In the first of Tourism Update’s guest author segments, Stuart Rice – founder of AfriVenture, a tour operator offering experiential small group tours across Southern and East Africa – provides some food for thought on Developing a Post-COVID-19 Tourism Strategy.
Since March this year, we have all had to sit back and watch as Africa closed its doors to the world.
Months later, COVID-19 is not over, in fact it has just begun. Whilst other industries are already talking about the ‘new norm’, we as tourism entities must accept being the first out, and due to the nature of our businesses, the last in.
Tourism will bounce back, how rapidly is another question. It is easy to have a perceived ‘rapid bounce back’ when you are coming off a zero base. In real revenue terms, it potentially could take many years until we see pre-COVID levels.
As business owners and management, we all plan for both minor and major catastrophes, but COVID-19 is a different beast; you cannot plan for a total shutdown.
Although times are uncertain and our fate lies in government hands, we cannot be complacent. One should maintain an adaptive rolling strategy and continuous scenario planning to deal with the everchanging variables.
Below, I have given some new norms we may face in African tourism. These outcomes are based on the recent opening of countries, consensus in the industry and my own thoughts and predictions.
N.B. In my predictions I have not included a timely cure or vaccine. The if and when of this is out of our control and I will therefore only focus on what is within our control.
The New Norms
- Single destination travel
Single country travel will mean easier logistics, fewer border controls and less risk of quarantine (both in origin and destination). African countries that have a more diverse tourism offering and serve as a ‘one stop shop’ are likely to be more appealing due to the above risks.
- Fewer tourists above 60 years of age
This will be the hardest hit demographic. Whether it be 1% or 75%, the tourism industry will lose business from this age group. This demographic largely represents higher disposable incomes and could pose a substantial problem for high-end establishments and operators.
- Fewer flights and greater logistical issues
For airlines to be economically viable in the current supressed demand, flights will be restricted to selected profitable destinations and on fewer days. These limited and inconvenient flights will put additional pressure on scheduled tour departures and on fixed tour itineraries.
Even if traveller demand does return in sizeable volumes, airline liquidations and slow reintroduction of flights will mean fewer inbound flights. This becomes a limiting factor of tourist arrivals into Africa.
The likelihood of flight cancellations will be much greater in the wake of reopening international passenger flights. These inconveniences may leave many guests stranded, delayed, and struggling to obtain an alternative booking.
On a positive note, we could see very reasonable flight prices on mainstream routes as seen in the recent reopening of many countries around the world, as well as following the trends after previous financial crises and 9/11. Airlines will likely offer low prices to gain trust and business traction.
For health and safety reasons, travellers will be more inclined to choose countries with direct flights, fewer airport layovers and use only reputable airlines.
- Sanitary environment and screening
Tourists are nervous to travel. If they do take the plunge, they are likely to choose the safest travel arrangement in the same price bracket. Likewise, countries that emphasise the best COVID sanitation and screening policies will generally attract more tourists.
- Last-minute bookings
This is an interesting one. Previously last-minute bookings were for accommodation, car rentals and day trips. However, due to the uncertain border controls and quarantines, we will likely see a tendency toward last-minute bookings, even for long-haul travel arrangements.
- Mixed group travel
Mixed tours might see a tough time gaining traction initially as they juggle guests’ COVID safety perceptions. The younger low-risk generations are more inclined to bounce back in this travel arrangement. As for mixed group travel, there will be a high expectation of safety protocols, rapid screening, and a tendency to smaller group sizes.
- Less is more
Accommodation and tour operators will have to satisfy clients that the number of guests, staff and general interactions will be kept to a minimum. Small lodging and tours are generally perceived as safer due to less contact with other guests and staff. This will be especially apparent for the older generations.
- Travellers will favour low-risk countries
- COVID-19 countrywide cases
The more cases a country has per capita, the less likely people will travel to that destination. If there is a COVID spike, we will see many cancellations and slow forward bookings to this destination.
- Potential quarantines
If there is the slightest risk of quarantine (home or abroad), guests will unlikely travel to the chosen destination.
- Local medical facilities
Travellers will consider the general country-specific handling of COVID and medical facilities in a country.
- Price sensitivity due to global economic crisis
Global economic crisis, job losses and further uncertainties will mean many travellers will have less disposable income. Travellers, therefore, will be inclined to shop around for the best deals (and there will be many!).
Pricing strategically will become crucial and involve closely monitoring competitors. I am all for behavioural economics of not dropping prices and ‘sticking to your guns’, however in an economic crisis like this, the high-value pricing model may not hold up if your direct competitor with the same value proposition drops prices dramatically. Tourists will take advantage of the specials and loyalty may be put on a back burner in uncertain times like these.
In the next few months, if not years, we will likely see aggressive pricing strategies in major tourism hubs where oversupply and under-demand will create a fight for the small visitor base. This includes the likes of the Greater Kruger area, Cape Town, Victoria Falls, Zanzibar and so on.
Many African countries have seen their exchange rates weaken due to COVID, which in turn makes Africa a more attractive destination; however, offerings denominated in foreign currency (e.g. USD) means they will be subject to global competitiveness.
- Business travel will decrease
Whether big or small, we will see a decrease in business travel. The sudden shift to online meetings and digital conferences has proved to be effective, efficient and economical. This overall success along with many companies’ continual financial struggles will have an immense impact on business travel.
- Flexible payments, cancellation policies and business continuity
This goes for all tourism entities across the value chain. Companies that can satisfy guests that they are liquid and can weather the financial storm, will attract more forward bookings. Guests will not want to put money into borderline bankrupt businesses. Due to the general travel uncertainties, guests will also look for flexible cancellation and amendment policies when making their bookings.
- Exclusive private travel
This largely applies to the older generation of travellers. Due to safety concerns, they, more than ever, will seek private tours, private guides, private lodging, exclusive activities, and even private planes for the full extent of their travel arrangement. Fewer contact points, lower infection risk. This is a price versus safety consideration and will be appealing to high-end clientele.
In anticipation of the return of tourism, I hope the above points have created some food for thought.
Africa has a long road ahead of it to get back to pre-COVID-19 levels. Pricing, safety, and logistics will be large factors in the fast tracking of its recovery.
Whilst we all battle post-COVID-19 short-term strategies, we must not forget the tourism megatrends that are shaping the industry. Sustainability, digital advancement and being responsible are becoming of a greater significance than ever before.
Let us take COVID-19 as a learning curve and keep our tourism doors open to the world in the light of an ever-changing world.