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COVID-19: Is The Tourism Industry At A Crossroads?

By 21/06/2020No Comments

Despite the existential challenges facing numerous businesses and the enormous uncertainties and personal anxieties experienced by large sections of our society, now may be a good time to think about the future. The coronavirus pandemic has knocked us off our feet, forcing us to slow down and making us spectators in our own lives. But amidst all our concerns about the present, we also have a few moments to reflect on the future.

Admittedly, the coronavirus epidemic and its economic impact have been an enormous shock to the system, especially since we have no relevant business experience to draw from. But although we cannot really prepare for “black swan” events of this kind, we can still learn from them. They serve as stress tests, exposing weaknesses and criticalities of systems and organisations, as well as our tendency to underestimate or even completely ignore risks. In the tourism industry, for example, the pandemic has revealed a widespread lack of crisis resilience and strategic foresight, while business risk management is rarely institutionalised. Amid the current threat of insolvency in the tourism industry, the widespread closure of pubs and travel agencies and the high failure rate of hospitality concepts, the lesson for us as an industry is that we must address long-term trends and changes in the external and internal corporate environment in a more informed, systematic and strategic manner. Thomas Willms, CEO of Deutsche Hospitality, recently commented: “Despite all the short-term challenges, never before has it been so important to take a medium to long-term view.”

Tourism companies have worked hard in the past to improve, becoming bigger, faster, more productive and increasingly efficient at what they do. And as we all know, efficiency means “doing things right”. It is one of the two key management skills that companies and entrepreneurs need to master. The other factor that distinguishes excellent companies from less successful ones is effectiveness, in other words the ability to “do the right thing”. But of course, the “right thing” always depends on the context and the goals one sets oneself. So what is the right thing for the tourism industry and its future? One very important question we must ask ourselves is what is or should be of value to us as human beings, tourists, guests, entrepreneurs or tourism professionals, both now and in the future. Do we really want to go straight back to the pre-pandemic world? Perhaps not, given that we were clearly unhappy with the way things were going, as demonstrated in particular by the younger generation with the climate change protests. When the COVID-19 pandemic is over – whenever that maybe – do we really want to pick up again where we left off? Do we want to return to business as usual and our selective and often unambitious efforts to address issues such as overtourism, climate change, flight shame and the negative image of the hospitality industry? Or would it be better to use this “zero hour” to begin discussing a truly comprehensive, sustainable, digital and future-proof agenda for the world of tourism?

But what might such an agenda look like? Should we continue to pursue the goal of unlimited growth or would it be better to abandon our current growth model entirely? Should we focus on quantity or quality, on sustainability or cut-throat pricing, on restricting consumption and travel or continuing to offer unlimited freedom to travel whenever, however and wherever we want? Or should we instead reassess the trade-offs between individualism, solidarity and social responsibility, between our own desires and the common good that we as Homo economicus and Homo politicus have to make all the time? Perhaps we need to think about tourism in terms of the concept of sacrifice, just as we do in countless situations in our lives where we relinquish something in exchange for something else, usually of greater value. When we get married we leave behind us our lives as singles, but in return we gain a partner whom we love and trust. When we have children we also sacrifice a great deal of freedom, but in exchange we find joy and fulfilment. If we cut back on our working hours, we lose out financially but gain in terms of personal freedom and quality of life. In the field of health, we can often benefit from giving things up. Avoiding poor lifestyle choices, such as alcohol and medication abuse, smoking, stress and lack of exercise, usually brings benefits in terms of life expectancy and physical well-being. If we combine this with a conscious effort to adopt a healthier lifestyle (e.g. regular exercise, a balanced diet, relaxation and a slower pace of life), we will find that we change our perceptions about the things that are really important to us.

This applies equally to the field of tourism and is something we must think about very seriously if we want to avoid undermining the foundations and assets of our industry over the coming decades. It is increasingly clear that the tourism industry has reached a crossroads and that we are faced with a choice. More than ever before, we must find a compromise between many conflicting interests: between tourists and locals, between recreational and living spaces, between nature and consumption, between profitability and sustainability, to mention just a few. To ensure that tourism continues to be socially acceptable and sustainable in the future, we need to stop thinking in terms of technical parameters such as “carrying capacity” and “maximum capacity” and instead work to establish a new holistic tourism-life balance that takes account of all the positive and negative effects of tourism. Clearly, just as in the case of a chronic illness, failure to act now will result in the need for even more invasive and painful treatment in the not too distant future. And as we all know, every decision we fail to make today will limit our options in the future.

Personally, I would like to see a reconciliation between value creation, quantity and quality in tourism through greater awareness of what we do and how we generate revenue. On the supply side, this means that tourism businesses should not repeat the mistake they have often made in the past of attempting to weather the crisis by cutting prices, but should instead invest in the future viability of their businesses by improving the quality and sustainability of their services. I am convinced that companies will emerge stronger from the crisis if they succeed in using their time and resources wisely and prepare for the post-crisis period in the best possible way. By taking an honest look at our own tourism businesses or destinations, we can now put structures, processes, services and skills to the test and correct the mistakes and failings of the past. I believe the present time also offers a unique opportunity for tourism to achieve a higher and more sustainable level of performance as an industry, thus benefiting all internal and external stakeholders (customers, employees, investors, partners, etc.).

On the demand side, I would like to see all of us in our role as customers and guests display greater awareness and attention to the nature, location and quality of the goods and services we purchase. It is often said that customers know the price of everything but the value of nothing, and indeed very few holidaymakers and guests show much concern as to whether their travel, food or holiday activities are truly sustainable. But it is high time that we as consumers begin to take responsibility for our choices. If we really want to, we can close the attitude-behaviour gap that has existed for decades between our concerns about sustainability and our actions as consumer, even without making travel accessible to only a privileged few. Countless studies have shown that tourists in almost all market segments attach a great deal of importance to finding unspoiled nature, authentic experiences and local culture. But we must also be prepared to pay prices that reflect this environmental and social sustainability. If we are able to do this, we may also feel more justified about taking a weekend city-trip or a second or third holiday. As part of this new consumer awareness, we as tourists or guests should focus on value rather than price, thereby demonstrating through our actual purchasing behavior our appreciation for more sustainable tourism products and services.

Here and now is the perfect time to turn away from a […] purely quantitative approach, while developing a new awareness of price and performance, of value creation, quality and sustainability, thus outlining the blueprint for a different, more promising growth paradigm in the tourism industry. We should embrace this window of opportunity to shape the future of tourism. Together, tourism professionals and tourists – hosts and guests!


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