POSSIBLE FUTURES FOR A POST PANDEMIC TRAVEL INDUSTRY, PART 2 Comments Off on POSSIBLE FUTURES FOR A POST PANDEMIC TRAVEL INDUSTRY, PART 2 604

The first part of this series outlined the background to the disastrous set of circumstances that the travel, tourism and hospitality industry finds itself in.

It also outlined the first of four scenarios: Travel swings back to normal in 2021.

We continue with the next theory…

Scenario 2:  The end of mass tourism as we know it

In this future, the economic recovery plays out in similar fashion to the scenario described before. However, the emotional and social impact this crisis has on humanity is too deep for people to get back to the old normal.

Months of lockdown and new patterns in social distancing, bio-surveillance and our digital consumption will change travel at its core. Spending more time at home, a higher focus on hygiene and health and shunning away from crowded places will be the new normal.

These attitudinal shifts will also be reflected in policy changes in our daily life, such as health and safety regulations, data privacy and border controls. All of these trends have huge consequences on the travel industry

Urban-based crowded tourism will decrease in favor of outdoor and natural environments and long-haul destinations will be perceived as high risk compared to closer-to-home locations.

Tourist destinations will experience different fates. Countries that have traditionally been net tourist flow senders (Northern Europe, U.S., Japan, etc.) will win, while countries that enjoyed positive inbound numbers (Southern Europe, Thailand, Mauritius, etc.) will be on the losing side.

Beyond washing hands

In a rush to build confidence among travelers, hygiene protocols and labels have started being implemented across all destinations and companies from the early days of the outbreak.

Singapore was a pioneer in its announcing of a nationwide hotel audit scheme branded as the “SG Clean” label, regulating measures like temperature screening intensity at hotel entrances and disinfection frequency rates in common areas and guest rooms. 

Hong Kong quickly turned its airport into its first line of COVID-19 defense by sending all incoming travelers to the AsiaWorld-Expo upon arrival for throat saliva samples, as well as providing tracking bracelets for visitors tied to a smartphone app.

Elsewhere, Emirates has launched on-site rapid coronavirus tests that take 10 minutes for passengers landing in Dubai. The city of Madrid, badly hit by the virus, has launched its own “Hotels COVID-Free” quality stamp.

In this scenario, this patchwork of protocols and certificates all over the world generates confusion and mistrust across travelers. In a coordinated effort by governments, international tourism organizations and major industry associations, a new universally accepted health certificate label will be established in 2021 for air transport and hotel accommodation ensuring consistent standards worldwide.

In aviation, discussions around the end of the loathed middle seat on aircraft will turn into reality, food services onboard becomes a distant souvenir of another era, indicators like cabin air recirculation rates will emerge and face masks will be a part of new standard safety measures on planes.
 
Hotels will focus marketing efforts away from the beautiful pool landscape towards features like disinfection standards, touchless technology for all types of physical interactions and larger spaces between sunbeds. Hotels will switch to room-only food services, transforming breakfast and other food-related spaces into spacious lounges.

What will hurt a hotel’s balance sheet is the need to keep hotel occupancy rates low, with a health buffer of over three nights between guest stays in the same room to eradicate any risk of contaminated surfaces. 

The alternative accommodation industry will enjoy the advantage of being perceived as a less-crowded lodging option but will have a harder time building travelers’ confidence around hygiene and health standards.

Industry leader Airbnb will push hard amongst its hosts to establish a new set of cleanliness and disinfection protocols, but certain travelers will steer away from private accommodation for good.

The travel industry faces a soul-searching moment 

All these measures will have a dramatic impact on the industry economy. In a world where maximizing occupancy rates or load factor has been turned upside down, travel companies will have to take a hard look at their cost structure and their pricing strategies.

Some companies will feel the punch more than others. Low-cost carriers will be forced to rethink their business model. Their strategy of squeezing as many passengers as possible on aircraft, which in turn stay as in the air as much as possible, will become unsustainable. 

Network mega-carriers relying mostly on long-haul flights channeled through massive hubs will also face a gloomy future. Fewer long-haul trips and travelers shunning crowded places will trigger a significant downsizing of airlines with sky-high airplane orders and iconic airport projects coming to a screeching halt.

Short-haul flights, already under attack pre-coronavirus from the flight-shaming movement, will see the shift of travelers towards lower-carbon-emitting transport means like high-speed trains. 

Corporate travel apocalypse

One of the most radical transformations in societal attitude will be around business travel, fueled by virtual meeting practices adopted during the lockdown period and new corporate travel policies implemented to curb expenses during the cash crunch.

The irreversible decrease in business travel, by any measure the most profitable clients of the travel industry, will hit the balance sheets of travel companies like a sledgehammer.

The implosion of meetings and events activity during the crisis was a watershed moment for the industry. The unstoppable rise of virtual conferences and webinars during the lockdown period and the perceived danger of large crowd gatherings will transform major convention centers into indoor leisure spaces or city landmarks of a past golden era. 

The rise of a new distribution landscape 

Two types of travel intermediaries will suffer a Darwinian process of natural selection.

