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The Panama Tourism Authority (ATP) announced the unanimous approval of its Master Plan for Sustainable Tourism 2020-2025 (PMTS for its acronym in Spanish) by the National Tourism Council, the main public-private body for the management of the tourism sector in Panama.
The five-year plan outlines ATP’s strategy for the relaunch of the country as a tourism destination, following its post-pandemic reopening on October 12. “The Sustainable Tourism Master Plan is a differentiation strategy, through innovation and sustainability, highlighting the natural and cultural heritage of Panama,” said Panama’s Minister of Tourism Ivan Eskildsen. “Our heritage offerings lead as an invaluable asset in the midst of an uncertain global environment, proving to be a competitive edge with strong authenticity that our country can confidently stand by.” The plan reactivates Panama’s Tourism, Conservation and Research (TCR) strategy applied in Panama over 20 years ago by the prestigious ecologist Dr. Hana Ayala. The TCR Strategy positions the country's conservation and sustainability efforts at the forefront, along with its unique nature, culture and historic offerings, capitalizing in the overall safety that Panama offers. The updated TCR Heritage Routes strategy now features three focus areas: Cultural Heritage, Green Heritage and Blue Heritage. Comprised of 19 circuits that tell the stories of Panama, the plan was developed through thorough analysis and research conducted in multiple workshops with the help of local and international consultants, the Smithsonian Tropical Research Institute (STRI), the academic team of the Biomuseo (Biodiversity Museum), the Ministry of Environment, and the Ministry of Culture, the Panamanian travel industry, and other key organizations. The Heritage Routes are distinct in their offerings: Cultural Heritage: Narrates the history of Panama as the Bridge of the World, connecting world class attractions such as Casco Antiguo (UNESCO World Heritage), the world-famous Panama Canal, the first interoceanic railway, among others. Also, the cultural circuits showcase Panama’s multicultural diversity, offering experiences across Panama’s three main cultures: its 7 living indigenous groups, its Afro-Panamanian heritage including the Congo culture (UNESCO Intangible Heritage), and its colorful Spanish colonial culture. Panama’s cultural diversity is also experienced in its gastronomy, where UNESCO has recognized Panama City as a creative city in gastronomy. Green Heritage: Ever since the Panama isthmus was formed 3 million years ago, it produced a great exchange of species between North and South America, providing the country with an extraordinary biodiversity: it holds more species of birds, reptiles, mammals and trees than the US and Canada together. The Green Heritage routes take the visitor across National Parks, protected areas and private reserves in Panama’s neotropical rainforest (one third of the country is protected), including experiences through the Smithsonian Tropical Research Institute’s visitor centers, one of which is the Barro Colorado Nature Monument in the Panama Canal watershed, considered the most intensively studied tropical forest in the world. Blue Heritage: Three million years ago, with the creation of the land bridge of the Panama Isthmus, the Caribbean and Pacific Oceans were separated, becoming two different oceans in terms of tides, climate, and marine fauna. The experiences offered across the various ecosystems in the Blue Heritage Routes, include whale-watching surrounding Coiba National Park (UNESCO World Heritage Site) and admiring turtle conservation projects in the Pacific Ocean, as well as exploring the Caribbean turquoise waters of Bocas del Toro, recognized as a Hope Spot by Mission Blue, the initiative led by National Geographic Explorer Dr. Sylvia Earle. Panama’s PMTS renews the country's tourism strategy and hope for the industry’s progressive reactivation post-pandemic. The destination’s first international push for the relaunch of tourism is the Experience Panama Expo, a virtual fair taking place September 25-27, featuring local exhibitors and international buyers, which also coincides with a virtual meeting of ministers from the region. The Tourism Master Plan also includes an important component of community-based tourism, which connects with a flagship project of Panamanian President Laurentino Cortizo’s administration, the Colmena (“Beehive”) Plan, which seeks to improve the development of the 300 townships with the greatest socioeconomic vulnerability in the country. Paradoxically, some of these communities have a rich natural and cultural heritage, mainly Indigenous and Afro-Panamanian communities, that can offer discerning travelers the experience of authentic living cultures, surrounded by pristine ecosystems, included within the Heritage Routes. The five-year plan focused on the reactivation of the country’s tourism industry represents an estimated investment of $301.9 million including investments made through the Tourism Promotion Fund (PROMTUR) and financed by an approved loan with the Inter-American Development Bank (IDB).
