What Can Travel and Tourism Firms Do to Combat Coronavirus?
The travel and tourism industry has been the sector hardest hit by the effects of COVID-19. However, according to new research, the virus hasn’t dented consumers’ appetite for taking a vacation.
Global attempts to contain the spread of the coronavirus has seen countless countries close their borders, ground fleets, shutter hotels and even suspend rail services. Each of these steps will flatten the infection curve in the long run, but in the short term it is creating massive uncertainty in the travel, tourism and hospitality industry.
This uncertainty is being magnified by the fact that the virus is eradicating traditional customer behavior. Typical sentiment, brand perceptions and travel trends can no longer be applied to marketing or corporate strategies and this means many businesses in the sector are currently facing a two-pronged challenge.
How do American consumers feel about traveling?
It’s impossible to accurately forecast at what point in the coming months infection rates will have stabilized sufficiently for restrictions on international leisure travel to be lifted. However, it is possible to gauge consumer sentiment towards travel and if and how their attitudes to and appetite for vacationing have changed in recent months.
Research from GlobalWebIndex (GWI) published at the end of March shows that half of Americans have already had to rethink vacation plans because of containment measures and employment uncertainty.
When polled, 27% of U.S. consumers said they had voluntarily cancelled a vacation they’d already booked due to the COVID-19 pandemic and 18% had been forced to cancel their vacation plans.
Nevertheless, 54% of Americans approve of how airlines have handled the virus so far, and for the moment, 33% of U.S. consumers say they’re still going to use the money they had set aside for a vacation for an international vacation and 25% are considering using it to take a domestic vacation or day trips.
As for what would motivate Americans to book a vacation within the next 30 days, just 17% would consider making plans now and paying money if a travel insurance policy was available to cover the costs of disruption caused by the virus. Only 15% would be tempted by discounted flights and 13% by discounted accommodation.
However when the data is separated out so that it only includes Americans that would typically take a vacation abroad, the percentages are higher and reflect greater positivity.
In this cohort, 26% would be tempted to book a vacation in the coming weeks if coronavirus travel insurance was available, and 19% would be tempted by flight discounts.
Without the motivating factor of special offers or special insurance packages, 18% of Americans said they hope to resume travel activities within four-to-six months and a further 17% want to take a vacation within the next six-to-10 months.
Yet even with this desire to travel among Americans, particularly for those who want to explore foreign places, many of the world’s major airports are currently closed and most major airlines have put international flights on hold following government action.
One in 10 adults worldwide works in the travel, tourism and hospitality industry and as a result the sector is responsible for generating 10% of global GDP.
For example, for every week that the U.S. maintains its ban on travel to the country from Europe, its economy is losing $780 million. Over 850,000 Europeans fly to the U.S. every month and in doing so add $3.4 billion to America’s GDP.
The World Tourism Organization (UNWTO) forecasts international tourist arrivals will be down by as much as 30% compared to 2019 figures. That translates into a decline in receipts of up to $450 billion.
So what can companies in the sector do in the short term to protect their brands and continue to attract customers in the long term?
1. It’s not the time for competition
With restrictions still in place and with consumers resigned to putting their leisure activities on hold, trying to attract business through competitive pricing is unlikely to have the desired impact. Instead, examine the parts of the business or the regions around the world where you operate that aren’t impacted by the virus and focus efforts there instead. The UNWTO estimates it could take over a year for the industry to start recuperating costs and if you have slashed prices in search of customers, it will take your organization much longer to bounce back due to lower margins.
2. Show your compassion
A number of businesses within the industry from disruptive startups like Lyft and Airbnb to established hotel chains are using their capabilities and their capacity to help in the fight against the virus. This ranges from offering transport and accommodation for healthcare professionals to the delivery and storage of medical equipment. Likewise a number of airline staff have volunteered their services free of charge for working on repatriation flights, bringing people stranded in foreign countries back home to safety.
Not all companies in the sector will have the facilities to make such grand gestures, but every visible step a brand in this industry can take to help the cause now, will be rewarded with greater positive brand recognition in the future.
3. Articulate your expertise
With so many competing news outlets, American consumers are suffering from coronavirus information overload. That’s because the information isn’t in the context of the individual’s circumstances. For example, according to GWI research, 15% of Americans that enjoy international vacations said they’d consider booking a vacation within the next four weeks if they could speak to a travel specialist who could inform them about safe and effective approaches to travel. Here is a huge opportunity to start engaging with existing and potential customers by answering their most pressing questions and through sharing the depth of your expertise.
4. Share your costs
A sensible step every organization will take in this situation is to look where it can save money. However, by finding a partner who can work alongside you to reduce costs while optimizing services and processes, you’ll have a short-term and long-term return on investment. This is particularly true in the case of business process outsourcing where leading organizations have an inside out knowledge of the travel and tourism sector and can bring best practices and continuous improvement to bear on your existing operations, whether back office, contact center or even employee training.
5. Increase your clarity
Being clear with customers will give them the confidence they need to move along your sales funnel. They don’t want to be surprised by small print or restrictions after making a purchase or a booking. Therefore even doing something as comparatively simple as moving your terms and conditions to a prominent place on the website homepage will pay dividends. For the same reason it is worth considering investing in self-service tools. Consumers spend a lot of time researching destinations and offers before booking a vacation. A user community or a well-designed and comprehensive knowledge base will make certain that you become a touchpoint during the research and consideration stage while also providing you with valuable insights into what types of vacations people are looking for and what their most common concerns and questions are.