  1. Traditional offline travel agencies that were behind the digital curve will slowly fade into extinction in this hyper-connected world.
  2. The few travel management company survivors will be the ones rapidly adapting to a significantly smaller market and to a change in paradigm in servicing and duty of care.

On the online travel agency front, there will also be major changes in play:

  • Servicing and connecting with customers during the darkest moments of the crisis will turn out to be the most powerful loyalty program any marketer could conceive. Speedy refunds for cancelled bookings, transport and lodging rebooking alternatives for clients stranded overseas and an ongoing and candid communication strategy will win the hearts and pockets of customers.
  • Deploying bots and machine-learning algorithms, allowing for automation of back-office processes and customer service interfaces, will make the most successful players future-proof for disruption in the years ahead.
  • Many will integrate a traveler’s health data across the entire industry’s service chain, in an ecosystem where health information will become a mandatory data field for all actors.

Faced with our rapidly increasing digital life, where tech giants try to keep users locked into their ecosystem, the most successful travel players will start to integrate daily users’ services like inter-urban mobility, local entertainment booking facilities and food delivery services, in order to remain relevant in the customer’s mind.
 
This trend towards Asia-like super apps in the Western World will spark a frenzy post-crisis, with merger activity between travel tech giants and mobility and food delivery tech players, whose valuations suffered a massive downward correction during the economic deadlock due to their weak balance sheet.

* Check scenario 1 here, then 3 and 4 when they are published next week.About the author…

Mario Gavira is a tech executive, angel investor and board adviserAirlineAirportGround TransportationHotelOnline Travel AgencyPrivate AccommodationTours and ActivitiesCoronavirus

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THE MALDIVES, MAURITIUS, SRI LANKA, WHO IS DOING WHAT TO RESTORE TRAVEL CONFIDENCE ACROSS THE INDIAN OCEAN Comments Off on THE MALDIVES, MAURITIUS, SRI LANKA, WHO IS DOING WHAT TO RESTORE TRAVEL CONFIDENCE ACROSS THE INDIAN OCEAN 391

After the recent round of short interviews with hospitality leaders in the Maldives, Mauritius, and Sri Lanka, these were the key messages that will win customers back. 

MALDIVES – No social distancing, but a rather physical distancing in the Maldives.

One month ago the Maldives reopened the country borders to international travelers and since then, welcomed nearly 4500 tourists mainly from the UK, USA, UAE, Germany, Swiss, and Russia. With strict health and safety standard procedures implemented across the country, starting from the airport to the resort islands, the ‘new travelers’ have already voiced their appreciation for the level of care and hygiene on various social media and forums. But if being welcomed by the resort representatives wrapped in PPE and armed with face shield, gloves, and masks might not feel like the most relaxing start of a much-needed holiday, Afeef Hussain, Regional Director at LUX* Resorts in the Maldives, reassures that guests do love the feeling of safety 

“Being able to arrive at the resort and start enjoying their vacation right away not having to worry about anything, is what our guests want”

Together with high levels of hygiene, another key element to restoring travel confidence is the value of the experience. Afeef Hussain shares that the ‘new travelers’ are not going to spend the same amount of money they used to. Therefore, the value of the vacation is under great scrutiny and determines whether your customer might decide to return to your hotel or to travel somewhere else. 

“There is no such thing of ‘new normal’, but rather a ‘new mindset’”

To ensure that each action taken to uphold the hygiene standards at the resorts is mutually beneficial, Afeef says that whatever is done for the guests, is also done for the team members. This ensures their wellbeing and wellness and translates the Company’s core message of ‘care’ into action.

SRI LANKA – Borders are closed, but our resorts are not.

Sri Lanka has recently delayed the opening of the country borders, but hotels and resorts across the island are back in business with the local market. The execution of health and safety standards at each property has been instrumental to restore a domestic travel confidence, says Arjuna Perera – Sales Manager at Theme Resorts & SPA based in Colombo. To start with, Arjuna Perera and his team produced a video message to show all the procedures and reassure their customer base. 

‘We immediately created a survey, to help understand what are our customers’ priorities at this critical time’ 

But, as we know, the local market demand alone does not cover it. A voucher system propelled by Arjuna’s sales team successfully generated over 1000 room nights. This shows that flexibility is another key factor to encourage travel demand. Flights can be canceled or delayed, quarantine systems are changing by the day. ‘All we need is a bit of flexibility’ says Arjuna ‘and the results are showing us that people are keen to travel, they just want to feel safe’. 

But how do we ensure social distancing in Sri Lanka? For Theme Resorts & Spa, more than distancing, we talk about isolation, but in a good way. The nature experience of some of their properties is guaranteed to the point that to reach some of their glamping sites, you will have to be picked up by the hotel concierge somewhere in the jungle.

MAURITIUS – A contactless experience and smart use of technology.

As Mauritius prepares to reopen borders next month, the health & safety checklist of the destination seems to grow longer.

The use of technology, however, plays a key role in the destination, currently undergoing a digital transformation with a brand new website, a travel platform in the making and a range of digital solutions for tourists. Airline and travel industry expert Youvraj Seeam, based in Mauritius, shares that to pick up on travel confidence, we first have to observe the consumers’ changing behaviors and thereafter understand the new demands.

