UN chief Antonio Guterres said during the opening speech of the 43rd session of the Human Rights Council that “The Covid-19 pandemic has created the biggest crisis since the Second World War.” He pointed out that it’s not the first calamity that humankind has had to address though and it will not be the last.
Indeed, the next big challenge ahead of us in 2020 will be to deal with the vast economic impacts of the global lockdown. The tourism industry, in particular, faces unprecedented challenges.
“Preparing for an era of post-pandemic travel is one of the greatest challenges to have confronted the international tourism industry. Our future and our very survival depend upon our willingness to adapt and our ability to change,” Hong Kong Tourism Board Chairman Pang Yiu-kai said during the forum, subscribed by over 4,000 tourism industry stakeholders.
“Based on early studies, consumers will prefer closer destinations, with more space on board planes, more comfortable hotels and more wellness itineraries,” Pang said.
Pang reckoned that restoring consumers’ confidence in terms of safety is crucial to regenerating demand for travel, and that requires the combined efforts of all stakeholders in the tourism industry.
Speaking at the first session on consumer trends, McKinsey & Company Partner Steve Saxon quoted the estimates of the United Nations’ World Tourism Organisation and warned that the crisis could lead to 1.1 billion less international tourist arrivals, 120 million global jobs at risk and US$1.2 trillion loss in export revenues from tourism.
In the Mainland, which topped the world's list in terms of outbound travel in 2019, Saxon saw signs of domestic recovery in the Mainland and the region’s growing consumer optimism, indicating huge potentials of domestic travel with an estimate of US$ 238 billion- dollar business. He added that travel in the Mainland is already coming back to around half of the previous levels.
The situation in Hong Kong is in line with global trends. Following Hong Kong’s decision to temporarily shut down the three border checkpoints, and a subsequent ban on passengers transiting through Hong Kong International Airport, tourist arrivals were down 99 per cent in March, year-on-year.
As Mainland tourists account for about 80 per cent of the city’s arrivals, Google’s Sector Lead, Travel & Vertical Search APAC Hermione Joye highlighted that Hong Kong was among the first affected by the pandemic, given the city’s proximity to Mainland as the epicentre of the outbreak.
However, she noted that, based on Google Consumer Surveys, a quarter of APAC consumers will look to travel domestically in the next six months and over half of them prefer beach and nature destinations. She also highlighted that 30 per cent of APAC consumers cited flexible booking policies as top considerations and over 20 per cent prioritised hygiene.
To capture this segment of consumers, Trip.com Group – Mainland’s largest online tour agency – has already started testing the waters by repackaging their offerings. Chief Executive Officer Jane Jie Sun cited offering flexible booking of high-quality products at a competitive price (up to 60 per cent discount) with free cancellation as a key strategy.
Leveraging video streaming also helps generate revenue, she said. Referencing Trip.com’s sales figure, a total of RMB 500 million in gross merchandise value (GMV) terms was generated from just 13 live streamings and she added that the current travel bookings have seen rebounds, amounting to 80 per cent of the pre-COVID level.
While the Covid-19 pandemic still lingers, international organisations are coming together to work with unprecedented speed to develop new travel protocols so that the industry can optimise its recovery efforts by rebuilding consumers’ confidence and ensuring industry alignment.
Last month the World Travel & Tourism Council (WTTC) launched the world’s first-ever global safety and hygiene stamp, which helps travellers to recognise the businesses and destinations worldwide with the implementation of the global protocols. The International Air Transport Association (IATA) also developed global guidelines to mitigate the risk COVID-19 transmission when travelling by air.
Speaking at the second session on evolving industry practices, WTTC’s President and CEO Gloria Guevara highlighted that such a coordinated approach within the industry is an effective way to replace any quarantine measures and to eliminate bans on non-essential international travel.
IATA's Director General and CEO Alexandre de Juniac cited a 15% decrease in the willingness of passengers to travel from March to June, based on recent research, and he stressed that restoring passengers' confidence is critical. To achieve that, it requires strong support from the government to align with the industry in implementing the global guidelines.
He said: "As some parts of the world begin to reopen their economies, I have no doubt that people will still want to travel. But adapting to the realities of COVID-19 and rebuilding people’s confidence is a challenge that must be met head-on with cooperation," calling for stronger collaboration among industry stakeholders.
Underlining what WTTC and IATA had presented, The Hong Kong and Shanghai Hotels, Limited’s Chief Operating Officer Peter Borer cautioned that the industry cannot afford the impacts of quarantine measures on global tourism at the expense of hundreds of millions of jobs lost.
“We urge governments to implement alternative public health preventive measures including global testing and contact tracing which scientific research suggests may be more effective than quarantine,” said Borer at the forum.
Despite the economic hit of the COVID-19, exhibitions and business events industry is adapting fast. Kai Hattendorf, Managing Director & CEO, the Global Association of the Exhibition Industry (UFI) said that the pandemic is accelerating trends that are shaping up a new model known as hybrid event, referring to incorporating online technologies into physical events.
However, he cautioned that monetising such an event model remains new to many industry players. “Clicks do not discuss deals and eyeballs don’t sign contracts,” he said, highlighting direct exchange and interaction among the participants as a key success factor to fully commercialise this new normal.
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