19 minute read
Winds of change
The past decade witnessed a remarkable transformation in global tourism. As one of the world’s fastest-growing economic sectors, tourism levels recorded all-time highs. Compared to 2009 figures, international tourist arrivals grew from 880 million to 1.5 billion in 2019, while the industry made up 10 percent of the global GDP in 2019 with a total contribution of US$8.9 trillion.
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Over the course of the last ten years, as several hidden gems came to light, beckoning intrepid travellers from around the world, a global shift in economic power saw the Middle East placed at the centre of the tourism boom. Several cities and countries across the region developed into significant hubs for travel and leisure. The most successful of all destinations was Dubai, followed closely by Abu Dhabi, Muscat, Ras Al Khaimah and also Saudi Arabia, which, in 2019, made a monumental shift as it opened its doors to international tourists for the first time.
Travel providers ushered in 2020 with their sights set on riding this wave of growth, instead, the new decade brought this steady ascent to a grinding halt due to the pandemic. COVID-19 caused tourist arrivals to fall to extraordinary depths, plunging the industry into an unprecedented crisis. As borders began to close to curb the spread of the virus, airlines grounded their fleet and hotels put up the shutters, bringing the travel and tourism business on its knees with millions of jobs at risk.
Now, almost a year since countries first imposed national lockdowns, the end of the crisis seems to be in sight. Nations are now locked in the race to vaccinate their populations and economic recovery efforts are underway. Although experts have predicted that tourism spend will not return to pre-pandemic levels until 2024, the industry remains hopeful about a gradual rebound with key players all set to use this new dawn for the travel and tourism industry to build back better.
THE ROAD TO RECOVERY
A Global Holiday Intent survey conducted by YouGov on behalf of Reed Travel Exhibitions revealed that nearly half of those surveyed intended to travel in 2021. Expatriates from the UAE and Saudi Arabia also expressed that they were looking for a relaxing holiday or hoping to travel home during the year to see family and friends. These findings are supported by recent research conducted by Expedia and VisitBritain, which has shown that consumers are still very much dreaming about taking a holiday this year.
Scott Livermore, Chief Economist, Oxford Economics, Middle East, said: “As vaccine roll-out progresses, we expect to see a significant return
to international travel, although there will not be an immediate rebound to pre-pandemic levels.
“Some lingering restrictions will continue to hamper the recovery, while consumer sentiment will also be affected, at least in the near term, leading to some reduced propensity to travel, especially from older, more vulnerable demographic groups. Medium-term travel demand is also expected to remain lower than the pre-pandemic projections due to economic scarring over this period.”
As the industry begins to bounce back, Livermore believes that this period of recovery will be shaped by a host of factors. “Vaccines will be essential for the end of lockdown measures and easing of travel restrictions. However, vaccination alone is not likely to be enough to drive recovery, especially with the uneven and delayed roll-out in many countries to date.
“Continued testing on departure and arrival will play a role in facilitating a return to travel. This will be essential to limit transmission of the virus across borders in the absence of widespread immunity and will also help to raise confidence in the safety of travel, along with some continued requirements for social distancing and mask-wearing.
“Some form of travel pass is also likely to facilitate safe travel to countries for those who have received approved vaccines.
“Destinations will also benefit from clear and coordinated messaging of current conditions and openness. Continued adoption of digital platforms, including social media and video content, will help to clearly communicate messages to potential travellers, retain engagement and interest as well as drive market share in recovery.”
Offering insight into what the path ahead will look like within the next few years, Rachel Read, Director of Insight, European Tourism Association, said: “The road to recovery will be full of twists and turns, ups and downs and even detours. The speed along which the road is travelled will depend on consumers’ motivation to take holidays, the amount of money they have to spend on tourism services as well as the cost and availability of a means of transport to take them to where they want to go.”
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TRENDING NOW
Despite new waves of restrictions and the ongoing uncertainty, the innate human desire to travel has not dwindled. In fact, the enthusiasm for travel has grown immensely with the pent-up need to explore the world. This has given rise to several new trends in the travel and hospitality industry.
Digital nomads, for example, are choosing to trade home base for exotic international locations that allow them to be permanently out of the office while earning their living from a laptop. With governments now offering long-term visas, the “workation” trend is likely to continue, with more investors getting on board to lure this new generation of travellers.
1 Thailand 2 Dubai 3 & 4 Navigating the ‘new normal’ 5 Greece
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Further highlighting emerging trends, Read said: “Many have speculated that recovery will be led by domestic rather than international travel and that remote destinations will outperform cities. This may be true in the short term, but a strong appetite to experience a foreign culture that cities offer so very well means that the potential for urban destinations to rebound should not be overlooked.”
