29 March, 2021

The future of tourism with and after SARS-CoV-2: Situation assessment and tactical as well as strategic considerations

The Research Center for Tourism and Transport at the University of St. Gallen (which I lead) - together with colleagues from practice and academia - has made a third situation assessment on the topic of "Tourism in Times of Pandemic". The nearly thirty theses (see below) presented there allow only one conclusion: The transition period to normality, which will hopefully begin soon, will be bumpy and take a long time, but it will also open up many new opportunities. But there will be a New Normal in which tourism once again becomes an international growth factor, because travel is a basic need.

You can find this report (in German!) at
https://imp.unisg.ch/de/imp-publikationen/2021/tourismusreport-iii.


Theses:

(1) The positive image of the alpine "Leisure" Tourism cannot hide the depressing image of of urban "commercial" tourism.

(2) The pandemic will not simply end. We need to think in terms of a flexible three-phase model.

(3) We must probably be prepared for a longer period of  with hopefully ever decreasing volatility. 

(4) Good framework conditions are central to perseverance.

(5) Road and rail before air. Individual tourists before group tourists.

(6) No stable mobility possibilities = no international visitor flows.

(7) We now know what domestic tourism looks like.

(8)  The country has new guests.

(9) Summer 2021 will probably be worse than summer 2020. 

(10) The best case for "Incoming" and "Outgoing" means  means the worst case for "Domestic".

(11) Different travel careers and cultures will lead to different  different tourism developments in the future. 

(12) The shock has turned the self-evident into the special. Do we see a sign of realignment of values here?

(13) Guests have booked at very short notice. 

Will they want to make such flexible decisions in the future as well?

(14) The average length of stay has increased. Is this a sign of essentialization in travel?

(15) The demand of the Swiss for more space, self-sufficiency and physical activities has increased. Is this an acceleration of a trend that has already been going on for some time?

(16) Tourist co-creations are becoming more digital and sustainable.

(17) Travel may become more land-based and less air-based.

(18) Making operations more flexible against the backdrop of of liquidity protection is central.

(19)  Will management of scarcity and visitor control become a new central "discipline"?

(20) Investments should first and foremost improve cost efficiency.

(21) The foundations must be laid for systematic and margin internalizing supply flexibilization.

(22) Flexibilization and efficiency enhancements in production are also necessary in the long term.

(23) Capital structures must be brought back into balance and alternatives to bank financing must be created.

(24) Appreciation must be transformed into value creation. 

(25) Sustainability in business models continues to gain importance. 

(26) Business and MICE tourism must reinvent themselves.

(27) "Brain" remains the most important scarce resource alongside financing. 

(28) The state will (have to) continue to play an active role.


17 February, 2021

Tourism demand in times of/ after SARS-CoV2: What does one have to observe?

 Under the current volatile conditions, the extent of tourism demand this year is difficult to estimate. However, the analysis of the state of various indicators provides at least some degree of orientation.

The "environment" for tourism is currently very volatile due to the dynamics surrounding SARS-CoV-2. Therefore, it is also difficult to estimate the expected demand in the warm season of this year. But there are a number of factors, observation of which helps to at least gauge the direction of development. 

From the perspective of the observer in a given country or region, those factors are (in parentheses: extreme values/ expressions of continua, with the unfavorable mentioned first):

  • Vaccination rate in the selected foreign country (low - high)
  • Incidence of ongoing infection rate in the selected foreign country (high - low)
  • Vaccination rate in the selected domestic country (low - high)
  • Incidence of ongoing infection rate in selected domestic country (high - low)
  • Personal immunization status of traveling individuals (not vaccinated - vaccinated)
  • Level of immunization of SARS-CoV2 vaccination (individual protection - germicidal/ sterilizing)
  • Cure prospects of persons seriously ill with COVID-19 (bad - good)
  • Economic prospects in the selected foreign country (negative - positive)
  • Economic perspectives in the selected domestic country (negative - positive)
  • Entry and return conditions in the selected foreign country (constrained - unconstrained)
  • Entry and return conditions in the selected domestic country (constrained - unconstrained)
  • Accessibility by air between the selected countries (relations) (bad - good)
  • Psychological wellbeing of people (bad - good)
  • Dynamics of virus mutations (high - low)

Depending on the state of these criteria, they have either a neutral effect (=0), a positive effect on  visitor flows , i.e. they promote demand (+1), or they have a negative effect and dampen demand (-1). Those flows are (1) domestic within a selected country, (2) inbound into a selected country, and (3) outbound to a selected country. A table with those effects is presented below. When reading and interpreting this table, take a perspective from your own country or region.



Depending upon above described possible configurations, outcomes of tourism demand will be quite different.  A state of a factor which increases risks or inconveniences associated to travel will have a dampening effect - and vice versa with a state of a factor which decreases risks and minimizes inconveniences. Time will tell what states and outcome will finally materialize. Lets hope for the best.
















10 January, 2021

Mobility of the future: Euphoria will give way to disillusionment sooner or later

Against the backdrop of technological developments, we can dream of a supposedly better future for mobility. However, if we consider the "big picture" and ask ourselves where scarcity could prevail in the future, euphoria quickly gives way to disillusionment. This article presents a chain of arguments that lead to a very cautious assessment of the future of mobility.

A large number of studies paint a picture of the future of mobility, which is characterized by a greater diversity of mobility tools (available means of transport and forms of access, e.g. a car or a general subscription), high proportions of sharing business models (increasingly fewer mobility tools are owned by those who use them; e.g. mobility car sharing) and a networking of different modes of transport, with MaaS (mobility as a service) as the ultimate business model. Many players in this happening therefore dream of being at least an intermediary with their own platform and thus quasi "asset-light" at the center of future mobility and transport systems and their networks. And the manufacturers of various mobility tools (namely the carmakers) are counting on being able to compensate for future slumps in sales with the aforementioned "sharing" offerings. Automated driving also offers productivity potential, since humans are no longer needed to operate these vehicles. Last but not least, the owners of transport infrastructures assume that these infrastructures can be operated even more productively in the future. So we are all on our way to a promising mobility future.

Really? Below I allow myself to make a few reflections that shake this ideal image.