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International tourist arrivals plunged 93% in June when compared to 2019, with the latest data from the World Tourism Organization showing the severe impact COVID-19 has had on the sector. According to the new issue of the World Tourism Barometer from the United Nations specialized agency, international tourist arrivals dropped by 65% during the first half of the year. This represents an unprecedented decrease, as countries around the world closed their borders and introduced travel restrictions in response to the pandemic. Over recent weeks, a growing number of destinations have started to open up again to international tourists. UNWTO reports that, as of early September, 53% of destinations had eased travel restrictions. Nevertheless, many governments remain cautious, and this latest report shows that the lock downs introduced during the first half of the year have had a massive impact on international tourism. The sharp and sudden fall in arrivals has placed millions of jobs and businesses at risk. Counting the economic cost According to UNWTO, the massive drop in international travel demand over the period January-June 2020 translates into a loss of 440 million international arrivals and about US$ 460 billion in export revenues from international tourism. This is around five times the loss in international tourism receipts recorded in 2009 amid the global economic and financial crisis. UNWTO Secretary-General Zurab Pololikashvili said: “The latest World Tourism Barometer shows the deep impact this pandemic is having on tourism, a sector upon which millions of people depend for their livelihoods. However, safe and responsible international travel is now possible in many parts of the world, and it is imperative that governments work closely with the private sector to get global tourism moving again. Coordinated action is key.” All global regions hit hard Despite the gradual reopening of many destinations since the second half of May, the anticipated improvement in international tourism numbers during the peak summer season in the Northern Hemisphere did not materialize. Europe was the second-hardest hit of all global regions, with a 66% decline in tourist arrivals in the first half of 2020. The Americas (-55%), Africa and the Middle East (both -57%) also suffered. However, Asia and the Pacific, the first region to feel the impact of COVID-19 on tourism, was the hardest hit, with a 72% fall in tourists for the six-month period. At the sub-regional level, North-East Asia (-83%) and Southern Mediterranean Europe (-72%) suffered the largest declines. All world regions and sub-regions recorded declines of more than 50% in arrivals in January-June 2020. The contraction of international demand is also reflected in double-digit declines in international tourism expenditure among large markets. Major outbound markets such as the United States and China continue to be at a standstill, though some markets such as France and Germany have shown some improvement in June. Looking ahead, it seems likely that reduced travel demand and consumer confidence will continue to impact results for the rest of the year. In May, UNWTO outlined three possible scenarios, pointing to declines of 58% to 78% in international tourist arrivals in 2020. Current trends through August point to a drop in demand closer to 70% (Scenario 2), especially now as some destinations re-introduce restrictions on travel. The extension of the scenarios to 2021 point to a change in trend next year, based on the assumptions of a gradual and linear lifting of travel restrictions, the availability of a vaccine or treatment and a return of traveler confidence. Nonetheless, despite this, the return to 2019 levels in terms of tourist arrivals would take between 2½ to 4 years. 
“What activities are open to do next week? Zip-lining? Jet ski? Anyone have recommendations on things still open?” a Facebook user asks.
“Stay home!” another user replies. The Facebook group called “What’s Going on St. Thomas?” has been flooded with pointed, exasperated comments urging travelers to stay away. This is a marked change. Before the pandemic, the exchanges between vacationers and island residents resonated with promises of excitement and fun. Now, tour operators from the mainland who administer the Facebook page quickly try to delete any expressions of anger. In nearby Puerto Rico, the friction has spilled into real life. Media reports have detailed multiple episodes in which tourists, having escaped pandemic restrictions back home, became violent and destroyed store merchandise after being asked to wear a mask. The COVID-19 pandemic has pitted economic interests against public health guidance all across the United States. Puerto Rico and the Virgin Islands feel this tension acutely, as both U.S. territories rely on tourism to generate revenue and provide jobs. Increasingly, locals have begun to wonder now if welcoming visitors to these islands is worth the risk. Tourism represents more than half of the Virgin Islands’ gross domestic product. In Puerto Rico, the industry accounts for 80,000 jobs and about 6.5% of the island’s total economy. But islanders are not only vulnerable to COVID-19’s economic disruptions. Residents of both Puerto Rico and the Virgin Islands are diagnosed with chronic health conditions like diabetes and cardiovascular illness at higher rates than in most U.S. states, which puts them at higher risk for the virus’s complications. In short, the very industry that represents an economic lifeline for islanders threatens their ability to protect their health. When COVID-19 triggered alarms in late winter, Puerto Rico and the USVI adopted strong COVID prevention strategies before most U.S. states did. In Puerto Rico, Gov. Wanda Vázquez issued an executive order March 15, effectively locking down the island by imposing a curfew, a stay-at-home order and business closures. The first coronavirus cases on the island were reported March 13. Similarly, Virgin Islands Gov. Albert Bryan Jr. issued executive orders prohibiting hotels, villas and other accommodations from accepting leisure guests between March 25 and June 1. The area remained open to business travelers, flight crews, health officials, emergency personnel, government guests and residents. According to a March 20 Department of Health update, the territory had — at that time — six confirmed COVID cases and 43 pending test results. Neither territory, however, was able to close its airports. Local officials do not have the authority to do so because the federal government regulates aviation. “Part of the challenge of being a U.S. colony, in particular, is that, you know, we don’t have control over our borders,” said Hadiya Sewer, president and co-founder of St. JanCo: the St John Heritage Collective, a cultural heritage preservation and land rights organization on the small island of