeking out reliable sources of information (think CDC and WHO) and conducting proper research. For businesses, think twice about taking short-term desperate measures (e.g., slashing prices for a short-term demand boost, especially when prices may not be the root issue) as they may harm you in the long term.
6. Embrace honesty and transparency.
This remains the best policy, whether it’s dealing with clients, employees, or partners. Period.
7. Things change.
We don’t know when or how. We live in chronic uncertainty, with waves that lap the shore and others that feel tidal. It may get worse before it gets better. It may improve quickly. A new pattern may even emerge.
Travel Specific Bits: Travel Behavior Shifts
Next, a few observations and speculations regarding how travel consumers may respond.
1. Travel Decision-Making and Risk Profiling.
Depending on the extent of the epidemic, lesser-known or less popular destinations may be less effected because of elasticity of the travel demand pattern. Intrepid travelers will still travel to the last (wo)man standing, likely to the offbeat and off-path. We recently traveled in Bhutan, Thailand and Malaysia. Regardless of what holds as rational thinking, we felt somewhat shielded from the epidemic in Bhutan relative to Thailand or Malaysia because of how remote it is and how few visitors we encountered on our flight there and on the ground.
Travelers are likely to take into account the risk of the destination. What are my chances of being exposed to the coronavirus in, for example, Kyrgyzstan vs. Italy, in Morocco vs. Malaysia? And what is the sum of the risk profile of the airports and destinations I will travel through to get there vs. my risk profile at home?
Not all travelers will think this way, but many may. Nor will they all make the same calculations, but many will think it through and perhaps make a different decision than they would have prior to the epidemic. So long as travel is not forbidden either to or from a destination, travelers will continue to travel.
2. Opportunistic Travel.
Because some travelers are cancelling their plans, others may take up the opportunity and some of the demand slack. They may take advantage of cheaper and less busy flights, tours, hotels and activities to capitalize on latent travel plans.
3. More Domestic and Local Travel.
If demand for long-distance travel is in decline, now may be the time to consider capitalizing on opportunities in domestic and regional travel demand. Even if people aren’t crossing borders they still may travel within the country or even within the city. If you are a destination or brand, how can you be more interesting to a local traveler?
4. Alternative Destinations.
Maybe it’s just us, but every situation offers a perfect opportunity for alternative destinations — especially if crowds are what travelers wish to avoid. For travelers and the industry, alternative travel destinations may offer some of the moment’s best opportunities. If you aren’t prone to panic, counter-intuition says it’s a good time to travel.
Business Bits: Use the Moment, Think Long-Term
Finally, some business practice responses to consider.
1. Scenario Plan.
As a thought exercise, consider the range of different outcomes of all this. Then ask: How can I use those scenarios to plan, become smarter about my business over the long term, and to learn — as a process, regardless of outcome?
Use scenario planning to ask: what does a softening in demand or a decline in revenue at various levels mean to my business? Consider in those various scenarios what you can (or must) do to absorb the shock. Ask yourself: What can I do to use this circumstance to wisely invest and improve now so that when a new equilibrium emerges, I’m even better prepared?
2. Don’t Forget Overtourism or Abandon Sustainability.
Don’t undo the best practices of sustainability because of economic fear since you are facing a slow or soft season. Don’t dismiss the lessons of overtourism. If you do, you’re bound to replace one problem with another you’d already begun to tackle.
Despite a short-term softening in travel demand due to the coronavirus, concerns about overtourism still hold, even if the hordes of tourists are temporarily at bay, staying at home until the fever storm passes.
3. Take Stock in Tourism.
In the wake of the coronavirus, there’s an opportunity to take stock in the role and position of tourism, to re-calibrate our appreciation of tourism and our understanding of both its positive and negative effects.
With a potential loss of income and decrease in the number of tourists, destinations and companies have a unique opportunity to understand the real socio-economic benefits — and costs and externalities, too — that tourism can bring to a city, a country, a region. Destination managers also have the opportunity to proactively mitigate and manage some of the negative impacts before the tourism flow returns.
4. Tend to the Important, Not Urgent.
If the season is slower than usual, use the moment to re-evaluate, to focus on those “Important, Not Urgent” items. This doesn’t imply heavy investment, but instead tending to things like your website and content, improvements around a property, conversations you’ve been meaning to have with staff or suppliers to improve services, or those items and tasks you didn’t feel you had the time to address earlier.
Think of those things which often go untended because “you’re too busy,” but they could really help strengthen your company and its services in the long term.
5. Re-Position and Strengthen.
Think ahead about how you can improve your business and its sustainability. Consider tuning marketing and messaging to adjust the type of traveler you seek, the type of experience you’d like to deliver. A down market is as good a time as any to consider re-positioning yourself for the rebound. If you don’t want to re-position, simply take stock and strengthen your current positioning and sharpen the message about what differentiates your offering.
6. Think Wisely of the Rebound.
Especially if the effects of the epidemic are short-lived, what is the timing and shape of the rebound? What is the shape of the new equilibrium? How do you best respond to the recovery? If demand softens, resist the temptation to double-down on the recovery just to recoup losses.
Maybe you’ve had an idea but were afraid to try it earlier, afraid to mess up “a good thing.” Now is the time to try it out, maybe even to stand out more than before. If things don’t work out, the loss is mitigated because of the circumstances.
8. Re-balance the Portfolio of Revenue.
Diversification of revenues is especially important for communities and small businesses. When we work with communities and they invest themselves entirely in tourism while abandoning agriculture or other small businesses they ran in the past, we always urge caution. Now is the perfect time not to forget the principles of balance, portfolio management and diversification.
9. Encourage and Support Responsible Behavior and Public Policy.
Lobby governments and agencies to do the right thing — whether that’s inbound tourist oversight, temperature checks, or improvement of health services and access to information. This is not only to prevent the spread of the coronavirus disease, but to offer residents some assurance that they can continue to engage and live with peace of mind. This is also an opportunity to be better prepared for next time — the next virus, shock, or disruption.
During times of shock, the temptation to compete and fight is strong. It’s human. But so is cooperation. And that’s usually what enables us all to be a little better off in the moment and when the storm passes.
Coronavirus and Travel: The Future
Epidemics and systemic shocks are a fact and facet of human life. What separates this one from the last is what we choose to learn from it — and how we integrate those lessons into the subtly different shape of the future that lies on the other side.
Don’t forget that this is a human exercise. If travel has taught us anything, it’s that we are all connected. This time, that lesson lands a little painfully. But how and where we emerge from this chapter will be a function of our recognition of that interconnection, and the compassion and understanding we show for one another along the way.