09 April, 2020

How and when will tourism recover during and after the SARS-CoV-2 pandemic?

We are currently in a medical, economic and psychological crisis. On the one hand, this crisis could awaken new or dormant needs, but on the other hand some of these needs - for the moment - will only be met to a limited extent. The way out of the crisis will therefore be a step-by-step one, and in fulfillment of step-specific needs.

What we are currently experiencing is indeed a caesura; medically, psychologically, and economically. Even if the virus is "defeated" and the medical crisis is long gone, the economic crisis will leave long-term traces, including in our mental health. In an interview with Bloomberg on 22 March, clinical psychologist Ilene Green speaks of a kind of post-traumatic stress disorder.

Four specific needs may arise as a direct consequence of this shock.

According to the studies of Richard Dawkins or Geoffrey Crouch, for instance, it can be assumed that people have the need for roaming and discovery in their genes. Most people will happily succumb to this urge as soon as it is allowed and possible again, and perhaps even make up for travel plans originally canceled for reasons of this pandemic.

Then, concerns about hygiene and cleanliness, and perhaps also about safety, i.e. "must-haves" that have so far received little attention, are likely to gain in importance. About these must-haves attributes one is usually only aware of when they are not sufficiently available.

Third, and after hundreds of millions of people have been arrested together with others in the same household and had to endure several weeks of associated stress, relaxation mechanisms (e.g. in the form of temporary distance) will be needed. After a lot of forced "we", it will also need a voluntary "I" (and maybe also a "we" together with others than household members).

Forth, past physical and social isolation will accelerate the desire for shared experiences. This all the more so as people may be tired of digitization and are happy to escape the very high degree of indirect and virtual communication and to cultivate the exchange with others again directly and especially no longer always just "edited" (such as on social media).

We can assume that travel will initially be possible in one's own country or territory (resulting in a revitalization of domestic tourism), in a second phase within a group of countries or territories, and only in a final phase will it be possible and feasible to travel intercontinental and with few restrictions. Here are the considerations for the above assumptions:
  1. Borders are likely to remain open only to a limited extent, at least in the short term, and/or crossing the border is only allowed for specific purposes (holidays are unlikely to be included; any country may live on internal tourism on a limited and temporary basis)
  2. In general, there is uncertainty about the future. As a result of this uncertainty, travel decisions tend to be made at short notice or even spontaneously, which means that only close destinations are visited at short notice. Look out for changes in hotel occupancy rates induced by domestic tourism.
  3. The deep recession and limited income prospects (in the worst case due to unemployment, which is now increasing in many countries) are dampening the demand for tourism in general and for long lasting and long distance travel in particular. 
  4. It must be assumed that after this lock-down, leaves of absence will be hard to get - even during peak holiday periods. When companies go back to work (if the economic situation permits), they will hardly tolerate production restrictions due to employee absences.
  5. Potential quarantine regulations when entering countries (often 14 days) make "normal" travel impossible. Only long-term stays justify the burden of such quarantine.
  6. The resumption of flight connections will take time. If social distancing continues to apply, capacities in airports and on board aircraft may be limited. The higher costs involved will have a dampening effect on demand.

In the medium and long term, wishes for traditional international or intercontinental travel will hardly change due to the crisis: in most cases it will still be about discovering new things. This is different in the short-term perspective, where previously discussed needs are likely to gain in importance, at least temporarily.

Providers should therefore use the often poorly differentiated core tourist service only as a resource for higher quality, differentiating offers: A hygienic carefree package (perhaps even certified at a reasonable price) for the medically worried customers, emotional cement for temporarily physically torn relationships, cooling and regeneration room for relationships under pressure (and contribution against a corona-induced divorce rate), playful learning and supplementary programs for children after homeschooling, playful physical compensation program to overcome the consequences of arrest, etc. Idea generation and implementation require cooperation with people from outside of tourism, such as doctors, psychologists, teachers, service designers, etc. But it is precisely this thinking beyond core tourism services that generates innovation, differentiation and thus demand and willingness to pay.

Tourism can contribute to the healing of the corona shock - and in doing so partially heal themselves - with a lot of empathy for the partially changed needs of the guests. And if the governments then help to relieve the balance sheets burdened with corona debt with a negative tax or tax credit, all the better. Stay well!


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