The keys to rebuilding the tourism sector after the crisis

Looking beyond day-to-day management, the travel business should see a big picture opportunity in these tough times to rethink the very concept of tourism

IESE Business School
Published: Jun 24, 2020 09:46:16 AM IST
Updated: Jun 24, 2020 09:51:30 AM IST

tourismImage: Jorge Silva / Reuters

While the coronavirus pandemic has wreaked economic havoc across nearly every sector and country on earth, tourism stands out as particularly vulnerable.

“The pandemic’s impact on tourism has been and will continue to be brutal,” IESE Business School professor Philip Moscoso said in the recent online session organized by IESE with Jordi Mestre, head of Selenta Hospitality Group, and Raúl González, CEO of Barceló Hotel Group.

With 10 years of continuous growth ground to a halt and 100 million jobs lost or at risk, industry leaders are grappling with the damage already done, and making plans for a gradual return to a post-crisis order. And they are asking themselves whether there’s any room for optimism in a sector so closely affiliated with big crowds of people in small spaces.

Here, some of their conclusions so far, many of which apply to other sectors:

Coordination will be fundamental to steadying the travel sector, particularly coordination between governments and industry leaders. The crisis threatens freedoms at the very core of travel – of mobility, of safe and efficient transportation, of gathering in public places. Skirmishes in the form of border and travel restrictions have already broken out between national governments, and with respect to immigration have in some cases been politicized.

“There are two key elements to keep in mind while considering the duration of the crisis’ impact on tourism. One involves government actions going forward. The other is the attitude of the people, particularly when it comes to optimism and fear,” said Barceló’s González. “Without mobility, the freedom of movement, international travel doesn’t exist.”

As the worst of the health emergency subsides across certain regions, agreements of the type between Australia and New Zealand (which have created a “travel bubble” across their borders) will have to be forged. When it comes to local civic engagement, all parties need to work closely together. Travel and hospitality associations, many of which have felt sidelined in  planning measures like restaurant capacity reductions, can’t afford to sit these conversations out.

New health controls are inevitable for at least the short- and medium-term future. This applies to the commercial airline and other transportation sectors as well as the hospitality business. The efficacy of taking customers’ temperatures in restaurants, hotels and other venues is a matter of some debate, but could allay clients’ fears. Distancing procedures will be important and quite tricky to figure out.

Hospitality business managers and employees will have to remain flexible and receptive while crafting these measures, and communicate them clearly and calmly to customers.

Agility is also crucial to adapting workplaces to the circumstances. In fact, due to the personal contact they entail, travel and hospitality businesses have faced, and will continue to confront, difficulties beyond those of other industries when it comes to teleworking. When considering work models, a company’s target customer must be front and center in mind.

Businesses targeting luxury customers may have a tougher time moving to a digital work model. These customers typically expect a larger degree of personal attention and care than budget travelers. And that type of service is difficult to move online.

Still, travel industry CEOs (especially those in charge of large brands) see potential in going digital for certain operations as it facilitates better collaboration between employees in different countries and in different departments.

Looking beyond day-to-day management, the travel business should see a big picture opportunity in these tough times to rethink the very concept of tourism. Concern has grown over the years about the adverse effects that “over-tourism” was having on certain popular destinations.

“Looking beyond the economic damage done, we can envision a new road forward. And that may involve moving from ‘quantity tourism’ to ‘quality tourism.’ This move has been coming for awhile, with concerns about over-tourism and massification predating the pandemic. We may have a chance to focus on and attract a new client, one interested in culture and brought here on business,” said Mestre.

With governments lifting some restrictions, now is the time for slowly rebuilding. Says Moscoso: “This is a sector that’s survived many crises over the years. And a combination of global coordination, new health measures and government support can mitigate the damage. The tourism industry and its leaders must focus on rebuilding.”

Click here to see Forbes India's comprehensive coverage on the Covid-19 situation and its impact on life, business and the economy​

[This article has been reproduced with permission from IESE Business School. www.iese.edu/ Views expressed are personal.]

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