Livermore also believes that shorthaul and domestic travel will comprise a higher share of travel in the coming years. He said: “Domestic travel share rose in 2020 due to closed borders but remains elevated even as restrictions ease. This will be driven by lingering concerns regarding the safety of international travel. The higher share of short-haul and domestic travel will also be influenced by some cost-saving in the early stages of economic recovery.”
SAFE YET MEMORABLE
There is a range of evidence from research undertaken by the European Travel Commission and others that consumers have become acutely aware of the need for their travel experience to be safe. This means that travellers are now paying greater attention to the protocols that are in place to minimise the risk of being infected by the coronavirus while shortlisting their next travel destination.
Read said: “Perceptions of COVID19 safety and its impact on their trip is high on the list of visitor concerns. But this does not mean that all of the factors that consumers considered vital when choosing a destination prior to the pandemic have diminished in importance. Potential visitors still want to have a great experience on their trip as this is at the heart of travel motivations.
“A destination that offers great value for money, lots of things to see and do, a friendly welcome and the opportunity to spend quality time with friends and family will still prove more attractive than one that does not. This makes the visitor experience in-destination central to the COVIDsafe recovery of the travel industry.”
NEW OPPORTUNITIES
The impact to the travel industry in the wake of the pandemic is unsurprising but with more providers taking note of consumers’ pent-up demand for travel, the new and innovative solutions being introduced are fueling the sector’s recovery.
Livermore said: “The travel sector has been harder hit than the wider economy, bearing the brunt of lockdowns, enforced business closures and travel restrictions. A complete economic rebound will not be possible until the travel sector is able to fully recover.”
And while businesses continue to do their part, Livermore also believes that new investments can further contribute to the industry in this phase.
“Continued support for the sector is essential at this time to ensure that businesses are still able to meet demand as travel returns. This includes investment in new capacity and technology to help the sector understand evolving traveller requirements and adapt and expand to meet these needs.”
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Taking responsibility
With responsible travel growing in importance, the industry is employing new tactics and assessing ways to address the challenges posed by climate change and the pandemic
Even in the pre-pandemic world, the issue of climate change was more prevalent than ever before. In 2019, it was largely due to the efforts of Swedish teenager Greta Thunberg that the devastating impact of rising sea levels became more pronounced. From convincing her parents to adopt several lifestyle choices that would help reduce their own carbon footprint to speaking at the United Nations Climate Change Conference, Thunberg firmly stated that humanity is facing an existential crisis because of global warming.
Yet, just two years after her historic speech, the world seems like a completely different place, plunged even deeper into the global environmental crisis. The issue of sustainability in the midst of the challenges brought about by the pandemic continues to remain vital.
Fortunately, the travel and tourism industry has long been looking at ways to combat various sustainability concerns. Even with the complications and crippling effects of COVID19, travel and tourism businesses are keeping the environment in mind as they rebuild, meeting the growing need for a sustainable reboot of the sector as a whole.
If one positive outcome from 2020 can be highlighted, it is that the idea of responsible tourism has risen to the forefront. Experts believe that in light of these exceptional circumstances, green travel is a trend that will only grow in the years ahead.
NAVIGATING THE NEW NORMAL
In a policy brief from August 2020 titled ‘COVID-19 and Transforming Tourism’, the United Nations stated: “Rebuilding tourism is an opportunity for transformation with a focus on leveraging its impact on destinations visited and building more resilient communities and businesses through innovation, digitalisation, sustainability and partnerships.”
On the occasion of World Tourism Day in September 2020, António Guterres, Secretary-General of the UN, pointed out that in light of COVID-19, “We have an unprecedented opportunity to transform the relationship of the tourism sector with people, nature, the climate and the economy.”
Harold Goodwin, Responsible Tourism Advisor at World Travel Market, said: “The COVID-19 pandemic has paused the inexorable growth in domestic and international tourism facilitated by fossil fuels and increasing prosperity. The pause has created an opportunity for reflection and at least a chance that we might rebuild travel and tourism better.
“With the pandemic, climate change, biodiversity loss and increasing inequality, hospitality is operating in a perfect storm of health and safety, environmental and socio-economic challenges. The new normal will be a challenging trading environment for business and leisure travel for several years.”
Much can be gleaned from the handling of the pandemic by governments across the world and parallels can be drawn to the issue of sustainability. “The good news is that governments have taken responsibility for tackling COVID-19, understanding that the urgency, scale and complexity of the problem mean that it cannot be left to the market.