St. John, U.S. Virgin Islands. Still, the aggressive measures — while effective — came at a price for residents like Melina Aguilar. Before the lockdown, the 31-year-old entrepreneur worked as a tour guide for Isla Caribe, a company she founded that offers historical walking tours of Ponce, Puerto Rico. The stay-at-home order in March shut down Aguilar’s business for three months and sequestered her in her house. Aguilar said the sacrifice would have been worth it if the island could have maintained control of the spread by closing the border and enforcing the 14-day quarantine for travelers. It didn’t work out that way. According to data from The New York Times, the seven-day average for cases on May 1 — while Puerto Rico was still in lockdown — was 42 cases per day. On July 1, the seven-day average was 102 cases. By July 15, the average was 233. “We could’ve basically had the fruits of being locked up for three months,” Aguilar said. “But now we’re stuck.” Reopening the Gateway By summer, both territories were itching to get back to business. With many overseas vacation destinations banning U.S. travelers, it seemed like the nearby mainland would be full of beachgoers, who, after living under stay-at-home orders for months, would be ready to travel — no passport required — to the sun and sand. The U.S. Virgin Islands formally welcomed tourists back to its shores on June 1 — with caveats. Travelers from coronavirus hot spots needed to submit COVID-19 test information through an online portal to receive a negative result “certification code.” Those who didn’t were required to quarantine for 14 days or until they had documentation of a negative test result. But locals and tourists alike said COVID enforcement measures haven’t been consistent. Capt. Matthias Bitterwolf, owner of Antillean Yacht Charters on St. Thomas, said he delivered a boat to Puerto Rico and was not allowed off the vessel until local police could verify his COVID paperwork. His COVID status was not checked upon returning to St. Thomas. The Virgin Islands’ case counts soon began ticking up. Between June and mid-July, the case count increased by more than 3,500%, according to one NBC news report. Gov. Bryan responded by issuing other executive orders to regain control of the outbreak, including prohibiting beach visits after 4 p.m. and not allowing patrons to stand or eat at bars located in restaurants. As of Aug. 24, the USVI had a total of 984 positive COVID-19 cases and 11 deaths. Puerto Rico formally welcomed tourists on July 15 while still imposing some COVID-related restrictions. As in the Virgin Islands, officials required travelers to present documentation of a negative COVID test result upon arrival. Dr. Victor Ramos, president of the island’s medical association who is involved with the island’s medical task force, said these decisions tended to expose the rift “between the medical task force that favors closing things and the economic task force that wants to leave everything open.” By July, the local economy was in shambles. The Department of Labor reported over 21% of the island’s workforce was receiving unemployment assistance related to the pandemic in the week ending Aug. 1. But rising case counts attributed to travel prompted local officials to encourage that only essential travel be allowed. As of Aug. 24, the island had recorded over 30,700 COVID cases and at least 395 deaths, according to the New York Times database. Government data, though, indicated Puerto Rico’s climbing case numbers were not being triggered by tourists. They are not the culprits, insisted Leah Chandler, chief marketing officer of Discover Puerto Rico, the island’s official tourism website. Rather, the spread was linked to island residents coming home after visiting COVID hot spots like Texas and Florida. Life on the Ground Despite the global pandemic and the restrictions, both territories have experienced no shortage of vacationers. “We would have expected this to be a slow moment for us in terms of tourism,” said Sewer. “It’s very busy.” Still, the trend lines for COVID case counts weren’t moving in the right direction for either territory, so it was no surprise when Puerto Rico closed days after reopening and the USVI followed suit on Aug. 19. The underlying socioeconomic and health issues put residents in both places at high risk. It’s not just the prevalence of chronic health conditions like diabetes and cardiovascular disease. The high number of multigenerational households in both areas complicates a family’s ability to socially distance from its most vulnerable members. Roughly a quarter of the population in Puerto Rico and the Virgin Islands is age 65 or older, and poverty is widespread. At the same time, both territories have limited health care infrastructure — making it difficult to envision that they can care for their own populations in an emergency let alone visitors who could become ill and island-bound if the virus were to surge. Currently, the USVI has two main hospitals — one in St. Thomas and one in St. Croix — and a health clinic in St. John. The territory has 20 intensive care unit beds and about 100 one-time-use ventilators for its 106,235 residents, said Justa Encarnacion, the USVI’s health commissioner. Each island has about 30 full-capacity ventilators. In Puerto Rico, about 60% of the island’s ventilators for adults were available as of Aug. 24. However, ICU beds are harder to come by, said Ramos. They are filled with COVID patients and those whose conditions worsened after avoiding care out of fear of catching the virus, he said. The string of problems that have besieged these islands magnifies the effects of the pandemic. That includes debt crises and infrastructure damage from hurricanes and earthquakes. Island residents also fear the possibility of battling a hurricane and a coronavirus outbreak at the same time — a reality that they’ve already confronted when COVID hampered the USVI’s emergency management agency’s ability to distribute sandbags ahead of a storm in late July. Colorado State University hurricane researchers predict an “extremely active” 2020 Atlantic hurricane season. “At this point, we literally have disasters layered on top of disasters,” said Sewer, of the St. John’s Collective. Still, Joseph Boschulte, tourism commissioner for the Virgin Islands, is cautiously optimistic about finding a balance between health and economic interests. “We appreciate the concerns of our tourism partners and stakeholders,” he said. But with the spike in cases, he said, “we must reset, take stock, safeguard human life and prepare for restarting our tourism economy at a later date.” Destination Analysts recently released the results of their Wave 23 Coronavirus Travel Sentiment Index Report for surveys conducted between August 14th and August 16th. The survey was of a sample of 1,203 adult American travelers. The results are accurate within plus/minus 2.8%.
