You Never Want A Serious Crisis To Go To Waste
11 trends and ideas for the global travel industry to rebuild, better
“You never want a serious crisis to go to waste. And what I mean by that it’s an opportunity to do things you that think you could not do before” — Rahm Emmanuel
The explosive growth of travel over the past few decades has fueled extraordinary economic growth for countries across the world and employment opportunities for their citizens. So much so that tourism can be classed as the world’s largest industry, depending on how granular you set your criteria.
Regardless of metrics, tourism is an important employer the world over and has far reaching impacts beyond dollars. Generally, economic growth has gone unchecked at significant environmental and social cost to those countries welcoming tourists.
Passenger numbers could — and did — grow year over year at rapid pace, but nobody stopped to consider whether they should. Inbound countries understandably hungry for tourism dollars, customers with an insatiable appetite for travel, and brands happy to facilitate for profit in between.
With little robust international collaboration or regulation informing a global roadmap for sustainable development, beyond voluntary adoption of a framework like the UN’s Sustainable Development Goals, this growth has had unintended consequences for all involved, with the brunt of the impact felt by the local communities that offer so much to travellers.
Enter 2020. COVID-19. The big reset. Let me be clear in saying that, of course, the pandemic has decimated the industry. Huge swathes of organisations in every sector of travel will not survive, and the consequences on people’s livelihoods — whether directly through loss of employment or indirectly — have been and will continue to be catastrophic and terribly sad.
Those that do survive, or plucky upstarts daring to spring up in these times, have an opportunity, and a responsibility, to rebuild the industry in a way that does a much better job of planning the positive impact and mitigating the negative externalities of travel, together.
It’ll be necessary for the industry — outbound operators, inbound operators, local authorities, local communities, and customers themselves — to ensure the benefits of tourism are unequivocally positive and desired growth is both conscious and intentional with consideration across socio-economic and environmental factors.
Whilst it’s far too early to know what the post-COVID landscape will look like, and the rebound will be designed and led by folk far smarter than I, here are a few trends that we’re seeing emerge, as well as a few longer-term predictions and ideas for how to improve travel, for everyone.
1. Collaboration between public and private sectors to incentivise sustainable development
Support from governments for the industry has been varied worldwide. One way that the public, or indeed private, sector could play a role in fundamentally changing the landscape of both inbound and outbound travel is by incentivising companies to pursue sustainable development. This could either be through stronger regulation, requiring international collaboration, or more simple mechanisms.
For instance, where government support and bailouts are on the cards, financing for sustainable travel brands could be on better commercial terms than for those deemed to be more cavalier with their impact on the world at large. On the other side of the coin any financial support for airlines, not to single them out, could come with strings attached to accelerate de-carbonisation.Some countries like Switzerland and Greece are already using government stimulus to accelerate sustainable tourism development as part of the rebuild.
Longer-term, governments should be liaising with all stakeholders to tackle structural problems like overtourism to ensure development is in line with frameworks like the UN’s SDGs and the Paris Agreement.
2. The opportunity to share economic benefits across communities
Local communities can leverage COVID-19 public gathering restrictions and consumer caution about large crowds by redistributing travellers to different neighbourhoods within urban centres or secondary/tertiary places entirely. This will help spread tourism dollars more widely and have positive social impacts, such as curbing overtourism.
Outbound operators, inbound operators, and DMOs (Destination Marketing Organisations) must work in collaboration to design and promote experiences that appeal to consumers to lure them away from the hotspots.
3. New product innovation requiring less in-destination movement
New product styles will be adopted or grown by existing touring operators, such as a ‘hub and spoke’ model, where customers remain in one accommodation and do day trips, rather than point-to-point multi-stop itineraries. Not only will this limit potential exposure to COVID-19, it reduces operational/commercial risk for operators who will be able to streamline contracting and simplify incident management.
Product styles like this will help limit negative environmental impact through reduced ground transportation and hyper-localised supply chains. However, this would be a trade-off with distribution of economic opportunities, particularly if these sort of trips are delivered in areas that are already popular with tourists.
The best operators will craft experiences that make sustainability a part of the travel experience — think immersive farm to table dining experiences.
