Coronavirus: a matrix helps to face challenges in Travel
Nowadays, the global economic scenario is facing a very important challenge, sadly connoted by a medical emergency that everyone knows under the name of Coronavirus (COVID-19).
The Travel sector is being strongly affected by this. As reported by Bloomberg, the negative impact on global tourism doesn’t seem to stop – but instead, it seems to grow.
It is reported that, by now, around 75% of tourists cancelled their trips and stays planned for February and March in the south-east of Asia – for sure, also due to the measures adopted by each Country – fearing the virus or to get isolated during a stopover. Unfortunately, according to Bloomberg, the negative effects of the epidemic could protract at least until 2021.
The “Study on the Competitiveness of the EU tourism industry” of the European Commission gives the operators of the Travel industry an interesting analysis to develop effective strategies to face the times of crisis, as the one we are now going through.
The study offers a matrix that assumes how the tourism demand can be influenced by different factors – also negatives, of course. As a result, we have four possible scenarios, which include different uncertainty variables. The matrix includes two fundamental variables: the energy price and the global economic growth.
Source: “Study on the Competitiveness of the EU tourism industry”, European Commission: Directorate General Enterprise and Industry – Tourism Unit, 2009
Although a global medical emergency is not included in the variables, the matrix offers useful scenarios which can be applied to different situations, including the current one.
The first scenario, called “The world is our village, the sky is the limit”, represents the best situation for the Travel sector: the favourable conditions guarantee more travels to more people, free movement, longer stays, growth of non-mass tourism destinations.
In the second scenario, called “Europe as a backyard for low cost travelling”, the high price of energy brings tourists to ask for low-cost travels and, in the leisure segment, to prefer destinations that are closer to their home. Business segment keeps on growing.
In the third scenario, called “More price/quality-conscious travelling”, low energy prices are driving the growth of the sector – even though more moderate than the first scenario. In this situation, leisure grows at the expense of business: lower disposable income brings tourists to look for quality travels, that worth the expense, and with a good value for money.
The fourth scenario, called “The balcony experience”, is the most discouraging one, and is characterised by weak global economic growth and high energy prices. There are grounds for a balcony experience, meaning for shorter and closer trips.
At Twissen, applying the matrix with different factors – as the study itself specifies – we observed that the most similar scenario to the current situation is the balcony experience one, where the medical emergency is limiting the travel possibilities. A winning strategy for travel operators could be focusing on geographically closer targets, proposing experiences that can justify short-haul trips.