Tourism and Hospitality During COVID-19 Pandemic

It is a very turbulent time, especially for travel- and tourism-based businesses. We have tried to help you to navigate through the current crisis by collecting information about the economic environment overview in this industry and best practices, based on tips and tricks other companies used to get out of the previous crises (9/11 and SARS). We hope that this article will spark some ideas for your strategy in these difficult times.

The economic environment for tourism-based businesses during COVID-19 crisis:

The COVID-19 pandemic has a tremendous effect on the global economy. Bloomberg predicts that Coronavirus could cost the global economy $2.7 trillion. As per their predictions, in the worst-case scenario, the GDP globally would drop by 3% this year. The most affected industry is tourism and hospitality. Tourism represents 10 percent of the global GDP, therefore it will have a huge impact on the global economy. According to the World Travel and Tourism Council, this pandemic could cut 50 million jobs globally in the travel and tourism industry. According to the Mobility Market Outlook on COVID-19, the global revenue for the travel and tourism industry will be lower by 17% from the previous year, an estimated 568.6 billion U.S. dollars for the full 2020 operations.

2020 forecast – international tourist arrivals, world (%change):

Forecasted change in revenue from the travel and tourism industry due to the coronavirus (COVID-19) pandemic worldwide from 2019 to 2020 (in million U.S. dollars):

Travel restrictions are growing: 

COVID-19 outbreak impact on the airlines: 

UNWTO estimates international tourist arrivals could decline by 20% to 30% in 2020. Airlines are operating on very few routes, mostly performing repatriation flights on requests of the governments or cargo flights with medical supplies. 

Estimated impact of COVID-19 on air transport in 2020 – RPKs and air passenger revenue loss:

2020 forecast - international tourist arrivals, world (millions):

As of March 22, the number of passengers traveling into and out of European airports had declined by 88%, compared to a year earlier. Ryanair and easyJet grounded most of their fleets in late March.

COVID-19 outbreak impact on the restaurant industry: 

Year-over-year daily change in seated restaurant diners due to the coronavirus pandemic worldwide from February 24 to April 7, 2020:

COVID-19 outbreak impact on hotels:

Trip.com Group expects lodging businesses to decline 60-65% for Q1 2020 (January-March 2020) YoY (year-on-year comparison).

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How to survive the crisis – strategies that can help tourism- and travel- based businesses during COVID-19 economic crisis:

1. Be transparent and keep your customers informed 

Make sure the information on your website is easy to find. Prepare FAQ regarding cancellations and refunds. Make sure you inform your customers about the actions your business takes to reduce the virus from spreading (health and safety regulations).

2. Be empathetic 

Make sure you do not commit a faux-pas by promoting trips and travels in the time of a pandemic and travel restrictions. Here is a couple of do’s and don’ts from PR and communication point of view: 

Do: 

• Communicate changes in your policies and any help you give to the travellers (reduced fees, reduced itinerary change fees). 
• Give messages of hope.
• Support your followers in surviving the lockdown (you can issue tips and tricks on what to do while at home, you can mention that you feel for them and you are in the same situation, connect with them!) 
• Promote your charity actions, if you undertook any (helping the medical staff, helping with bringing necessary products to the country, with repatriation, donating money to other organizations, supporting your employees).
• Undertake the charity activities, if you have not yet, it will help you to create a positive brand image and positive PR coverage thanks to which you will stay on customer’s minds post-crisis.
• Promote your destinations in a subtle way, mentioning that it is waiting for the customers post-crisis for example. 

Don’t: 

• Take part in political conversations in the media. 
• Encourage customers to travel, in the time when it is either forbidden or seen as unsafe. 
• Comment on the fears of the customers (even if they seem to be exaggerated).
• Express your opinion on the safety measures people should adapt (either skip the topic or link to governmental regulations or official bodies’ recommendations). 
  

3. Promote your gift cards 

To keep  revenue flowing and stay liquid, gift cards might be a good solution. If you cannot sell your services due to the restrictions, you could sell your gift cards on a lower than nominal value (example: selling a gift card for 40 EUR with a nominal value of 50 EUR). It gives the customers an incentive to purchase your services upfront and can bring you extra cash. Besides, even in lockdown, people will still be celebrating birthdays and anniversaries. What better time for a business to offer gift cards?

Check out our article on how to make a fail-proof gift card strategy to gear your business for success.

Incentivizing customers to accept refunds to gift cards in case of cancellation is also a good idea. Read more on how you can do it with Voucherify here. 

4. Incentivize your customers to follow the governments’ regulations (and gamify their experience)

Positive communication, full of empathy, is key from the PR perspective in times of crisis. If you support people in following the regulations, you can get good media coverage. You can also get quite a lot of potential customers for the future. Gamification with #stayathome approach can be a good strategy. Read more about the psychology behind gamified promotions.

5. Invest in SEO

Create content that will help you to rank in the future. Prepare an editorial calendar for the next months. Google takes 3 months or more to rank your content. By the time the crisis is over, your website should rank higher and help you to recover post-crisis. 

6. Invest in your CRM infrastructure

Make sure you have a way to collect the data from your website’s visitors. It will enable you to run personalized campaigns and re-engagement offers post-crisis. Read more on how to launch personalized re-engagement offers with Voucherify. ‍

7. Prepare your retention strategy

The pandemic is a good reminder that it’s much easier and less costly to retain customers than it is to acquire new ones. Launching a good loyalty program takes time. You can prepare now for success later, with planning your loyalty program rules and creating the supporting content. You can combine it with the gift card strategy and reward your customers with your gift cards or your “currency” (points, miles).

You can already launch your loyalty program and offer loyalty points for interaction on your website and social media, incentivize reviews, tags and referrals; give points for behaviour that increases brand awareness or generates future leads.

8. Look at different possibilities for bringing in revenue 

Airlines are trying to gain more revenue with operating cargo flights, charter flights and repatriation flights. Consider which other areas of business you can serve with your current infrastructure. Are you a bus operator? Consider transporting goods or medical staff to their workplace. Do you have a restaurant? Offer takeaway or food delivery. Are you a car-sharing company? Consider focusing on driving people to/from the hospitals and clinics and going into food delivery services. Even shopping delivery from supermarkets could be a possible business opportunity. Are you a tour operator? Engage customers through virtual tours, webcams, and live streams. Keep them engaged by generating valuable and interesting content, from traveling tips to discoveries. Are you an event organizer? Start showing live streaming of “concerts” or offering podcasts from the artists you have contact with. A lot of them create free content right now and you could use your website to promote them (and possibly monetize it in the future). You can also promote webinars, online trainings and socializing. Be creative! 

9. Social Media – promote entertaining content 

During the social distancing time, people are eager for content that offers a little escape from the current situation. This is the perfect time to stay connected and provide valuable content and entertainment. Some ideas: 

• Destination photos – ask guests to comment and share their experiences and best tips about that destination. 
• Share recipes from your restaurant’s Chef. 
• Share tips for creating home-SPA. 
• Share workout or instructional videos guests can use to stay active at home.
• Create destination-themed coloring pages: Share a coloring page of the destination that people can print for their children to color. 

Summary

It is a very difficult time for the travel and tourism industry. There is no perfect recipe to survive the crisis and keep your business afloat. A lot of businesses will go bankrupt due to the crisis. If you do not invest in survival strategies, you might lose more. Do not just try to cut the costs and wait for the crisis to disappear. Remember to consider all possible options and ROI, before you decide to completely cut spendings on digital marketing. 

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