4. Cruising can be re-imagined, for the better
Cruise lines have many well-publicized issues with the impact of their operations on the environment. No form of travel is perfect and in their defence the media loves bashing them and not all cruise lines are the same — , despite all being tarred with the same brush.
Perhaps a contrarian view, but I’m bullish on cruises rebounding. The most prominent chatter I’ve heard is that cruising will not recover— the idea of thousands packed together in tight quarters on ships will turn customers off, whilst very few ports will be willing to welcome them anytime soon.
I believe many underestimate just how passionate the cruise community is.
Assuming that demand does bounce back, this presents both a challenge and an opportunity for port communities. On the one hand, they face challenges in welcoming cruisers back safely and may receive resistance from locals. On the other hand, there’s a chance to work with cruise lines and locals to redesign the way they work together to the benefit of everybody.
One way to do that would be mandating that excursions, specifically experiences curated for their positive impact, are taken whilst ships are in port. This would ensure tourist dollars are spent in-destination, which doesn’t happen as much as locals would like.
The potential for cruise customers to benefit local economies through better distribution of economics and controlling their dispersion to different communities is huge. This doesn’t mitigate the environmental impact of huge ocean liners, but if the demand does rebound then improving their operations and economic/social impact on communities would be progress nevertheless.
I imagine behind closed doors there’ll be a dance between cruise lines and governments, negotiating port access with designed-in stronger benefits for the local community.
5. Flight shaming and aviation economics will result in ‘slower’ travel
Aviation is notorious for its thin margins. Significant losses (and likely insolvencies) throughout 2020 and 2021, loan repayments, and reduction in the number of routes flown by airlines will lead to the costs of flying increasing. In the short-term, there may be discounts to lure customers back and help cash flow but long-term they’ll need to recoup these costs with higher prices levied on customers.
Furthermore, social pressure rooted in the environmental impact of flying will also affect consumer behaviour. This will likely lead to customers taking fewer but longer duration trips to offset the rising financial and social costs of flying.
The concept of ‘slow travel’ has grown over the last few years, and these factors will combine to accelerate its adoption amongst travellers.
6. Adoption of digital products has been brought forward by up to a decade
Perhaps, in future, customers won’t even need to travel at all to partake in enriching cultural experiences. The global halt on travel has led to acceleration of innovation when it comes to digital products. In my crude estimation, the pandemic has advanced the nascent category by 5–10 years by forcing suppliers to innovate and iterate, and given customers an incentive to try them.
Democratisation of connectivity and advancements in AR/VR technology will lead to creation of exciting new product catergories that may not only make experiences accessible to segments that previously couldn’t travel — whether for economic, health, or a host of other reasons — and might just stave off wanderlust in frequent travellers. This could reduce the number of trips that they take each year.
Naturally the upsides for the environment would be huge, but will customers replace enough physical trips and experiences with their virtual counterparts to make a difference to the environment? And if so what does that mean for inbound economies reliant on visitors spending their money in-destination?
7. More brands will focus on social purpose
Competing on social purpose has been leveraged as a niche competitive advantage for decades, but is now firmly in the mainstream.
Short-term funding challenges aside, customers are more conscious than ever and are increasingly willing to vote with their wallets. A collective sense of community in the wake of COVID, and memories of how businesses treated their suppliers, staff, customers during these times will remain with them.
Being part of a broader solution to societal problems is becoming an expectation, rather than an afterthought or mere marketing hype. Empirically, customers are willing to pay more for a product or service from a company with a clearly articulated purpose that sits at the intersection of societal needs and business-specific capabilities.
Third party certifications, like B Corp, will gain more prominence as customers look to have their practices audited and differentiate from competition. Internal metrics can and should change for travel companies to measure and improve their social impact, alongside the usual growth and profitability metrics.
Furthermore, consumer-facing brands will be held accountable for the full supply chain and ignorance of malpractice will not be good enough for conscious customers. Supply chain ethics and mismanagement in the tourism industry are often problematic and hard to expose.
All parties, including customers have a role to play in keeping companies honest and improving working conditions, even if it costs more.
8. A boom for tourism businesses based in level 4 countries, but trouble for level 1/2/3 countries reliant on inbound tourism
With travel restrictions likely to remain in place until a vaccine is commonplace, domestic and local travel is likely to be prioritized by cusomers to minimize transmission risk.