“The challenge of climate change is also characterised by scale and complexity. But, it is not seen as a clear and present danger and it is not seen as urgent. Scientists and economists have been telling us for years that there is a growing problem and that the later we address it, the more difficult and costly it will be.”
The responsibility of addressing and mitigating these concerns ultimately comes down to individuals and business, as Goodwin believes. “Climate change and the coronavirus have one major thing in common – the behaviour of each of us, as individuals and businesses, adds to the problem.
“To protect ourselves and others from COVID-19, we are encouraged
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5 foreseeable future, trust is the new currency of domestic and international travel. The hotels, in particular, have learned a great deal about rebuilding trust and providing healthy and safe accommodation for guests.”
TRANSFORMING HOSPITALITY
Several industry heavyweights have addressed the issue of sustainability, setting an example for others to follow suit by introducing a host of measures to ensure that profits do not trump the damage to the environment. This has led to travel and hospitality providers taking the right steps in the right direction to reduce their carbon footprint and do their bit for the planet.
Paul Gardiner, CEO, Mantis Collection, said: “The industry is really beginning to embrace wellness and sustainability. This is very natural to Mantis as nature, conservation, wellness and eco-tourism are part of our DNA with our name meaning: M=man, A=and, N=nature, T=together, I= is, S=sustainable.
“We have conservation-focused luxury hotels, eco-lodges and waterways across the globe and our sustainability goals are achieved
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to wear masks and social distance. Whereas, climate change requires that we emit fewer greenhouse gases, which have negative impacts on our daily lives. The longer we delay, the greater the impact will be on our freedom and our standard of living. But one thing is for sure. There will be no quick, painless fix for climate change, although there may be one for the coronavirus.”
TRENDS TAKING SHAPE
Last summer, with people confined to their own countries, new travel trends taking shape gave the world a glimpse into what sustainable tourism could look like. Many opted for staycations in their own countries. In Germany, for instance, residents took around four million more domestic trips than they did in 2019.
As the number of air trips and cruises fell drastically in 2020, the demand for camper vans, motorhomes and bicycles rose. Faced with pandemic restrictions, many travellers also opted for more sustainable alternatives when choosing their accommodation. Many preferred vacation apartments and campsites, and in doing so, significantly improved the carbon footprint of their vacation. But whether this trend continues after the pandemic remains to be seen.
Goodwin explained: “The pandemic has badly damaged our industry and we cannot avoid the uncomfortable truth that travel spreads the virus. For many decades travellers and holidaymakers have jetted off across continents with little concern for their health and safety. No longer. For the
7 through the Mantis Impact Experiences division as well as through the Mantis and Accor Foundation – Community Conservation Fund Africa (CCFA).
“The CCFA was formed to address social and environmental imbalances and to find a workable solution to the growing conservation crisis. It does so through grantgiving, education and working in partnership with local communities to implement management systems on the ground, which will protect the wildlife and the wilderness areas.”
Mantis Collection also believes in involving guests in their conservation efforts, allowing them to participate in a host of experiences, such as planting trees in their holiday destination or interacting with local beekeepers.
“Mantis guests are also invited to offset their carbon footprint using CCFA’s carbon calculator and carbon offset projects,” Gardiner added.
Close to home, Mandarin Oriental Hotel Group has taken a host of steps to ensure more sustainability in travel and hospitality. Jeremy McCarthy, Group Director of Spa & Wellness at Mandarin Oriental Hotel Group, said: “Our big focus has been on eliminating single-use plastics in all of our hotels this year. The pandemic has made this more challenging than we would have liked as the industry tends to rely on disposable single-use plastics to create the most sanitary and hygienic conditions possible.
“But we did not give up on our goal to eliminate single-use plastics in our hotels by the first quarter of this year. We have still not found replacements to all the items we use but we have eliminated over 90 percent of the disposable plastic consumed in our hotels, including shampoo bottles, water bottles, plastic bags and more.”
At Red Carnation Hotels, the group began contributing to the Sustainable Development Goals issued by UNWTO in 2008 by launching The TreadRight Foundation with a mission to “make travel matter” and create a positive impact on the planet, its people and wildlife. These measures were further enhanced post-COVID-19, which allowed for a sustainable rebuilding of its offering.
Jonathan Raggett, Managing Director at Red Carnation Hotels: “The initiatives we are working on include increasing our use of local and organic produce, reducing food waste and promoting the use of renewable energy. In addition, we’ll continue to progress ongoing projects such as the removal of all single-use plastics.”
