There’s no question that times are tough for the travel industry. The COVID-19 pandemic has resulted in national lockdowns and travel restrictions, forcing holidaymakers to cancel their flights and hotel bookings, and business travellers to move their meetings onto Zoom.
These limitations have hit the travel industry hard. 2020 has seen an unprecedented decline in air traffic, with scheduled flights down nearly 60% from this same time last year. In the UK, hotel bookings have plummeted by 67%. Due to the pandemic, experts predict that the global travel and tourism industry could lose approximately 75 million jobs in 2020, with the Asia Pacific region and Europe being the hardest hit.
All of this doom and gloom begs the question: will the travel industry bounce back after COVID-19? Fortunately, we’ve got some good news. Our answer is yes, the industry will recover — and here’s how.
An industry that’s built to last
Although things might be bad now for travel brands, they won’t stay this way forever. The broad ‘travel and tourism industry’ encompasses many service sectors and, in total, accounts for approximately 10% of the world’s GDP. Countless people, governments, and businesses rely on the industry’s continued existence.
Of course, we don’t know when our current crisis will end, but it will eventually. And if there’s anything we can learn from the recent past, it’s that the travel industry always recovers from disasters and emerges on the other side more resilient and innovative than ever before. Travel is not only economically significant, but it fulfils a very human urge to get out, connect and explore the world. It’s in everyone’s interest for the industry to bounce back.
Learning from the past
When it comes to downturns, history can give us some hope. As a result of the 2008 financial crisis, for instance, the travel industry suffered immensely. However, as the crisis eased, consumers began to embrace digital marketplaces and took to tech to start booking their own holidays. Online marketplaces, aggregators and DIY travel providers such as Airbnb became the new norm, opening up a host of new options and destinations for consumers.
As social media use increased, influencers drew mass attention to previously under-explored areas, providing opportunities for brands to market unique package holidays. Global development led to the growth of a new middle class in countries such as China, India, and Brazil, vastly expanding the overall marketplace and demand for travel products.
‘Staycations’ also became more popular as past crises such as swine flu and 9/11 made people wary of travelling abroad. More opportunities for exciting experiences closer to home became available, and this is sure to become even more popular after current lockdown restrictions ease up, with consumers demanding more day trips in their own region and packages for weekend-long city breaks.
In short, history shows us that once it’s safe to do so, people will want to travel again. And they’ll be hungry for new, innovative ways to see the world. Remember, after restrictions are lifted, there’s likely to be pent-up demand — and as a travel brand, you’ll want to be ready to meet this demand with ample supply.
Bouncing back by capitalising on trends
Judging by history, we can all be reasonably confident that industry recovery will happen. But there’s still a hard truth in all of this: not all brands will survive this crisis. Although government support is available to many businesses, financial relief alone might not be enough to keep a brand afloat.
To make it out the other side, brands must remain calm, focus on local travel, minimise spending, get creative with their offerings and encourage customers to postpone instead of cancel bookings. Ultimately, surviving this downturn means being savvy with strategy and approaching all decisions from both a short-term and long-term perspective.
For the smart brands that do survive this period, the best way to bounce back into action and meet the pent-up demand is by capitalising on ongoing trends. To do this effectively, travel brands will need to invest in solutions that will help them survive in the present and thrive in the future. Let’s take a look at just a few of the trends that will drive a brand’s continued success:
Personalisation of marketing & customer relationships
Online travel customers are savvier than ever. What’s the key to winning over these savvy customers? Relevancy. And how can you achieve relevancy? Personalisation.
You probably already know that personalisation of marketing and customer relationships is essential to a brand’s success now, and it’s likely to be even more essential in the future. After all, almost 80% of consumers say that personalisation increases their purchase intent, and 88% say that personalised content makes them think more favourably of a brand. However, only 22% of consumers report being satisfied by the levels of personalisation brands offer. This shortfall presents a valuable opportunity — and one that travel brands should seize.
