Saying that COVID-19 has been a disruptive force for the tourism sector is an understatement. The COVID-19 pandemic has unsettled many tourism businesses and destinations as the near-future is filled with uncertainty.
Do you want to address critical current challenges posed by Covid-19 and at the same time prepare for the long-term future?
The Tourism Foresight Process allows for short-, medium- and long-term strategy development. To support you in developing your strategy in the short term, I will provide you with a brief overview of the most relevant driving factors and, derived from these, four possible, general scenarios for the COVID-19 pandemic.
Driving factors of the effects
of COVID-19 on tourism
The future epidemiological development is the key driver impacting the tourism sector and is characterised by the spread of the virus and the severity of the disease. For example, two variants of the coronavirus, first identified in the UK and in South Africa appear to be more transmittable than the original. At the same time, mutations may also affect the severity of symptoms.
Equally important are the following medical advances in relation to the epidemiological development: the effectiveness of the vaccine, the effectiveness of treating COVID-19 symptoms (possibly leading to a reduced pressure on public health systems), improved testing capabilities for early detection of infections and our immune response to COVID-19.
In general, as our knowledge on SARS CoV 2 and COVID-19 increases, we will have a better understanding of the pandemic and of appropriate regulatory measures.
How governments react to the pandemic has a vital influence on the tourism sector. The level of strictness of the chosen containment measures and the geographic scale of these are key to the level of mobility offered to society. Will governments find a way for international cooperation or will each country/region have different regulations? Tracking capabilities are important for specific (e.g. isolation or quarantine) rather than extensive measures (e.g. general lockdown).
In addition to containment measures, there is also the possibility to implement safe travel systems (e.g. travel bubbles, digital health passports etc.) to allow travel despite a continuing COVID-19 threat.
Tourism businesses are being particularly affected by the containment regulations restricting mobility. Will governments provide financial support for struggling businesses that are essential for the tourism sector (e.g. airlines, tour operators)?
How will the rate of bankruptcies or a decrease in the level of services affect the wider tourism value chain?
Regulatory measures also have an economic impact on other economic sectors, with a likely effect on travel behaviour.
Of particular importance is the reaction of wider society. Will there be public trust in the vaccine, in save travel systems or in person-specific containment measures? Which customer segments will show a willingness to travel? Will containment measures, public trust (or lack thereof), safe travel systems lead to a shift in destination preferences or to a shift in the type of sought-after tourism experience?
Building the Scenarios
The impact and level of certainty is determined for each driving force, which is then plotted on an impact/uncertainty matrix. Two driving forces identified as having the biggest impact on the organisation as well as high levels of uncertainty are chosen as main building blocks for the development of the scenarios. The forces characterised as having high impact and high certainty are used as elements for each of the scenarios.
Scenario 1: Taking chances
The rate of new infections is rising, and most countries have regulatory measures in place reducing international mobility, such as quarantine for tourists from other countries. Yet people are taking advantage of lower numbers of international tourists to visit national attractions. More adventurous tourists are taking longer time off work to allow for quarantine measures in international destinations. Others are combining the requirement for remote work with holidays and are making the most of workation packages offered by many destinations to attract at least some international visitors.
However, those tourism businesses that have not been able to draw on sufficient reserves and that have not received sufficient financial support from governments have either gone bankrupt or have had to reduce their offerings. Particularly airlines have focussed on short-haul regional routes to the detriment of long-haul destinations except for direct flights from point to point. This reduced offer reduces the choice of destinations for the adventurous tourists to the destinations near the main hubs or to the destination of low-cost carriers which do not operate a hub and spoke model.
The epidemiological situation is severe and regulatory measures are in place in most countries to manage the pandemic. However, developments in biomedical research have led to rapid and effective testing for corona virus. Given this new test capabilities and regional variations in the rate of new infections, some governments are collaborating to provide safe travel systems and travellers with a vaccination (and a digital health passport) and a negative test result no older than 12 hours are allowed to visit specified countries within so-called travel bubbles. International and domestic travel is not possible for those segments of society that do not have access to the vaccination or the rapid test.
Scenario 2: Safe travel for some
Although many regulations have been lifted and safe travel systems are in place between many countries, consumer confidence in these measures is low and people stay mostly at home. Those people that are brave enough to travel visit less crowded, often nature-based, domestic destinations by car and engage in outdoor experiences in small groups that form a tight bubble to avoid potential infection in crowds.
The economic effects of the previous regulatory measures have reduced available personal financial resources for travel and leisure activities. While low trust in government measures and the uncertainties of the pandemic have resulted in a general reduction in consumer spending.
Despite some financial support from governments for tourism businesses, a lack of demand for international travel has had a severe impact on many tourism businesses. As a result, most airlines, tour operators and OTAs are reducing their services to consolidate their operations to the profitable sectors. Airlines have focussed on short-haul regional routes to the detriment of long-haul destinations except for direct flights from point to point further affecting tourism.
Scenario 3: Cautious domestic tourism
The epidemiological situation is serious as the roll-out of the vaccine is hampered by a lack of vaccine, cold storage facility and available staff. New variants of the virus have reduced the effectiveness of many vaccines. As a result, the rate of new infections is high in most countries. Governments have implemented strict regulatory measures including lockdowns and curfews. People are not allowed to travel more than 50km from their home for non-essential journeys. There is considerable uncertainty as to how the pandemic will develop and tourism is at a standstill with people abiding by the strict regulatory measures.