By Damien Pfirsch, Chief Commercial Officer, Agoda.
The COVID-19 pandemic has undoubtedly shaken up the world, with travel and tourism, a major global growth driver accounting for 10 percent of the world’s economy, one of the hardest-hit industries. The outbreak has in its wake created severe domino effects in the ecosystem; not only the major airlines or chain hotels affected, but also the 80% of the tourism sector made up of smaller accommodation providers plus the peripheral services associated with tourism, including food and beverage, cleaning service providers, local tour guides and transportation. With World Travel and Tourism Council’s latest forecast that up to 75 million jobs will be at risk, it begets the question: Is the industry going to recover?
The answer is yes, but it will take all hands on deck, and a strong collaboration among all parties.
1. Government support is crucial
The travel industry supports one in 10 jobs within the global workforce in Asia Pacific, the Americas and Europe, and rising to 13.3% of total employment in Southeast Asia. Governments can and are playing a critical role in supporting the industry to protect individuals’ livelihoods and in turn lead to economic recovery. Several governments have already announced stimulus packages to cushion the impact of the outbreak. This funding is proving crucial for the travel industry to maintain business continuity in the short term, but further to that, collaboration and cooperation with key industry players is important to help drive sustainable recovery within this sector. And the industry has not waited for smoke to clear to commence such conversations. For example, governments have already started working with key players and SMEs to develop and promote new, transparent safety and hygiene standards across tourism-related businesses, which will be crucial in driving traveler confidence again.
Tourism ministries and destination marketing organizations (DMOs) can partner with online travel agents (OTAs) to inspire desire to travel and attract travelers to destinations right across their markets in a sustainable way, which supports communities outside of key tourist destinations that were also impacted by COVID-19. These digital travel platforms, with their expansive reach and marketing tools, act as a bridge to help DMOs reach domestic and international travel audiences, while DMOs can encourage future travel planning by funding traveler incentives, while properties offer flexible cancellations.
2. Role of industry players
Agile travel players can take the opportunity to improve their offering and build new capabilities, preparing for when travel picks up again. In fact, the recent guidelines from the United Nations World Tourism Organization (UNWTO) to help the global tourism sector re-open smoothly and safely, emphasised the importance of innovation and technology in building the industry’s resilience. Accommodation providers, airlines and tour operators need to be attuned to changing travelers’ expectations, which may look quite different post-pandemic. Innovation to anticipate these evolving needs is essential and identifying solutions that prioritize safety and flexibility now during travel downtime, will go a long way to rebuilding confidence.
Research from Agoda.com shows that travelers expect more from their travel experience in the 2020s with advances in technology improving the efficiency and ease of booking and traveling. In fact, aside from improving payment options and booking processes, one in two South East Asians anticipate that mobile app check-in will become the norm at hotels or holiday accommodation this decade. This desire may be even more prevalent for travel post-COVID, as people may demand contactless processes as far as possible.
In addition, hoteliers and airlines for example, are reviewing and updating their cancellation policies and procedures to align with travelers’ new expectations. These updates will likely to include more flexible booking options, making use of data analytics to better review occupancy levels and pricing strategies according to demand, as well as working with different distribution channels to reach travelers with their accommodation offers or flight deals. Other players, such as credit card networks and banks, have a role to play as well and can support by promoting safe travel campaigns.
Most importantly, across the travel ecosystem, all parties should work in tandem to not only align the conditions for such new policies and strategies, but also coordinate on campaign themes and periods, making it easier and more attractive for travelers to plan and book their travel. OTAs are well positioned and equipped to connect these players, from DMOs, hotels, airlines, activity providers, and other supporting partners, to a wider consumer audience.
3. Travelers also have a part to play
Last but not least, travelers fuel the sector. People will want to travel again, to explore the beauty of the world on their doorstep and further afield, though we expect the pace of travel industry recovery will differ across the world. However, without the collective understanding for responsible travel once governments begin to lift travel restrictions, the recovery process will be a slow and arduous one.
Agoda’s Next Decade Survey found that more than 25% of people want to make more eco-friendly travel choices in the next decade. The pandemic may make us reflect even more on sustainable travel; travelers may become more aware of the impact of their decisions and habits, which may lead to seeking out more environmentally friendly hotels, or picking destinations in less visited secondary cities to help spread tourism dollars and rebuild local communities.
Travel was one of the fastest-growing industries and over the years we have seen that the industry is resilient in bouncing back from crises. People’s desire to travel will not be quelled. However, bringing back tourists and re-building confidence in travel is going to take new approaches and collaboration. Like the story of the bundle of sticks, where a single stick can be easily broken but not when held in a bundle, it will take a collaborative effort from all players to pull through this together and reinvigorate the travel sector in a safe and sustainable manner.