During two recent back-to-back conferences, Adam Sacks, President of analytics firm Tourism Economics, discussed the economic state of the nation and how a pandemic, a recession and closed borders are affecting travel-related businesses.
“This year will indeed be a year to forget, with unique challenges that we've not faced before,” he said as he kicked off his presentation during the Asian American Hotel Owners Association conference. Citing data compiled for the U.S. Travel Association that tracks monthly travel spending by both domestic and U.S. inbound travelers, Sacks said the industry hit its nadir in April with a 90 percent drop in travel. “That's basically a life support, standstill situation,” he said. The situation has improved every month since then, with July reaching a 55 percent drop from the previous year—“which still is dramatically bad, but I think that we can say that the worst is behind us and that performance does continue to improve around the country.” The lodging sector, Sacks continued, has made continual improvements as it responds to the crisis. “But the disparity—by different segments, by different property type—has perhaps never been as great,” he said. Looking at STR’s data for June, he noted that the economy, midscale and upper-midscale segments are outperforming the luxury and upper-upscale classes. “That reflects a number of things," he said. "It reflects the concentration of those higher-end properties in cities. [It] also reflects the exposure to groups, and group demand, of course, has fallen to almost nonexistent levels over the last five months.” Another determining factor is location, with destinations that have strong outdoor activity options attracting road trippers. “Occupancy rates are highest in some of those rural Midwestern and beach destinations, and they are lowest in those destinations that are really anchored by urban markets,” he said, citing Mississippi, South Dakota, Idaho, Delaware—“as a beach destination”—Wyoming and Montana as markets to watch. Economics & Travel During a presentation at the Hotel Data Conference, Sacks discussed what the overall state of the American economy will mean to travel spend. “We've seen a nice rebound in the labor market over the last couple of months, but we're still by no means out of the woods,” he said. “We've seen steady recovery through the early part of the summer, but then it's leveled off—and that plateau is something that I think is a real concern.” With unemployment spiking in the spring, 1.8 million jobs returned to the labor market in July. “That's wonderful,” Sacks said, “but we're still down 13 million jobs from where we were in total nonfarm payroll employment. So, you can see how far we've fallen, but I think, notably, how far we have yet to go before we're anything like where we were in the beginning of the year.” Unemployment and the resulting loss of income, of course, affects consumer spending, consumer confidence and business activity—including travel, Sacks said. Even with unemployment claims declining, there are still 30 million Americans out of work right now. “Clearly, we've got a lot of healing to do, and in terms of unemployment claims, we're not seeing an indicator that's telling us things are repairing in a very brisk manner.” Looking Ahead Tourism Economics expects U.S. travel spending this year to fall 45 percent relative to last year, largely due to a lack of international travel: “We expect spending from international visitors to the U.S. to be close to 80 percent down on a year ago, with domestic picking up some of the slack.” Spending should recover to within about 7 percent of 2019’s levels by 2023, he continued. “We don't quite get there in 2023, but it's at least within sight at that point.” Domestic travel likely will dominate the industry for a while, he said during the AAHOA conference. “We are officially in the rebuild phase of international borders in terms of policy,” he said, adding that while the U.S.-Canada border could reopen by the end of the year, other borders will be much slower to allow crossings. “And even if they do, the reality is that there's not a lot of pent-up demand travel to the U.S. right now due to the state of the virus,” he added. The overall economy likely will contract 4.2 percent for the year, he said, but predicted a “nice pickup in economic activity” toward the latter part of this year and into 2021. “But the reality is that even as the economy accelerates, it's going to be behind where it would have been,” he cautioned, noting that large-scale events may return by the second half of next year. This could bring in more international travel. “So, we're looking at a full year out before we begin to see ... these segments begin to really recover.” The Covid-19 pandemic continues to cripple Thailand’s vital tourism sector, with provinces that rely the most on tourism revenue, being hit the hardest. Thailand may have managed to contain the Covid-19 virus, but at the expense of its economy going into a free fall with the southern resort province of Phuket exemplifying the downturn.