Governments within level 1 countries will also encourage, either through regulation or incentives, domestic travel to stimulate economies. This is already leading to a boom for rural operators (think camping, rafting, hiking, wellness retreats etc) as urban residents seek experiences closer to home but away from their cities.
Whilst this will be pivotal for the recovery of the travel and wider hospitality industries in level 4 countries, level 1/2/3 countries reliant on outbound tourism from the same level 4 countries will not receive the same volume of local/domestic travel to make up for the loss and are therefore at greater risk of a sluggish sector recovery.
9. Residents will demand a better balancing of domestic social policy, like housing and wealth distribution, with tourism opportunities
Over the past few years, economic interests and the social wellbeing of local residents in tourist hotspots have been at odds — whether that’s alternative accommodation forcing the price of rent up exponentially or overcrowding.
Local stakeholders will need to work together to create policies that align social needs with what travellers want. Working creatively with the accommodation sector will be crucial. Misaligned incentives and outdated regulation, as is the current case with alternative accommodations in many destinations, drive a wedge and creates friction between locals and tourists, with a small number of local individuals or organisations gaining the majority of the economic benefits.
10. Increasing diversity at every level will drive innovation for customers, economic empowerment for the marginalised, and social change for communities
On the surface, travel seems progressive and diverse. Beneath the surface, there are significant obstacles to achieving diversity and equality that need to be tackled, by everybody, for the benefit of the industry.
Before the pandemic, travel had never been more accessible or cheaper and travellers were coming from a wider range of social backgrounds, races, sexual orientation, and gender than ever before. Travel was democratising, albeit with progress in different areas moving at different paces for a variety of reasons— for instance, making travel accessible for those with physical disabilities lags far behind and there’s a lot of work to do across all the domains previously mentioned.
However, overwhelmingly those in positions of power to shape the industry landscape are men, and the majority in leadership positions within key source markets like the US, UK, Germany, Russia tend to be white. Greater inclusion through targeted talent strategies, inclusive marketing practices, and championing social change will unlock a whole host of new opportunities for the sector to service currently underserved customer segments. Not only is the right thing to do, it’s the smart thing to do.
Speaking to gender diversity specifically, some challenges are broad and pace of change will seem excruciatingly slow for those of us that strive for equality in all instances. As is stands, women do a lot more unpaid work than men and there are entrenched cultural norms around suitable jobs for women. This means that whilst they hold the majority of jobs in the industry, they’re underrepresented in positions of influence. Easing access to the tourism market, whether through technology or inclusion strategies, will empower women to the benefit of society at large and the end experience for travellers.
The travel industry, by its nature globalised and progressive, is in a unique position to accelerate this change and amplify the impact of diversifying travel at all levels. The UN’s World Tourism Organisation’s global report details an action plan for the industry to do just that for women specifically.
11. There will be funding shortfalls for environmental conservation
When the world stopped travelling, many conservation projects saw their source of funding turned off overnight. In the short-term, they’ll need adequate financial support to sustain important environmental conservation efforts.
Tourism and conservation efforts can go hand in hand — there are countless success stories worldwide of integrating conservation with the tourist experience, particularly when it comes to wildlife conservation and national park protection — but they rely on tourism dollars for funding. In the short-term governments, the international community or philanthropy may be needed to plug those shortfalls to protect biodiversity and future tourism revenue opportunities.
Again, key stakeholders can work together to nudge consumers towards more conscious choices in the trips they make by creating and promoting experiences that support these projects and leverage them to enhance the customer experience.
Final Thoughts
The tourism industry reaches all four corners of the earth. It criss-crosses borders, cultures, and everything in between. This creates complex value chains with murky nuance that compound challenges to implement coordinated development plans — geopolitically between nations and commercially between businesses.
In writing this, it becomes abundantly clear that the key to progress and rebuilding for the better will be based in collaboration by all stakeholders to proactively plan sustainable development.
It may seem premature to be planning for travel’s recovery whilst amidst the biggest crisis the industry has ever seen, not to mention the very real ongoing impact on people’s lives across the world. Perhaps it’s even fanciful and luxurious to think about a world where travel’s better for everyone.
But, a clear vision of how we wish the global industry to be allows us to take steps today — whether they’re baby steps or giant strides — to be better, and give us hope that, some day, travel will be back and better than before.