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The path to recovery
While the path to recovery will vary by market, China’s distinct experience holds lessons for other destinations as, with low COVID-19 transmission rates in the country, traveller confidence has improved
When countries around the world began enforcing the second wave of national lockdowns, domestic tourism in China was thriving at around 80 percent of its 2019 levels. Thanks to its effective control of the COVID-19 pandemic, the country saw a quick recovery in local tourism, making it one of the first nations to bounce back to some form of social normalcy.
As of December 2020, domestic air travel in China had almost fully recovered, while hotel occupancy recorded a significant boost since the beginning of the coronavirus crisis. Much of this rebound can be attributed to travels made during the country’s Golden Week celebrations in October 2020, which accounted for a total of 637 million domestic trips.
“The decisive action taken in China to contain COVID-19 and to prevent further infection was the key factor contributing to the fast rebound of travel and tourism within China as early as May 2020, which was further enhanced during the Golden Week holiday in October 2020,” said Adam Wu, CEO, CBN Travel & MICE and World Travel Online.
THE DOMESTIC BOOM
Domestic travel has always been a key driver of tourism in China. Since 2015, the local tourism industry has blossomed at a compound annual growth rate (CAGR) of 10.3 percent. In 2019 alone, the number of domestic trips grew to 3.1 billion. While this increase would have ideally continued at a similar pace, the snags caused by the pandemic altered its momentum.
Yet, thanks to the country’s fast recovery, GlobalData forecasts that between 2019 and 2023, domestic trips will see a CAGR increase of 7.7 percent, which highlights not only the rise of domestic tourism in China but also its role as an important component of the Chinese economy.
The boom in domestic tourism can be attributed to a host of factors, from China’s effective measures to curb the virus to its vaccination drive. Also, as countries around the world shut their borders in a bid to combat the virus, trans-provincial travel resumed in China. This kept many frequent international travellers within the country, causing them to turn to domestic travel instead.
Another significant factor aiding the recovery of tourism within China was the country’s strict quarantine measures for those returning from abroad. This led globetrotters to choose China’s own provinces over a trip overseas.
To meet this growing demand for local trips and attract citizens, industry providers put forward innovative packages and promotions, which in turn helped boost business while contributing to the industry’s recovery. Airlines in China rolled out several programmes, including discounts, coupons and unlimited flight packages, which contributed to the V-shaped recovery of domestic air travel, while tour operators cut down prices and launched more attractive products.
Thanks to these efforts, the sector made a rapid recovery and the demand for domestic travel is soon approaching pre-pandemic levels.
FURTHER AFIELD
For prime travel destinations around the world, 2021 began with great hope as several countries rolled out robust vaccination programmes. With a significant number of local populations
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inoculated, destinations, ranging from Dubai to Seychelles and Mauritius, were able to promote their locales as COVID- safe. Many are now hopeful that they will soon be able to welcome high spending Chinese visitors back to their countries.
“According to recent research conducted in China, 45 percent of the survey participants revealed that they wanted to travel overseas once foreign destinations are open,” said Wu. However, these travellers are now prioritising safety and security above all other factors when it comes to shortlisting destinations.
“Safety and security are now the primary factors that Chinese travellers are considering when choosing a foreign destination, especially after the pandemic. A majority of Chinese people pay great attention to personal health and safety. Chinese visitors, therefore, prefer destinations that are perceived to be safe and secure.”
Other changes have also come to the fore in Chinese travellers’ habits following the pandemic. Wu revealed: “The trends of outbound travel from China are changing rapidly from group tours to fully independent travels; from
A recent study conducted by the local travel booking platform Trip. com revealed that travel recovery first occurred among millennial and Gen Z consumers in China since the pandemic has less of a health impact on them. According to its findings, the post-90 group (those who were born between 1990-99) accounted for five percent of travel during the May Labor Day holiday in 2020, a significant increase from 2019 levels during the same holiday period.
To target young consumers, the domestic travel industry has shifted its marketing focus to emerging social platforms and experimented with new content formats to appeal to this demographic.
Wu concluded: “The most effective strategy has proven to be continuity, which means, countries that maintained destination promotion to Chinese travellers on a continuous basis even during the COVID-19 pandemic via effective digital marketing solutions and Chinese social media have successfully retained strong interest among both the outbound travel trade and also millions of Chinese travellers in those destinations.”
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The domestic tourism sector made a rapid recovery in China and the demand for domestic travel is soon approaching prepandemic levels
visiting as many places during one trip to an in-depth travel experience.
“The demographic of Chinese travellers is also moving from elder retired consumers to the younger generation, most of whom prefer travelling independently. The pandemic has only accelerated such trends.”
1 Great Wall of China 2 & 3 Beijing 4 Yangtze River
