The future of tourism: Can Mauritius navigate between early recovery and the new normal? (Parts I, 2 & 3)

30 novembre 2020, 11:23


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Part 1

The Covid-19 health pandemic is an unprecedented event that has devastated economies around the world, disrupted lives, livelihoods and businesses and decimated the travel and tourism industry. Mauritius has not escaped this immediate and immense economic shock and destruction with ripple effects beyond the sector itself. Equally, it is very likely that the future of travel and tourism will be different from what it was pre-Covid-19 as the mindset, inclinations, behaviours and attitude of travellers change, thus affecting both the demand and the supply sides.

Ensuring bounce back and long term resilience after induced coma

OUR tourism supply chain has been shaken to its core. The direct, indirect, induced and catalytic impacts of tourism is such that the effects will reverberate both downstream and upstream along the value chain for a long time. Many years worth of industry growth has already been lost. While some businesses will come back, there will be some permanent scars and structural damage to the industry.

The sector is currently still in an induced coma phase with collapsed revenue and under life support with a combination of financial assistance from Government, significant cost containments, deferment of loan payments and rising indebtedness to help businesses withstand the crisis. This is clearly an unsustainable predicament both for government and the operators. Policy makers and stakeholders must start focusing on what it will take in terms of an action plan to enable a recovery for financial reasons and a blueprint to rethink the future of tourism in a new post-Covid-19 environment.

With declining consumer demand, the recovery will be complicated, unstable, weak and lengthy. Demand is unlikely to recover anytime soon. As a tourism-dependent country, we face a formidable challenge, as people are in very uncertain times and businesses in survival mode. Because the travel and tourism sector is the worst hit by the sudden, deep and prolonged downturn, there is an economic and financial imperative to lift restrictions so as to potentially go back to how it was before as fast as possible, even if the industry was not without its structural problems before Covid-19. It is argued that we have to learn to live with the virus. Understandably, this is the preferred choice of airlines and hoteliers which hope that travel will normalise quickly and will make a major comeback once a trusted vaccine or a safe and an effective therapy is widely available;

At the same time there is a compelling case to embrace projects, policies and strategies to prepare for the new normal as the industry will be fundamentally and structurally different in the medium to long term. The mindset, inclinations, behaviours and attitude of both tourists and business travellers are changing. The Covid-19 health crisis will affect consumer willingness to travel and destination preferences. This will impinge significantly on both the supply of and demand for travel and tourism. Also, airlines, airports, hotels and cruise lines will all have to adhere to new guidelines about social distancing, mask- wearing, enhanced sanitization, temperature checks, food service and other health protocols.

In short, after the current suspended animation of the tourism industry, the country has to work on both a recovery and a resilience action plan. We should envision a balanced and a co-ordinated policy roadmap to rekindle the industry and also consider the longer term implications of the crisis and propose an innovative strategy to shape the tourism of tomorrow.

Lack of policy content and substance for recovery and transformation

The priority for the sector is to resume operations as early as it is safe to do so, but re-opening will just be the start of a challenging recovery. All countries are in this pandemic for the long haul and it has already changed the face of life as we know it. However it also provides a chance for a much-needed introspection and a unique opportunity for government, private operators and other stakeholders to re-imagine, reinvent and reset what tourism should mean for the country. There is a constructive case to rethink the tourism of the future so as to build back better, be stronger and more sustainable and resilient as Covid-19 reshapes the landscape significantly.

Unlike some countries, Mauritius currently suffers from a double policy deficit. First, we have not yet crafted a viable strategy with clear measures for the safe and orderly restart of tourism. There is neither policy content, nor substance. There is complete uncertainty on when and how borders will open, what health protocols will be in place, what is the fate of the national carrier, what promotion and marketing strategy will be pursued and which destinations will flights originate from ?

Second, we have not even started preliminary discussion to fully understand the factors that will drive the future of the industry and grasp how the evolving structure and character of the hospitality and business travel will change as a result of Covid-19. So as to facilitate informed decision making among both the public and private sectors as they navigate the effects of the pandemic in the short and medium term and come out stronger from the process. Experts believe that the pandemic has changed travel and that there will be a new normal. However, finding out which changes are permanent is more difficult as we simply do not know how to predict the new and uncertain future of travel and tourism. There are not only many unknowns and but also some unknowables on the trends that will underpin the industry and their implications for the sector.

Searching answers for some 25 questions with blue-sky thinking.

There are some probing questions that must be answered in order to craft a recovery and resilience tourism strategy. Some of them are as follows:

1. How long will it take to reignite the engine of the tourism industry?

2. What will be the pace and shape of the recovery?

3. How will the new health and sanitation protocols impact the sector?

4. Will the health crisis permanently change the mindset, behaviours, attitude and inclinations of people and the way they travel for leisure?

