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4 Ways Tourism Operations Might Adapt To A New World

By miltongroup, August 24, 2020

Don’t mention the C-word. If you’re like me, you’ve got C-fatigue from reading blog after blog about COVID and the links between our health and the environment. I know it’s real and it’s brutal and I don’t mean to diminish its seriousness in any way, but this marathon is taking its toll and we’re suffering. Most of us thought it would be over in a few months and we could get back to… planning our next trip away (first world problems)! Some of us even had a taste of freedom a few weeks back cannonballing off on roads trips to anywhere, but borders are shutting up again and the prospect of restricted travel becoming a permanent fixture is all too real.

In a blog earlier this year, I looked at how ‘you know what’ might influence our travel habits:

If you can’t be bothered reading it, the punch lines were:

  1. Drive-to domestic or simple-transit international destinations

  2. Single destinations and longer stays

  3. Homes away from home in smaller hotels and luxury homestays

  4. A focus on health and wellness

  5. A greater connection with the environment and remote locations

Most of these predictions were fairly obvious and it seems a number of them are materialising, evidenced by the strong push toward domestic nature-based travel by government and the various state tourism departments. I believe it’s a good thing, hopefully it leads to slow more mindful travel and a renewed appreciation for this extraordinary place we’re fortunate enough to live in.

However, the next few years, or maybe more, are likely to be a rubber of lock downs and partial lockdowns as we react to partial flare ups and potentially even new threats. So, how can the tourism operations cope? It simply won’t be sustainable to close operations every time there’s a hint of an outbreak. In April this year, the World Travel and Tourism Council projected that 100 million jobs have been lost globally due to the crisis. This is 5 times the impact of the 2008 Global Financial Crisis. One can only expect that 4 months after this publication, the statistics could only be worse. We can probably survive this once, but not twice.

As we navigate this new normal, the sector will invariable adapt to respond to new consumer needs including a new breed of ‘nervous traveler’. Some of these changes may endure well beyond the next few uncertain years. Bigger picture, I expect we’ll see an emergence of ‘isolation accommodation’, more guest independence and, from the operator’s perspective, leaner business models.

Here’s four ways that might manifest.

  1. Creative self-cater options

Food is a big part of modern travel. As travellers limit unnecessary contact, particularly those deemed as vulnerable, self-sufficiency and no-contact options will be a priority.

For urban hotels, the idea of room service every night sounds nice, but it can become monotonous and expensive. This could translate into more kitchenettes, similar to that of a serviced apartment, allowing guests to mix it up and cook for themselves with fresh produce provided by the hotel.

In the boutique and luxury hotel space, where we typically work, it might mean guest suites getting larger and common areas getting smaller to allow for more varied private lounge and dedicated guest-operated food and beverage areas. Think outdoor bars and kitchenettes around a plunge pool, a mini version of a private villa.

Those groups who have branded villa products, typically at the top end of the market, will be uniquely positioned to take advantage of this new autonomous traveler. We might see more affordable adaptions of serviced villa products emerge in mid-market brands.

  1. Workspaces and technology

The divide between work life and home life has been blurred. Most of the working world has been given a crash course in digital conferencing and many businesses have realised that, if managed correctly, efficiency can be maintained while overheads are cut through savings on expensive commercial spaces. Combine this with 5G (unless of course this is actually what’s killing us all…joking) a world of opportunity opens up for remote working and working holidays.

Not everyone is compatible, but for some, the location autonomy is liberating. For our team, where travel was integral to our daily operations, we are conditioned to this, but finding a quiet workspace with good facilities was historically difficult; power outlets in strange places, patchy Wi-Fi, broken or no printing facilities etc…

I expect we could see hotel rooms, lodge guest suites and branded villas with dedicated workspaces, catering to the mobile worker as well as business travellers in mandatory isolation. Also, fast internet, large screens to connect to and dedicated video conferencing equipment.

  1. Less staff

We’re involved in a number of projects that have been ‘mothballed’ for 6 months. Fortunately, these projects have backers who have the means to survive this, but that’s not the case for everyone. If we expect this could be a reoccurring issue, how will tourism operations adapt to be more economically resilient?

I expect we’ll see creative ways to reduce staff numbers, especially in the developed world where labour costs are high. Digital concierge services will help to reduce permanent staff while still providing guests with access to information, activities, food and beverage options but with less person to person contact.

As mentioned earlier, larger guest rooms might also translate into smaller or no common areas like the public bar or restaurant. Theoretically that could equate less staff, a reduction in construction cost and, hopefully, a reduction in reoccurring debt commitments.

  1. Economic diversity

For any business, having all your eggs in one basket is risky. The one-dimensional nature of the tourism economy has never really been exposed at such scale on a global platform. Seasonality is usually the biggest dip an operation needs to navigate, but pandemic scares will likely need to be factor into forecasts going forward.

Tourism operations will need to develop strategic partnerships with complimentary industries to breed economic diversity and resilience. This isn’t new thinking, over the last 5 years some of our projects have led a very deliberate push toward more holistic economies to support local communities and our conservation initiatives. The Kurhula Farming Project at Karingani Reserves is a great example:

For nature-based tourism operations like ours, other examples could be sustainable forestry, agriculture, green energy or carbon markets. Finding ways to economise a broader community of stakeholders.

It’s difficult to maintain a positive outlook at the moment with so much uncertainty, but adversity breeds innovation, so I think we have much to look forward to.

Tom Palmer, Partner, Australia