“For this to be truly successful, we need collaboration with all the stakeholders across the industry”

Youvraj shares that tools like the Travel Recovery Insights Portal of ARC & Boston Consulting, the McKinsey Travel Pulse, or the Traveller Trends Tracker by Adara must be on top of today’s agenda for the modern marketer. This would enable industry leaders to have more visibility and start making progress along the way.

Based on his experience in the airline industry, the key message needs to revolve around hygiene standards and procedures from the moment the traveler checks-in, boards the plane and reaches the destination. Once arrived, says Youvraj, a contactless experience needs to be in place to ensure a safe transit until the guest ultimately reaches the hotel.

 About the author:

Dolores Semeraro is a multilingual professional speaker and trainer, fluent in the Chinese language. She provides strategic direction and training courses to companies and tourism institutions helping them to speak today’s digital language of their audience. Her vision is to create a sustainable digital connection between travel industry stakeholders and their desired customers.

IT’S NOW OR NEVER INDUSTRY GLOBAL RESET BY MARC WILLIAMS Comments Off on IT’S NOW OR NEVER INDUSTRY GLOBAL RESET BY MARC WILLIAMS 475

IT’S NOW OR NEVER, I am only tired, as the song goes and so says mother Earth after years and years of succumbing to the filth that are being spilled into her bosom by the 7 billion of us.

 We are at a crossroad and an eye-opening moment that have to be reckoned with. The changes to the way we live, the way we do business and the way we conduct ourselves in this world will happen whether we like it or not. It will be subtle and forcing us to be the architect of this change – it’s another industrial revolution enabling humans to evolve into a more conscientious being for the benefit of all and mother nature. And it’s worth mentioning here the abrupt change we are witnessing in the hospitality industry. 

Being reliant on large number of human capitals, the hospitality industry has been the most affected by the global pandemic, like no other. Think about it, its an industry that needs an intensive labour force to serve its consumers, it needs the use of fossil fuel to allow its consumers to travel and at the core of the travel industry there is the need for the Oil & Gas producers to power the planes and run the establishment that serves the hospitality industry. So, it’s an industry that at the core, survives and becomes profitable on the demands and supply within the Petroleum Market – for instance, when we see a low cost of crude, the demand rises, consumption rises and tourist travels. On the other hand, as the demand for Petroleum products rises, we see a rise in production which accompanies the rise in crude price. At the same time industrial catering contracts are signed in numbers around the Middle Eastern oil producing countries to support the crude majors, like BP or Total, and their service partners.

Then sometime in March 2020 the world stopped…

As every human activity came to a standstill, the price of crude oil stumbled and crashed as the demands crumbled. Unfortunately, we have made crude oil the center of our existential activities; that businesses linked to its production, whether directly or indirectly, are struggling to keep afloat during this pandemic period. This is a true portrait of our vulnerability as humans who have become too dependent on fossil fuel – the only matter that is damaging our beloved mother Earth.

In light of the new normal as we fashionably call it these days, the only way forward for the hospitality industry, but more certainly for the industrial catering sector, is automation and robotics with a change in attitude within the concept by all stakeholders and consumers. This in turn will reduce the heavy reliance on large manpower thereby improving profitability which has hit the industry since the fall of crude price. Although change is a pill hardly accepted by people entrenched within a certain framework and mindset, and unless changes are actuated, the hospitality industry may lose the precious backing of the investors. 

How can we forge this sudden change then…? One aspect with the labour intensive hospitality industry is to use automation and robotics wherever possible but still remain within the framework of good practice. For instance, within the kitchen we have already started using automation when it comes to the processing of veggies, washing up of cutleries, pots and pans. What we need now would be the autonomous self-cleaning equipment – in the domestic market we already have self-cleaning oven – with a bit of imagination we can have self-cleaning combo oven and cooking plates inserted on a stainless free stove where every debris or liquids drops into an underlying tray from where they are sucked into garbage cannisters. The idea here is to reduce the manpower wherever possible and keep only the chef and a small brigade to assist him in the mass production. 

The other crucial change within the industrial catering facility, most appropriately, would be the implementation of self-service as a general rule of the game. This will limit human contact and adheres to the on-going rule of distancing as applied in the pandemic situation. The onus will then be on the catering team to properly and intelligently prepare the plated layout which is then collected by the consumers. This process will help on portion control amongst other things, which is important in controlling the cost. 

Obviously, the arguments for change and innovation within the hospitality industry is a hot subject at the moment and should be for quite some time. After all we do not know when the pandemic will subside nor when will a real cure be found! However, we have already engaged in a new way of living and a new way of doing business, which in the industrial catering sector it means finding innovative ways to reduce the reliance on large manpower and engaging strategic actions to reduce the cost of doing business in order to be more profitable.

Let’s hope at the end of the day, the right course of action is taken with the interest of all the stakeholders considered and enough investments are made to meet up the challenge of considerable change. 

Marc WILLIAMS