Phuket businesses, which rely almost exclusively on foreign arrivals for tourism income, cannot estimate when the island’s economic crisis, the worst ever, will be over. Firmly positioned as a world-class destination, Thailand’s largest island has earned vast revenue from foreign tourists, many with deep pockets. So when an unpredictable factor such as the Covid-19 pandemic forcing border closures and halting flights, Phuket’s income has slowed to a trickle, with its local economy at risk of a total meltdown. The situation couldn’t more stark than in the popular party town of Patong. Usually a thriving and bustling tourist Mecca, full of bars, restaurants, souvenir shops, expensive markets, massage shops and Thais hustling the foreign tourists for tours and ‘deals’. The entire town exists as a seaside city designed to efficiently extract tourist dollars from the pockets of foreign visitors. Now it’s mostly a ghost town, certainly a much humbler and quieter city of closed shops and barren streets. A few hotels re-opened when the lockdown was lifted. Many have shut again since. Phuket’s tourism sector employed 323,219 people locally before the virus struck in January, generating 245 billion baht (US$7.79 billion) in its annual gross provincial product, according to the new provincial governor Narong Woonsew. He says a whopping 80% of the province’s economy relies on tourism. The damage to the province’s tourism sector from impacts of the outbreak is estimated at 160 billion baht so far. Tourists visiting Phuket this year are predicted to shrink to 5 million or probably less, down from last year’s 14.4 million. Of those, 1.5 million will be Thais. Governor Narong says the situation is prompting a rethink of the province’s economic advancement strategy. “After the government ordered the closure of our skies, Phuket’s tourism revenue was wiped out.” Even when tourism resumes under the “new normal” practices, there will have to be a paradigm shift in the way the province determines where it will derive its income. According to Narong, the provincial office and tourism companies are looking to diversify and promote a variety of sectors to drive new growth. 6 sectors have been earmarked; marinas, education, health and wellness, seafood exports, gastronomy as well as sports and events businesses. (The island’s marinas mostly serve as expensive parking garages for infrequent visits of the boat owners, or as a jump-off point for some of the more exclusive island tours. The booming international school scene was merely a response to the large foreign employee contingent who wanted a quality education for their children. The ‘wellness’ scene has suffered over the past 3 years with a strong Thai baht and expensive private hospitals pricing themselves out of a competitive regional market.) “These will be our new economic engines which will function alongside the conventional tourism businesses,” the governor said. Phuket is home to 5 marinas, 38 seaports and a deep-sea port. About 1,500 yachts and cruise ships visit the province each year on average. As for education, the province is looking to create internationally accredited study programs to increase enrollments of foreign students. Already the location of 12 international schools, Phuket has set a yearly revenue target of 2.1 billion baht (US$66.8 million) from 3,600 students. For tuna exports, the future looks bright. Phuket has both state-run and privately-owned wharves where more than hundreds of boats from Japan, Taiwan and the US arrive to buy top-grade tuna at high prices. The exports are worth 1.3 billion baht a year (US$41.3 million) The gastronomy industry is a lucrative revenue stream which capitalizes on the island’s unique food culture at its nearly 2,000 restaurants. Annual turnover of the sector is estimated at 91 billion baht (US$2.89 billion) with more room to grow in the future. Phuket is currently preparing 3 major events to promote tourism, with the minister of commerce overseeing the campaign. The events will start with the 5-week Phuket Seafood & Gastronomy Festival in August and September, followed by a surf competition in September, and concluding with the traditional Vegetarian Festival in October. For now, it remains unlikely that many foreign tourists will be able to visit the island end enjoy any of them. Having dodged Hurricane Douglas, Hawaii is back to the drawing board once again, trying to figure out a way to spark tourism and infuse some life into its struggling economy.
