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The travel industry has been sucker punched by this global pandemic. With travel restrictions, closed borders, grounded flights, and shuttered tour companies, accommodations and destinations, the whole industry has ground to a halt.
Many businesses are on government assisted life support, and some won’t make it through. With expenses and cash flow challenges magnified by a limited demand curve initially when things do open up, it’s a game of survival, with the clock ticking.
What might recovery look like? And if we could crystal ball that, how might we plan from both a customer and industry perspective to take advantage of the emerging sweet spots and opportunity?
I’ve worked in marketing and media for over 20 years at www.fiveminutemarketing.com , strategically planning for clients based on trends, social listening, and drawing on research beyond the impacted industry to envision a future that few competitors were preparing for. I’ve applied this approach to the travel industry in my thoughts below, where I am also a content producer, writer, speaker and consultant at my newest venture right here at, www.carryonqueen.com My hope is that these insights may be useful for many.
Fear & the shortage of discretionary income
Fear and shortage of discretionary income are two factors which will impact the travel industry for the next 2-3 years, regardless of testing, treatment or eradication of the disease. While hopeful for a vaccine within 12-18 months, until then travel will be influenced by the fear of becoming infected. The longer-term impact will be the economic fallout as consumers have less available money to spend on travel, or are worried about job loss and income as the overall economy falters under soft demand, and businesses closing.
Travel was changed irrevocably after 9/11, with new safety and security measures. Covid-19 has put a new emphasis on “healthy travel.” Everything we used to do will now be viewed through that lens. Airport and destination health checks, pre-screening before booking, verification of health status and tracking while traveling will likely become normalized. We made previously unthinkable compromises on personal information in the name of security after 9/11. Whether we agree or not, this will likely become the price to pay for travel going forward.
Who will travel?
Younger populations fear the health threat of Covid-19 less than older populations. They will also be sensitive to lower cost deals offered initially, to incentivize travel.
The adventure travel market was one of the first to come back after 9/11. While this demo overall tends to skew younger, that is not always the case. It’s the psychological profile of the adventure traveler that will matter. Overall, they are someone who is inherently more comfortable with a degree of risk in the first place, and they will be seeking value in experiences that others may have deemed moderately dangerous. They may also see early opportunity in visiting areas that have suffered over tourism, knowing they are likely to have a memorable experience.
Luxury travel will do well early, since that market will always have money, and properties will cater to health safety and cleaning concerns, because it’s part of their DNA already to cater to a demanding higher end customer. The higher costs associated with ensuring a healthy environment will be more easily absorbed by this target market too.
Those separated from family & friends
This is a huge group, and frankly it will drive much of early travel, primarily domestic in nature. This group will journey based on a reflection of their values, to spend their time with purpose, traveling with or going to see those they love.
The donut hole in the middle, where a lot of international and domestic travel sits, which has been competitively priced and positioned to appeal to the masses, will be threatened – at least in the short term. This is simply because the demand won’t initially exist, and the price point that consumers are used to, will be near impossible for companies to meet and still make money.
Why will we travel?
Post Covid-19 travel will be very intentional. Recreational travel will be more about the journey, and who you are taking it with, or who you are going to see. While the actual destination may still hold importance, it will not be as strong as it used to be. This will be in part because not all destinations will be available for some time, and there may well be a lot of “substitution” happening. And because isolation has denied human connection for many, the actual journey with family or friends or the promise of embracing them at the destination, will take on a much stronger drive. There will be an overall emotional sense that “life is short”, enjoy it with those you love. Business travel will also be altered, with the likelihood that fewer trips will be taken and justified. While Zoom meetings and virtual conferences that we have become accustomed to will never completely replace real life interaction, they will cause companies to question the need for travel, and as a result trips will be more widely scrutinized, especially during more economically challenging times over the next several years. The full fare business traveler has been the backbone of airline financial success, so expect a softening in this area to put further pressure on flight prices in the recreation market.
Where will we go?
It’s widely believed that open spaces, and outdoor locations are safer, and for that reason we will likely see a larger uptake in domestic travel to rural areas, wilderness, the mountains, lakes, oceans, cabins and parks. These places are also for the most part, viewed as having had less impact, which will make them desirable. But there will also likely be push back from residents in those areas, who fear the virus being imported in and putting strain on their health care systems, so that could be a factor. Contrary to conventional thinking, hard hit areas once relatively safe, may actually be appealing, since deals will exist, and the local economy there will embrace visitors. Where we can travel initially outside of our own countries will be restricted and at the mercy of foreign governments, as well as airlines who may well have altered where they will now fly.
How will we travel?
Initially domestic road trips are likely the first area to open up. The way we travel will become a conscious choice. There is perceived health safety in your own vehicle, away from others. RVing and camping will also be very appealing, because you will be able to control your own living environment, know that it has been sanitized, and food preparation will be within your own control. There will also be a lot of pent up emotion, anger at missed opportunities, and a desire to see people and spend time with those that matter. This will likely dictate who we take those road trips with – family and friends.
Airplanes and buses will need to allow space between seats, as well as rows. Half full planes will be the norm. Cleaning and disinfecting will need to be stepped up, and turn over between flights will also need to be extended to allow for this. There is likely to be agreed upon monopoly routes, split up by international carriers, since there won’t be enough demand to fuel competition. We will also likely see consolidation of airlines. Some international carriers may well become domestic only or fold.