Engaging with your customers on a personal level means collecting data and feeding it back into your offerings. You’ll want to consider all the myriad ways you might be able to customise and personalise your brand messaging, holiday deals, package trips and travel locations.
To deliver a personalised experience to your customers, it’s worth investing in leading-edge data and automation tools, such as unique promo code generators. These tech tools will enable you to gain valuable insights about your customers’ behaviours, motivations and desires. You can then use this data as fuel to drive your marketing strategies — and now is a great time to begin planning and fine-tuning these strategies ahead of the recovery period.
Catering to new travellers
Another promising trend to capitalise on is catering to the expanding number of new travellers from developing nations. In the years before our current crisis, the new middle class of the developing world became an increasingly important, and highly lucrative, market.
In 2019, China’s outbound tourism market was worth over $250 billion. By 2020, India is expected to see over 2 million luxury outbound tourists. It’s estimated that in the next ten years, 30 million more households will begin earning more than $100,000 annually, and approximately 30% of these households will be located in emerging markets. Now is the time to start thinking about how you’re going to cater to these travellers in the future.
Of course, meeting these travellers’ needs might require some research and out-of-the-box thinking. For example, many travel consumers from emerging markets enjoy the convenience, budget-friendliness and security of package holidays. Still, as these individuals become more seasoned travellers, there will likely be a growing market for more flexible options and new, more thrilling destinations. Over half of Chinese millennials, for instance, cite the importance of hip cultural ‘hotspots’ over historical sites. Once again, personalisation will play an essential role in reaching and winning over new customers.
Focusing on new destinations
Along those same lines, all travellers, and especially millennials, are eager to explore new destinations. Continuing to focus on new destinations is a vital way for travel brands to remain profitable in the coming decade. This trend is primarily driven by the following:— Social Media: Over the past few years, social media has fueled a new interest in uncharted tourist destinations, including those in emerging regions, such as southeast Asia. Social media has created a suite of self-advertisers for previously under-explored destinations, meaning western Europe is losing its footing as the single most desirable holiday spot. Through 2030, travel to emerging economies is set to increase at double the rate of travel to developed economies. Social media marketing will play an important role in recovery efforts, and so will an emphasis on tourism in developing countries.
— New forms of transport: High-speed train travel has offered travellers an eco-friendly alternative to air travel across Asia and Europe. Continued investment in rail lines means this trend will continue, connecting travellers to new destinations. Twin-engine long-haul jets, such as the Dreamliner, have made possible new city-to-city routes. Nearly 200 million passengers have flown on Dreamliner jets since their commercial introduction in 2009. Taking advantage of these new modes of travel is a key way for brands to remain relevant and get their customers to where they want to go.
— New types of accommodation: Airbnb has helped prompt the shift to more DIY forms of travel, especially among millennials. Since 2008, Airbnb properties have hosted half a billion guests, many of them under the age of 40. By 2025, millennials and younger generations will account for nearly 75% of travel — and it’s likely they’ll continue to choose Airbnb. Integrating listings with Airbnb’s platform will be a critical step towards staying relevant in the recovery period.
Catering to customers seeking new, unique experiences and destinations means embracing the above trends and creating bespoke deals and packages for travellers. To prepare for this, brands should begin planning to integrate and collaborate with new communities of local providers, including hotels and resorts, car hires, and dining and entertainment partners. If nothing else, the current slowdown presents time to begin laying the groundwork for these collaborations and start strategising for a brighter future.
Coming back stronger than ever
The travel industry has suffered some severe blows in 2020. But like the crises that came before, this too shall pass. When it’s safe for people to travel again, the brands that have made a point to invest in their long-term future and take advantage of ongoing trends will be the ones who emerge on top.
Personalisation, emerging markets and new travel destinations are all trends that are here to stay. Preparing now to capitalise on these opportunities once the current crisis has passed is an excellent way for brands to look forward and position themselves for future boom times. Partnering with the right tech providers is a fantastic way to start.
This is a trying time, but short-term survival is possible — and with the right approach, so is long-term success.