Many had hopes that the State’s mandatory 14-day quarantine would be lifted August 1st, reopening the doors to visitors and resuming some sense of normalcy. But the quarantine was recently pushed back, at least another month, to September 1st. That leaves many hotels and tourism businesses in limbo once again, and a new idea has surfaced: If visitors have to quarantine, why not do it at a resort, and frame the trip as such? According to West Hawaii Today, that’s what resorts on Maui, Big Island, and Kauai are contemplating. “[It’s] another idea we’ve been tossing out there,” Hawaii County Managing Director Roy Takemoto said. “They would be allowed to stay at selected resorts and the resorts would control where the visitors would be allowed to range.” Here are some details about the new idea: It’s Mostly About Marketing Up until now, visitors arriving in the islands had to quarantine in their hotel room by law for 14 days. So, the only thing new here is that it expands a visitor’s range a bit: Instead of having to stay within their hotel room, they can now roam the property of the hotel as well. But what the discussion of this suggests is that the State, and perhaps the resorts individually, would begin to market the quarantine concept as a vacation package of sorts, one that’s worthy of your time and resources, a “get away from it all” kind of pitch. Visitors Would Be Quarantined by a ‘Geofence’ at ‘Select Resorts’ If implemented, the program would allow “select resorts” to operate a “resort bubble” and track the movements of their guests via a “geofencing” system, which would presumably sound alarm if anyone ventured off property. There are no details about how resorts would be fairly (or unfairly) “selected,” or how tracking would take place, but guests would have to agree to be tracked in order to book a stay. Complications Won’t Go Away This idea would still run into the same complications every other idea has had: With testing results taking up to a week and many cases of the virus asymptomatic, there is no way to guarantee safety within the resort bubble. With more employees coming back to work, they too could bring the virus with them. One positive test could be detrimental to the experiment - what then, would you do with the other guests? And, of course, there will always be those who refuse to abide by the rules. Would Guests Have to Stay a Full Two Weeks? Another major unanswered question is whether guests would have to commit to a full 14-day stay, or whether they simply have to remain quarantined at the resort for their specific length of stay. If they can stay for less than two weeks (the mandatory quarantine time), would they have to go directly to the airport upon checkout, or would they be allowed to move on and quarantine elsewhere for the remainder of the 14 days? How would that be tracked? According to the tourism board statistics, the average length of stay in Hawaii in 2019 hovered between 9 and 10 days, so it remains to be seen just how much of a market there would be for this kind of offering. And, obviously, there are still many unanswered questions, so, in reality, we’re probably not close to any big decisions here. In the five months since the COVID pandemic started, the industry has seen a wave of research taking the pulse of leisure travelers and their desire to venture out again.
Some reports show a large percentage of travelers being extremely fearful, while a substantial minority aren’t even interested in venturing out locally. Still other surveys show a large swath of Americans eager to travel, viewing the Coronavirus as more of an impediment to traveling, but not a wall that prevents them from taking their next vacation. One of the most consistent polling firms following the shifting mindset of the American traveler has been The Harris Poll, conducted by the globally famous company which has built its credibility on years of surveying Americans on a variety of issues. According to the Harris Poll’s latest group of respondents, surveyed July 2-4, one out of four Americans would stay in a hotel immediately after the government says the virus has been flattened, while one out of five Americans would take a flight. Sixteen percent would take a cruise fairly immediately. Another poll, commissioned by the American Hotel and Lodging Association (AHLA), shows that 57% of Americans expect to take an overnight vacation via car, in the next three months, versus only 17% on a plane. Nearly one out of five (18%) Americans say they are planning an overnight vacation of some kind in a camper or RV in the next three months, while only 7% said they were planning to take a cruise in that time-frame. Steve Cohen, founder and managing partner at Stelico Consulting Group, LLC, an Orlando-based data intelligence company, is concerned that too many travel industry entities are producing polls more for obtaining media impressions than for providing intelligence to the travel industry. “When I look at these results, I wonder, what are you really telling me here?” said Cohen, who was especially critical of one-time surveys that have no reference points for previous years. “If you’d asked the question last year, where’s the comparison before anyone heard about Coronavirus?” The Harris Poll is into its 19th Wave of surveying American adults, shows that for certain travel categories, the initial consumer confidence in traveling has waned somewhat. For example, back in early March, approximately 40% of adults were comfortable taking a flight within a three-month window of the U.S. government declaring the COVID “curve” was flattened. Today, that share of American adults has dropped to 30%. At the same time, the 20% of adults who were saying that they would wait a year or longer to take a flight has grown to 31% “When this first started, most of us believed we would shut down the economy, and we’d flatten the curve,” Cohen said. “But that hasn’t happened, so it’s no surprise that the people who were taking the virus more seriously then, are taking the virus even more seriously now. And the people who were always willing to travel, still want to travel like they wanted to at the beginning.” Still, Cohen cautions travel advisors about taking too much away from any company’s surveys, because travel booking behaviors likely will change if there is a change in the nature of the virus. “If we see another large jump in new people getting the virus, or a large jump in deaths, that could change everyone’s opinion,” he said. “As the number of new COVID cases increases, there is a corresponding decrease in bookings to major destinations,” said Bruce Rosenberg, President, Hotel Planner & Meetings.com. Where do consumers feel safe? Digging deeper into the AHLA survey, there is some indication