Cruise lines took a huge hit with the Covid-19 crisis. Not only did they become targets for bad press as infected ships were denied ports, and passengers were seen to be held captive, but the target audience was largely older, and regarded as more susceptible to the virus. Cruising is going to need to reinvent itself, and it may not come back for several years. They will need to address air filter systems, disinfection of common areas, and how emergencies at sea are handled so passengers can be assured they can disembark quickly if needed. All of this will likely lead to consolidation in the industry, and a re-evaluation of ports where ships are allowed to visit.
What will be different?
Healthy travel will be the new emphasis. This will also usher in the “no touch economy” at scale. Hotel door keys will be replaced by access codes on your phone, through remote check in online. Housekeeping will not come in your room until the end of your stay, at which point it will be a cleaning and disinfecting process that far exceeds what is done today. It’s also likely, at least initially, that day gaps will be left between room occupants, to further guarantee a germ-free zone. Or the installation of UVC light emitting LED lights to sanitize surfaces without using chemicals may become common.
There will continue to be respect for distancing, and the use of masks, at hotels and airports. Smaller properties with private entrances, no elevators, and greater ability to remain separate will be in higher demand than larger hotels with common areas. Properties that allow families to all stay together, as well as prepare food, may also see more demand. We may see a revival of the nostalgic roadside motel – complete with outside room entrances, perfect for family road trips. I expect we’ll say goodbye to the hotel buffet and bar fridge, and quite likely room service. No touch, pre-packaged take away may fill the gap.
Being tested and cleared before travel, and at destination arrival may become common, at least in the initial stages of recovery.
Travel insurance companies have taken a huge hit during this crisis. As a result, policies will become more expensive, and clauses potentially more restrictive. Prepare to pay top dollar if you want a CFAR (Cancel for Any Reason) policy. Credit card companies with travel coverage included in their policies, may look at limits on coverage too. Overall, there will be an increased interest and purchase of travel insurance.
Initially there are likely to be price incentives by tour companies, operators and accommodations. But it’s too early to tell with airlines, since they function on a demand model and competition which will not exist. While the hope is for initial deals, we could also see a return to the golden age of travel, where customers pay more, but have a safe, healthy, and luxury spaced experience. Supply and demand will drive price, so eventually if there is enough demand, the price will go down again.
Tour operators won’t offer routes that aren’t profitable. As a result, some routes and trips will disappear. It’s entirely possible that a full menu of destinations will take 2-3 years to become available again.
Who will be threatened?
Destinations, accommodations, tour companies, and local tourism operators who rely on international traffic where there is limited domestic audience available as a substitute will have a tough time. Markets like Canada, the US, and Australia may suffer huge international traffic losses, but domestically there is hope of buoying the demand, especially if local state, provincial, or federal governments promote a “vacation at home” this year type message. Pockets of Europe may well be ok with this approach too, but it will depend on the economic hit combined with the shake out from the pandemic.
Companies that sell experiences based on groups, such as cruise ships, tour buses, conferences, music event and festivals will be challenged until health safety can be ensured.
What are the marketing challenges?
For many travel businesses, the challenge will be to appeal to a domestic traveler, and to frame their message from that perspective. This will present new market opportunity, but they’ll have to think carefully about who that target is from a demographic, geographic, psychographic and behavioral standpoint. How will those differences influence the changes needed to the destination or experience offered? How will those difference impact the images, and language used across print, video, audio, social media, and channels for communication selected?
Since consumers have most recently retreated to the base of Maslow’s Hierarchy of needs, in dealing with physiological and safety needs related to food, shelter, health, safety, employment and security, they will be emerging into a time when messaging is likely to be centered around the mid-level of Maslow’s hierarchy of needs. Featuring love, sense or connection, friendship and family, and less in the area further up the hierarchy, where travel has traditionally been positioned, related to strength, freedom, status, recognition, self-esteem, and self-actualization, will resonate and be more relevant right now. There will have to be messaging to ensure health safety, and measures taken to back it up. Since the initial travel demand will be domestic based, messaging to support “the home front” and give back by patronizing businesses within your own country, province, state, or town will resonate. There may even be some opportunity to play creatively with the notion of substitution, since international bucket list destinations are likely to be off the table initially. Looking at places with similar attributes or names, and playing on the obvious differences, but the fact that they are very much welcoming destinations closer to home. For example, where I live in British Columbia, people who may have wanted to visit Long Beach in New Zealand, could be encouraged to visit Long Beach on Vancouver Island. Or perhaps those who had Australia’s Sunshine Coast on their list, might visit BC’s Sunshine coast just north of Vancouver. A similar play on Sydney, Nova Scotia and Sydney, New South Wales, Australia, would be an inter-provincial example. Or perhaps acknowledge that there is only ONE Whistler, and it’s in BC, close to home, and right now not accessible to outside global travelers – could there be a better time to experience it, and have it all to yourself?
I’m absolutely certain that this type of creative play is possible in all other markets. You just need to think about the marketing from a different perspective, and with a different target market in mind, all the while being hyper focused on what customers will now value, based on the trends and observations I’ve suggested. This is how the travel industry will begin to recover.
There is opportunity in every crisis of course. Forward thinking companies will recognize how to pivot and re-frame their offering from the perspective of what the consumer will now value. It’s unlikely we will return to a travel industry like the one we left just 4-6 weeks ago. Wishing the virus away will not change the outcome. Adjusting our approach will.
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If you want to read more about reframing relevance, being nimble with your marketing, or how to structure your RESPONSE, RECOVERY and RENEWAL during the pandemic, I’ve published a 5-Part series over at www.fiveminutemarketing.com. Check it out!