The biggest employer in this world is the tourism industry that has major constituents such as hotels, resorts, airline companies, ground transport fleet, restaurants, etc., as enablers. February 2020 brought a death knell to the entire industry that has put the investors, owners & employees in a state of animated suspension that is unprecedented with more than a billion people directly or indirectly depending on it for a livelihood stunned at the happening & looking into eternal darkness. For many, it sure is the end game.
Has tourism crash-landed or has it crumbled to pieces? I believe the answer is both.
Let us roll back into history and look at the developments that we have seen in the recent past.
The largest segment of travellers are the millennials and they are constantly looking for newer destinations and adventures. Ladakh has seen more groups of trekkers in the last 10 years and the flow of visitors in the last 10 years would far exceed the total people who have visited Ladakh in the last 100 years. The number of tourists who have visited Georgia in the last 10 years will far exceed the number of people who ever visited Georgia in the last 200 years. The list goes on and on for a number of new destinations and a number of new attractions in the old destinations.
There are also weddings that have been planned in the last 10 years as destination weddings which promote tourism. Armenia, Croatia, Costa Rica, Tucson (Arizona) and Jamaica to name a few have been some of the popular destination wedding locations over the last few years. The MICE (meetings, incentives, conferences, exhibitions) has grown over the last few years as there are multiple destinations for MICE outside of Europe and USA which are gaining popularity over the last 10 years.
Medical tourism is another segment which has been growing steadily particularly to countries like India, UAE, USA, and UK as the medical facilities in these countries have been exceptionally good for speciality treatment and tertiary care. People who have the money and are keen to get the best treatment, travel for medical treatment with family members this makes it a huge segment of tourism.
The governments have also been actively promoting tourism over the past few years and the most vibrant in my mind happen to be Malaysia, Sri Lanka, India, Maldives, Caribbean islands, South Africa, and Brazil to name a few. The popular locations of Europe, USA, Far East and Australia continue to draw big crowds which are also growing and swelling on an annual basis.
Now, with this background in mind, I would like to draw your attention to the current situation which is of this Covid-19 pandemic to see how it has impacted and will continue to impact the different participants in the tourism industry.
It is going to be exceedingly difficult for many constituents, especially the stand-alone investment infrastructure providers in this industry to survive. For example, stand-alone hotels must re-invent themselves if they are to stand any chance of competing with hotel chains which will bulldoze the market with low prices that the world would never have seen before in order to regain lost share. Airliner’s balance sheets would remain in the red zone for a long time even though they cannot afford to bring down the prices eventually giving way for clandestine cartel formation that will be ignored by the regulatory authorities to ensure that the infrastructure remains intact, as investments into this sector would be far and few. So, for these two major investment intensive constituents to take off again will require a lot of hard and smart work.
So, who have crumbled? It is the smaller constituents like small fleet owners, restaurants that were depending on tourists for survival, small-time tour operators/specialists, guides and other individuals who were completely dependent on the steady flow of tourists. They are going to take a long time to pick up the pieces and rebuild themselves, and inevitably, many are bound to go bankrupt or move away to other areas which they believe will climb faster.
In both scenarios, the future is going to be turbulent and here again, innovation & out-of-the-box thinking should help revive situations faster and evolve better. Governments will have a very pivotal role to play in this crisis, in order to help revive the biggest employer by radically reducing tax, duties, fees etc.
I believe that it is possible to quickly revive the industry, but it is possible only if the government and the industry enable the consumer to be the winner during these tough times. Opening new destinations are one way to stimulating seasoned travellers to give it a kick start. Few particularly important steps can be adopted by the government and the industry jointly and they are:
- Reduce visa fees across the board for travellers, business or social.
- Free entrance to all government-run museums, heritage sites & encourage privately owned sightseeing spots to follow suit for 24 months (covering a minimum of 2 tourist seasons)
- Provide discount vouchers issued through banks, airlines, credit card companies and others that are genuine at eateries and shops to help boost local small businesses.
- Recognize sound tour operators who achieve certain targets abroad and incentivize them with free tours/ stays with local suppliers and permit them to monetize these freebies without restrictions.
These are just a few steps out of many that can be taken quickly to induce confidence in the market and bring the workforce to restart activities. The advantage that the industry has is that it doesn’t need highly skilled labour in many areas of functioning and has to work as a group and hence if right steps are taken at the right time, revival is possible to pre-pandemic days in less than 2 seasons. Crash or crumble, climbing up together is the need of the hour and it is always sooner the better to have the ‘first mover’s’ advantage.
Every government in the world must revise their tourism policy & help each other to re-start movement like before as it is the need of the hour because it helps solve local unemployment challenges which must be addressed immediately so that there is no social unrest which will lead to real collapse – not just a crash or a crumble.
Sriraj is a hospitality expert specializing in travel and tourism with more than 25 years of professional engagement and experience. He has worked extensively with international hospitality groups and has travelled extensively across the length and breadth of the globe.