that consumers trust traditional hotels more than they trust home shares [e.g. Airbnb, VRBO] in this current environment. Some 71% of respondents said they would be interested in staying in a hotel for their next trip, versus only 46% interested in a “short-term rental.” In fact, the accommodations most consumers are comfortable with are “staying overnight with family or friends” (79%). Cohen advises advisors to try to understand what their clients are thinking, because assumptions might not be accurate. “There’s two sides to the decision of where to stay,” said Cohen. Some people might be more comfortable staying in a home share because it means limited interaction with other guests. There might even be some remoteness if you’re booking a home away from even a mountain resort destination. But if I go to Hyatt, I understand what they tell me the safety and cleaning protocols are.” Cohen believes the AHLA results might also reflect the respondent’s travel history. “Do I know enough about vacation rentals to speak knowledgeably about them if I have never stayed in one? More people have stayed in hotels, so they have the experience to make them feel more comfortable with their assessment.” If an advisor is interested in trying to book road trips for their clients, how far might travelers be willing to drive? According to the AHLA survey, some 20% want to drive less than two hours, 35% will drive 2-4 hours, but 40% would be okay with driving four hours or longer. Also, most of the AHLA respondents said they are looking for two-night stays (33%), while 19% are interested in 3-night stays, and 14% are looking for four nights away. Interestingly, 16% would be interested in a stay of 5-7 nights, and 7% are interested in 8 or more nights. July 24, 2020 | Report McKinsey Consulting With the opening of borders and the relaxation of travel restrictions in most of Europe in mid-June, we are seeing an initial restart of the travel industry. Hotels are reopening, and airlines are resuming flights on a reduced but regular schedule. Majorca, one of the most popular destinations for German vacationers, was allowing a limited number of German tourists as a part of its trial reopening. The restart of travel after the COVID-19 lock-down raises many questions:
These myriad open questions reveal the intense uncertainty associated with both what post-COVID-19 vacation travel patterns will look like and how companies in the industry, such as public tourism authorities or accommodations and transportation providers, should respond to the changing tourism landscape. Our already available reports bring together lessons learned from other countries, especially China, analyze scenarios for the recovery of US hotel occupancy, and together with IATA provide ways to track and understand demand recovery. In this report, we draw upon the insights from our proprietary travel dashboard, developed in partnership with trivago. We identify and quantify key emerging travel trends, discuss their impact on vacation travel patterns, and provide guidance on how travel industry players can utilize data insights to manage the resulting situations. There is no doubt about ambiguity within the industry and the limited data transparency to understand demand development. At the same time, the travel industry needs to look beyond the challenge and see the opportunity. Eight trends shaping the post-COVID-19 travel market While there are several individual anecdotes and even more opinions about how the crisis has shaped the travel market, data and empirical evidence have been limited so far. That said, observations from recovering travel markets may demonstrate early patterns, giving travel players a head start. We chose Germany as a reference point due to its position as the largest European and third-largest global international travel market, and the fact that its metrics are commonly seen as leading the recovery curve. Eight important—and, in part, mutually reinforcing—trends that have emerged during the COVID-19 crisis can be observed. 1. Travelers are showing increasing appetite for and confidence in travel During the lockdown, search volume dropped to only about 10 percent of the pre-pandemic volume, and actual click-outs (redirections to provider websites) dropped even more sharply. Today, search volume is up to 55 percent of where it was at the beginning of the year, and the conversion rate has been almost fully restored: about 99 percent of the rate from the beginning of the year. 2. Domestic travel is outperforming international travel for the first time Historically, search volumes from January to July favored international destinations about 27 percent higher than domestic ones. The earlier opening of the domestic market while international restrictions remained has reversed this trend, giving domestic travel the lead. In fact, June showed about 36 percent higher domestic demand than international. 3. Last-minute bookings are gaining in importance Potentially due to the uncertain epidemiological situation at the peak of the crisis (April to May), travelers had been planning both their domestic and international travel for later in the summer. The lifting of restrictions, which went into effect on June 15 for European countries, appears to be behind a surge in last-minute bookings. This year’s share of June and early-July travel bookings with a start date within 30 days after booking has exceeded the respective share of June and July 2019 bookings by 7 percent. 4. German travelers stick to their favorite pre-COVID-19 destinations abroad Two of Germany’s neighbors, Austria and the Netherlands, are among the most popular international destinations as travel resumes. Search volumes and conversion rates for both countries have been growing since May. This may be due to the ease and perceived relative safety of travel to these countries. Nevertheless, German travelers’ current list of top vacation destinations extends well beyond the border and even includes countries severely hit by COVID-19 such as Italy, Spain, and France. 5. Travelers are turning to German seaside alternatives Among domestic destinations, the attractiveness of Germany’s coastal regions (Mecklenburg-Western Pomerania, Schleswig Holstein) has increased significantly. Along with mountain and other nature-focused regions, domestic coastal destinations have been considerably more in demand since the outbreak of the crisis. 6. Longer trips gain in popularity Demand for longer trips (more than seven days) has not only recovered but has exceeded pre-crisis levels. Demand for one- to two-day travel, despite a dramatic recovery since May, is still around 63 percent of where it was at the beginning of 2020. Considering the financial impact of the crisis, it is possible that travelers are choosing to skip weekend getaways in favor of longer summer holidays with their families. 