Over the past 20 years, the global travel and tourism business has grown at a 5% annual pace and in 2019 it totaled $4.7 trillion, according to new research from BCG in collaboration with Google. Destination marketing organisations (DMOs) have been at the heart of this growth. When the pandemic began, however, the impact on the travel industry was immediate. A decline in international and commercial passengers around the globe could lead to a loss of up to 58% of jobs (190 million) in the travel and tourism industry, and cut the industry’s contribution to global GDP by up to $5.5 trillion (62%), according to the report.
For destination marketers in charge of developing tourism strategies based on annual planning and predicted travel behaviour, this period has been particularly difficult. That’s why we looked into how consumers’ attitudes toward travel have changed in response to the pandemic. And how DMOs can prepare for eventual resumption of travel — or more unexpected changes on the horizon. Together with Boston Consulting Group (BCG) we analysed the data to develop a framework to help destination marketers in a dynamic environment.
Travel demand declined over safety concerns
Google searches related to air travel declined 62% from their January levels, as major international expositions, conferences, and sporting events across the globe were cancelled or postponed. This included Dubai's Expo 2020, the Tokyo Olympics, and the Beijing Motor Show.
Consumer sentiment followed suit. As concerns over personal finances and fear of catching the virus loomed large, leisure travel was not a priority for most people. Consumers are as much as three times more likely to fear getting sick while traveling than when shopping in local stores, and international travel is seen as more dangerous than domestic. Additionally, more than 70% of consumers believe it is irresponsible to travel until the virus is under control, and over two-thirds believe it is not worth the risk of taking a vacation until the world returns to a sense of normalcy.
Capturing consumer interest as travel demand shows signs of revival
However, the desire to return to ‘a new normal’ is evident as consumers rate leisure travel as the top activity they miss the most. In fact, 31% surveyed in the report hope to plan leisure travel once they feel safe enough to do so, in accordance with government health regulations. While health and safety precautions remain top of mind, the industry is making its way towards a long-term recovery phase with search queries for flights and vacation rising gradually, particularly for domestic travel.
As demand and supply for travel continues to shift with markets reopening at varying speeds, DMOs must stay on top of these shifts in consumer behaviours in their respective markets, so they can act with speed to capture market share. We collaborated with BCG to develop a ‘five R’ approach to help DMOs:
- Reassess their offerings and value proposition in light of evolving traveler preferences, needs, and concerns.
- Reassure travelers on the safety of travel to their chosen destination by addressing their health concerns.
- Raise awareness of the destination, including added safety measures and local government regulations, to inspire consumers.
- Remove barriers in converting consumers to travelers by making the case for traveling with conscientious health and safety measures in place.
- Revive spend in the local economy by supporting tourism.
How the travel industry can adapt and thrive in the recovery phase
As various markets adapt their tourism strategy depending on the individual impact of the pandemic, technology can fill the gap by keeping consumers up-to-date of health and safety precautions. In this way, technology can be a lifeline for the recovery of the travel industry, so it can return stronger and more resilient than before the pandemic. Accelerating the digitisation of the industry can help DMOs adapt and thrive in the new environment.
By gathering and carefully analysing near real-time data and business intelligence, DMOs will be able to gain the insights they need in our current highly volatile travel environment. Traditional data and analytics that rely on historical data and travel patterns will not be adequate for predicting the shape of the coming recovery, or to respond effectively. They also do not account for more immediate upper funnel demand drivers, such as the progression of COVID-19, government travel sanctions, and dynamic flight availability.
One approach is to make (better) use of the data you already have access to: your first-party data. This is the information that you get directly from customers — through CRM, website analytics, sales, and more — which should always be used in a privacy-safe and responsible way in line with local regulations. Complement first party data with consumer insights from Google Trends and Shopping Insights for a holistic approach to gathering and analysing data.
With the best available data and insights in hand, DMOs can begin to
coordinate their efforts across three key activities. This will help them prepare for long-term recovery of the travel industry, while ensuring health and safety measures are in place:
- Product and service development: Guide deployment of new products and services, health and safety standards, measure and regulations, and operational measures.
- Stakeholder engagement: Inform stakeholders (including governments and healthcare officials and travel industry suppliers) of unified communication messages and collaborate with them on setting travel and health standards.
- Marketing: Reallocate marketing spend by channel, and guide campaign messaging and timing.
As the world recovers from the COVID-19 pandemic, demand for travel will be largely shaped by a destination’s health conditions and standards of medical care. Keeping in mind the five R approach and utilising this time to gather key data and insights will aid in the recovery of the travel industry in the long run.
