Blog
Blog
Provide yourself with essential knowledge

Tourism after COVID-19

14/07/2020

It is still too early to estimate the global impact of COVID-19 on the European economy and, particularly, in the Tourism sector. The United Nations World Tourism Organization estimates, for 2020, a 20%-30%, of declines on arrivals, comparing to 2019. The Organisation for Economic Co-operation and Development is even more pessimist, expecting a 45%-70% decline in the international tourism economy in 2020. In terms of human capital , the World Travel and Tourism Council (WTTC) predicts that the travel and tourism market could lose 75 million jobs worldwide and 6.4 million jobs in the EU this year. This translates, in numbers, to a loss of €270-€407 billion in international
tourism receipts.

The member states are working to rescue Europe’s tourism industry, which accounts for 10% of EU economic output – and even more in Italy, Spain, Croatia and Greece.The pandemic is now in controlled stage in the majority of the European countries, so plans to reopen borders between  EU countries with “similar overall risk profiles” are being implemented. In this scenario, how can tourism companies prepare for people starting to travel again?

Security and health first:

From now on, health could be embedded in every aspect of travel.Strict cleaning protocols must be put in place in all the areas of the sector, from exchanging travel documents, to border control, to housekeeping, room service, meals and tours. The touchless travel and service process will become the new normal, from airport curbside to hotel check-in and events participation. At the same time, world leaders are preparing industry guidelines for passenger health screening to become standardized in all continents. On a more local perspective, some EU countries are creating “safe travel tourism corridors” between them, in bilateral agreements. Take Spain, that knowing that the islands are the destination of choice for the Germans, has opened direct flights with Germany, to safely “bring” Germans directly there.

This, of course, will implicate a major investment in technology systems, AI (artificial intelligence), robotics, business intelligence and privacy health laws.

New “isolated”, local offers:

When travel does begin again, experts expect that the majority of people will start with road trips not too far from home. The Industry sector should invest in local solutions with small beds-capability, because people feel safer in smaller, controlled hospitality units. This means responding to the tendency to offer niche rather than mass accommodations and attractions. By land and water mobility offers (boat our vans rental), for instance, are seen as good alternative experiences for European travelers and can work as a positive differentiation of the services offered by tourism companies.

Digital Transformation:

Personalized digital communication is a powerful tool for tourism companies. For those who have not yet taken digital marketing to is full potential it is mandatory to start. 24/24 hours feedback, personalized PPC (pay per click) campaigns (search and social media), influencers recommendations and high-quality content (videos and AI) focused on the safety and fun of the experience are communication assets to be explored. Internally it is important to prepare team to work in this new “digitalized” era.

Tax and financial sustainability:

To respond to the decline on demand and to a scenario of slow recovery, tourism companies should focus on tax optimization, reduction cost plans, debt re-engineering and compliance with the conditions of European emergency funds to invest in new cleaning and security protocols and digital communication.

Auren Portugal as a multidisciplinary team of management and tax consultants’ experts in the tourism sector. Please let us know how we can help your success.

Vitória Pinhão from Auren Portugal Consultancy Partner