7. Demand for vacation homes nearly doubled during the crisis The total demand for vacation rentals increased during the crisis, up approximately 78 percent from March 2020 to its peak in May. For domestic travel, the demand even more than doubled during its peak in May 2020 versus March 2020. We saw the overall share of vacation rentals begin to decline in June as many hotels resumed operation, but the share remains significantly higher than it was pre-crisis. 8. Despite a drop in prices, travelers’ willingness to pay for nature-oriented destinations remained almost unchanged An analysis of price development since March determined that though travelers were mostly offered lower prices, they were still willing to pay 2019-level prices or higher for mountain, coastal, and other nature-oriented destinations. By contrast, travelers headed to city destinations, which are more dependent on a mix of business and leisure travel, were more price sensitive. These travelers paid less than they did last year. The current COVID-19-related developments and dynamics in the travel industry are unprecedented, but there is little empirical data to point to the drivers of these shifts in the market. However, analysis shows that certain patterns and “industry rules” still seem to be valid when combined appropriately. It goes without saying that many players in the industry are currently being forced to rethink their business models and improve their adaptivity to quickly changing external events. Those that can do so will be well positioned to identify, utilize, and benefit from new opportunities. Understanding destination attractiveness can help industry players navigate these uncertain and continuously changing times. Our approach in this analysis could extend to other countries of origin (for example, the United States), destinations, detail levels (for example, the US at state level), as well as additional time frames and circumstances even beyond the here and now of the COVID-19 crisis. For full 19 page report including three cases studies click below.
“No crystal ball can tell us what the future of travel will be, and we will not find the right solutions to today’s fluid situation overnight. This will take time, patience, and probably many attempts as we learn together. But travel companies need to embrace the challenge to come back better.” That’s how McKinsey & Company research and consulting firm ended its most recent look at the travel industry, which it titled “Make it better, not just safer: the opportunity to reinvent travel.” In the piece, researchers, while calling the COVID-19 pandemic a “crisis” for the travel industry, also proclaimed that now is the time for change in the industry, a time not only to improve health and safety measures, but to make travel more exciting to increasingly unsure consumers. “Travel companies need to excite and attract consumers as well as reassure them,” McKinsey wrote. “To achieve this, leaders should focus on making travel better—not just safer—which means giving travelers more control, offering greater authenticity and personalization, and taking a customer-centric, agile approach.” While the piece focused on the travel companies and suppliers who will be altering and changing operations as the world moves through the pandemic, there are key points that advisors should look at in order to keep their business healthy, and clients engaged, during the COVID-19 period. 1. Continue improving on pain points that existed prior to COVID-19. Part of that, McKinsey said, is to recognize that the bad parts of travel, the common pain-points that hung around travel discussions prior to COVID, are still there. The firm mentions better customer experience at airports, which were underway prior to the pandemic, as something that won’t disappear with the virus. Also, the “high-anxiety purchase journey for flights and lodging, meaningful purchases that often cannot be returned” will remain and could only get worse. That’s an issue, however, that will not be a problem for the consumers who are using a travel advisor to book their trip, or those who choose to use that booking path upon returning to travel. Some major changes that travel companies are seeking would be difficult to do so in the current economic environment, but “the good news is that some of the necessary changes will require no significant capital outlay but instead a change in mindset toward customer experience.” 2. Listen and be flexible. In the piece, researchers found that “companies that surpass their peers in customer-experience design tend to share a set of features,” including having teams that design and deliver the kind of customer experience that not only makes consumers feel comfortable, but safe, will be the ones to earn back consumers’ trust the quickest. “Cross-functional agile squads that break down traditional silos and collaborate more efficiently can help their companies move quickly to address changing traveler needs across the journey,” McKinsey writes. Being able to replicate the experience that customers want and moving quickly to “address changing traveler needs across the journey” is key for travel companies and advisors alike. The world is going to change, and companies and travel advisors who are ready and willing to adapt to that change will be the ones that succeed. 3. Personalization still matters. Something else McKinsey believes is going to not only remain important, but proliferate, is the shift to a more personal experience—another boon for advisors competing with OTAs. “Before the crisis, personalized and unique experience constituted a dominant trend. Boutique hotels, for instance, were the fastest-growing hotel segment in the United States.” Personalization post-COVID will be taken a step further, as companies are looking for new ways to connect. The piece mentions how some hotel staff were calling first responders who were quarantining in their hotels during COVID, and airlines addressing passengers pre-flight away from the typical pilot script, as some examples of a more personalized experience. It’s not more marketing, either, as “mass emails from the CEO can only go so far, and consumers are already reporting fatigue around ‘we’re all in this together’ messaging,” instead it is making sure clients know they have a real person on the other line who will go “out of their way to solve traveler needs rather than just optimizing against the competition.” For full report click below.
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Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics. Archives
September 2020
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