06 Apr 2020
THE TOURISM SECTOR IS IN A STRESS SITUATION NEVER SEEN UNTIL NOW.
Once normality recovers, nothing will ever be the same in tourism.
The global recession caused by the “coronavirus” pandemic will surely entail numerous changes both in personal and family life and, of course, in the economy and in the sectors of activity. In tourism nothing will ever be the same. The restrictions of recent weeks and the fact that a return to activity is not contemplated immediately, make us rethink the future of the sector and its companies.
In a previous BLOG on March 17th, there was already talk of changes in the tourism sector. Especially they made reference to the new horizons that could be opened in the MICE segment.
All this situation has brought about a level of stress in the sector as it has never been experienced before and will test its resilience. The entire fabric of tourism companies and entities had overcome other crises due to economic recessions, warfare and other internal situations in some countries, but in no previous case had a situation like the current one been reached. Starting with the confinement of millions of people in China that brought down the reserves of Asian tourists around the world, t
the internal decisions of confinement in other countries followed, closing the global tourism space. Italy, for example, started by isolating 16 million people in the northern par. A few days later the same measure would apply to the rest of the country. To stop the spread of the virus, different measures have been taken, both collectively and individually, by different countries. Weeks ago governments of different tourist destinations decreed the suspension of travel and the entry of visitors from risk areas.
Spain, currently, is on the list of countries to watch for the number of infections and governments of many nations have decreed the prohibition of entry of Spanish tourists in their countries. There are also drastic restrictions to travel to Spain. For example, the demand for travel in the United Kingdom, which provides 18 million trips to Spain, is now paralyzed by the confinement of the British population. The impact on the tourism sector will be seen in the future, since it will depend on the duration of global confinement and the magnitude of the pandemic. The most optimistic believe that a return to normalcy could begin as of the second semester, even with restrictions, this would reduce the feeling of alarm. However, this situation will cause changes in the sector and the fact that some of the measures and aid have not been carried out quickly from governments and administrations, it is probable that some companies may be left behind.
The demand for
travel, presumably, could wake up after the summer and take off from October,
as revealed by flight search data that is collected in different reports from
both international public organizations and private digital marketing
companies. Precisely in last week’s BLOG, reference was already made to the
probable recovery of the market from the second half of 2020. It is in this
sense that private companies and public sector entities and organizations also
work. From the tourist promotion administrations of Catalonia, a guide document
has already been prepared in which some companies and organizations in the
sector have actively collaborated.
The Action Plan, called #EstratègiaZer0, reflects on the 2020 actions and objectives. The Tourist Marketing Office of the Barcelona Provincial Council has worked intensively on it. This plan already marks some lines of action to be implemented once the first signs of recovery begin to be seen. It is believed that the MICE sector could be one of the first to recover, as we referenced in the BLOGS on both March 17th and 10th, although perhaps the sector should reinvent itself. As soon as it is possible to go outside again, everyone who has been confined will have the first intention of traveling by car and making short distances, with overnight stay or not, but within the community or region itself and allowing some outside activity after so many days of #StayAtHome.
According to the surveys obtained, being able to enjoy nature, culture, sports or do local wine tourism activities are in the initial preferences of the families once the confinement is finished. Many of the tour operators these days are already preparing inspiration campaigns that encourage them to make reservations as soon as possible. Therefore, tourism companies must be prepared and initially work local markets, to later expand to nearby markets (of the countries that surround our tourist region) and, in a third phase, carry out more intense promotional actions dedicated to holidays or short stays in coast aimed at tourists residing within the European scope. It remains to be seen when actions to promote and reaffirm the tourist destination of Catalonia for more distant markets, such as those in America or Asia, which have been in constant growth in recent years, can begin. Everything will depend on the initial tourist evolution that the nearby markets can make.
For its part, the Catalan Tourism Board prepares an updated weekly report regarding the news and changes that occur in tourism activity. Regular monitoring is carried out from the public administration. In the last report published (04/03/20), the situation is updated since the declaration of the state of alarm and no major changes are expected until the end of April. In the global flight operations infographic, a decrease in operations is detected worldwide, although there are some movements of new reservations. In the case of Barcelona airport, companies like Vueling have reduced their activity by 95%. The rest of the companies are in the same line: Iberia (-89%); Norwegian (-91%); Ryanair (-97%) and Easyjet have completely stopped their activity.
One of the essential objectives will be to generate action policies that transmit confidence to the client, both at the time of being able to formalize their first reservations and in the regulations for changes and/or cancellations of services. The uncertainty of whether a trip or a hotel night could be made could delay the start of the recovery. Building confidence to be able to enjoy a vacation or carry out activities once the confinement is finished will be essential in the sector.
The forecasts of these different studies highlight that shorter trips will be made and that many more individual services would be contracted instead of the traditional tourist packages. At the same time, the intermediation proposals of the tour operators that would allow to obtain a certain confidence regarding reservation and service cancellation policies would be used. Apart from this generation of trust, other measures promoted by the public administrations are being worked on such as the protection of the payment chain to prevent the entire system from failing, the restructuring of fiscal policy, accompanied by the reduction of the quotas of the health public system and the defense of tourism as an engine of economic activity to enhance the recovery of companies and also prevent self-employed and entrepreneurs from being left without work. These actions would be essential and should be implemented immediately so that the recovery periods are as short as possible and can guarantee the survival of the largest number of companies, whether directly related to the tourism sector or linked, even indirectly.
Given that the
young generations in recent years have generated changes in the way they
consume travel and tourist services, as previously highlighted, the sector
reinvents itself and works intensively on innovation and improvement in the
management of its proposals and services. All its lines of action must be
related. It will take hard work to recover which, according to some reports,
should be done in three phases.
- Start with the recovery of domestic trips (similar to the one that has started in China and South Korea (BLOG March 30th).
- Proximity trips (European countries)
- Long-haul trips. This phase is the one that will take the longest to start up and it is not expected to start any activity until the first quarter of 2021.
It will take time for the industry to recover, but the most urgent thing is to work to regain consumer confidence.