Reimagining Tourism // 4 Actions to Drive Recovery Post pandemic

Reimagining Tourism // 4 Actions to Drive Recovery Post pandemic

Tourism made up 10 percent of global GDP in 2019 and was worth almost $9 trillion,1 making the sector nearly three times larger than agriculture. 

In Kenya the Travel and Tourism industry is a significant contributor to the economic development of most economies in the
world. The tourism sector is one of the key economic drivers in Kenya generating 8.8% of the country’s GDP, worth USD 7.9 billion.

However, the tourism value chain of suppliers and intermediaries has always been fragmented, with limited coordination among the small and medium-size enterprises (SMEs) that make up a large portion of the sector. 

Governments have generally played a limited role in the industry, with partial oversight and light-touch management.

COVID-19 has caused an unprecedented crisis for the tourism industry. International tourist arrivals are projected to plunge by 60 to 80 percent in 2020, and tourism spending is not likely to return to pre-crisis levels until 2024. 

This puts as many as 120 million jobs at risk. Reopening tourism-related businesses and managing their recovery in a way that is safe, attractive for tourists, and economically viable will require coordination at a level not seen before.

As travel companies reimagine their pathways to recovery, it is important to address the risks and anxieties related to COVID-19, while also solving for the pain points and trends that existed before the crisis. 

Below are six steps that countries can take as they embark on this road to recovery.

Focus on domestic travelers

Local demand can be revitalized by focusing on emerging destinations with the joint cooperation of local governments, online travel agencies, attractions, hotels, and airlines. 

Domestic tourism is a major driving factor of Kenya’s tourism and travel sector, contributing more than half of its GDP. This attracts both local and international investors to invest in both transport and infrastructure

Domestic tourism remains the viable option to revive tourism businesses in the wake of the pandemic that has disrupted businesses all over the world.

Two years since the disease was declared a global pandemic, the country’s tourism industry managed to remain afloat by harnessing the power of domestic travel.

With international travel restrictions, stakeholders have no option but embrace campaigns aimed at boosting domestic tourism to stay afloat.

The Government through the ministry of tourism has played quite a critical role in ensuring growth in local tourism, through campaigns such as #MagicalKenya, that showcase Kenya’s hidden gems.

To further tap into the domestic opportunity, operators will have to focus on affordability while striving to maintain high-quality products and experience.

In our series of the fireside Chats  held in September during the World Tourism Day 2021, at Nairobi Garage  Karen themed Revamping Local Travel & Enabling Sustainability, the speakers Amakove Wala, founder Wanderlust Diaries and Barbara Schott founder Tierranjani Africa shared tips on ways in which COVID-19 had helped shift mindsets and encourage sustainability when it comes to promoting local tourism.

“As Domestic Tourism and Regional Tourism in Kenya becomes more visible due to several factors including the COVID-19 pandemic, industry players have come up with attractive packages for the local tourists hence creating great and unprecedented opportunities in the Kenyan Industry than before. The players in the industry just have to look at this from a glass half full or glass half empty perspective,” said Barbara Schott founder Tierranjani Africa

Consider new pricing models to rebuild demand

Rebuilding demand and propelling volume, through discounts and presales, are key tactics during the early stages of recovery, especially for high-end operators that will not be able to tap into international demand for some time. 

However, the pandemic has also forced operators to set aside their existing commercial playbooks. Historical booking patterns and trends normally used as key reference points for price optimization and yield management may no longer be as relevant. 

In this context of depleted demand, the paradox is that while price cuts are necessary, they could also be dangerous. 

In this light, companies can also explore opportunities to bundle products—which can offer upselling and cross-selling opportunities—as well as diversify their revenue stream and enhance premium product and pricing.

Five-star hotels can opt to provide full “staycation” packages for families, complete with home pickup by luxury car, a suite, and discounts on food and drinks. 

Tourism companies and hotels could work together to provide end-to-end travel packages that include flights, train tickets, limousine and bus services, and accommodations. 

Other companies could capitalize on booming demand for luxury and outdoor activities, such as yacht tours or farm stays.

Digital Transformation is here to stay

The pandemic has made the adoption of mobile and digital tools even more essential. Strategic collaborations—such as online travel agencies providing ticket-booking services via instant messaging and social-media platforms—could offer an opportunity for increased market penetration.

At the same time, travel companies should revamp their online touchpoints and experiences to improve customer experience.

Furthermore, companies could also think about placing digital tools in new places within the customer journey. 

They must recognize that factors promoting customer loyalty may have changed; near-term uncertainty may mean, for example, that the ability to cancel a reservation matters more than brand choice or price. 

Taking this into account, companies could empower customers to build their own itineraries using connected digital tools that make it easier for them to modify or cancel their plans. 

The companies in the sector could also opt for solutions like Virtual Reality that ensure visitors take a virtual tour of their destination prior to the visit. Solutions and policies that provide choice and control will help build the long-term trust and confidence necessary to get travelers back on the road and in the air.

Traveling Experience will be beyond accommodation

Globally, travelers are personalizing their trips through destination adventures. Tourism spending is shifting away from accommodation to activities.

Instead of spending on luxury accommodations, travelers are saving money for destination experiences.

Many tourists are booking activities before they travel, which suggests the in-destination experience has a bigger impact in the overall tourist decision-making process. 

Many adventure activities, such as cave discovery,  hiking, isolated island stays, water sports, and food festivals/expos have become the main reason for travelers to visit a destination in the first place.

Local operators, who often lag behind big travel companies in terms of resources but are more agile in organizing personalized activities, can leverage increasingly popular online players to connect directly with customers and provide these options.

 International online travel agencies such as TripAdvisor, as well as closer-to-home players such as Bonfire Adventures, Tawi Travels , who is also a member of Nairobi Garage, have been building dedicated “experience” platforms to inspire users and allow them to choose the most suitable tours by providing a range of attractive options for destination adventures.

Tourism companies could shift their efforts away from building resorts and selling sightseeing tickets to designing exceptional activities and leverage these platforms to take advantage of travel-experience trends.

In conclusion, as a greater percentage of the population gets vaccinated and more boarders get opened, its clear that the tourism industry will gradually grow to its past glory. However, travel players in Kenya will have to do things slightly differently than before. With the Government Intervention, key players can seek to accelerate the industry’s recovery by capturing emerging growth opportunities domestically as they gradually rebuild international travelers’ confidence.