5. How will consumer willingness to travel and destination preferences be affected?

6. Will business travel suffer as executives resort to video conferencing to replace in person meetings?

7. Will cruises decline as tourists opt for lower risks, less crowded spaces and more health safety?

8. Will MICE be severely impacted as virtual events take hold?

9. Will there be a shift away from long-haul destinations to domestic and regional vacations?

10. Will people develop a preference for villas and private accommodations against traditional hotel rooms to avoid crowded space and pay more attention to privacy, health and safety?

11. Will demand for longer stay tourists rise with retirees and entrepreneurs seeking safer and more secure destinations?

12. Will outdoor activities become more important in the short to medium term?

13. Will there be an acceleration of health and wellness in the tourism space?

14. How will technology and digital applications affect the travel and tourism industry both from the supply and the demand standpoint? Including marketing, distribution and promotion.

15. What will be the future of the travel agency business after Covid-19?

16. Will travel become unaffordable for many as cost rises and disposable income shrinks?

17. Should Mauritius go for a truly low volume, high value strategy? With fewer but quality, value- added and long-stay tourists?

18. How will the near demise of MK affect the recovery and resilience of the industry?

19. Will there be a reliable and viable national airline to support tourism as MK used to carry a very high share of tourists?

20. Will the tourism industry be smaller in terms of employment and revenue?

21. Will there be medium term consolidation in the industry as vulnerable players go under?

22. Will the sector be vertically integrated with larger firms offering multiple services along the supply chain?

23. Should policies reflect more on the impact human activity has on climate change, including how people travel and enjoy holidays?

24. What type of coordination, collaboration and cooperation is required between the public and the private sectors to prepare recovery plans, rebuild the destination and chart out a new pathway for the entire tourism ecosystem?

25. And last but not least, is this a wake-up call to comprehensively rethink the tourism industry? By articulating a new vision that redefines success in a more balanced way that goes beyond traditional growth metrics? So as to protect biodiversity, enhance quality of life, create quality and inclusive employment, foster a thriving local supply chain and an equitable distribution of benefits.

Frankly, responding to these questions will not be a walk in the park. However, we simply cannot avoid the exercise. It should be done thoughtfully, carefully and intelligently in an informed, disinterested and holistic manner. The strategy must be flexible and adaptable to meet changing circumstances. The country needs a frank discussion on what we should and should not do in terms of financial viability, environmental sustainability, resilience and inclusion. The thought process is complicated as there are no rules or playbook to deal with this seismic change and we simply cannot limit our analysis by the legacy of the past. Both the game and the rules of engagement have materially changed and it would be foolhardy to bury our heads in the sand and hope that the new normal will be akin to the old one.

We need some blue-sky thinking. While it may be too early to provide definitive answers, we should start wearing our thinking cap so as to be ahead of the curve to either avoid policy mistakes and/or to leverage opportunities that will arise in the new environment. By focusing on reigniting demand, revitalising supply and shoring up our resilience.

Part 2

The mindset and behaviour of travellers and their choice and inclinations will be affected by both psychological and economic considerations. The industry is expected to witness a shift with a greater focus on health and wellness. To remain attractive, relevant and competitive, destinations will have to improve their cleanliness, hygiene and sanitation standards. The sector should innovate and digitalize at a faster rate.

Tourists on Costa Romantica, in the cruise terminal of Port-Louis. The demand for cruises will fall because of higher risks of spreading the virus, says the author.

1. How the demand for travel and tourism will likely shape up postCovid-19?

Covid-19 is teaching us some important lessons. Some are advocating an early recovery from the economic downturn to go back to pre-Covid-19 situation. While this is understandable, it would be a policy mistake if done on a stand-alone basis. Economic leadership, strategic vision, and a capacity to anticipate to stay ahead of the curve is required. The pandemic has changed day-to-day life and will have permanent effects on the way people work, live, buy, eat, socialise, behave, travel and spend holidays. Reliance on more of the same is simply untenable. Historically, pandemics have forced humans to break with the past and build a new world.

We need to understand how demand and the structure and character of global travel are changing. The supply of and demand for tourism will be metamorphosed as the desire and ability to travel abroad change. The mindset and behaviour of travellers and their choice and inclinations will be affected by both psychological and economic considerations. There will be a fear of infection in the absence of an effective and safe vaccine or therapy. This will impact both the willingness and conditions to travel and the preferences for holiday destinations. The recovery of tourism will also depend on a broader economic bounce back. With staggering job losses and the global economy in a deep and protracted recession, many will not be able to afford to travel once restrictions are lifted. Even those who have retained their jobs may work for reduced hours and lower income and will less likely spend money on discretionary consumption such as travel and tourism.

Many specialists of the industry are predicting new trends in the travel which include preferences for domestic and short haul destinations closer to home and reachable by road and rail. People are discovering the beauty and wonders of their own countries and regions. Lodging will not necessarily mean hotels. The shift to villas, private homes and other non-traditional accommodation will accelerate to become one of the biggest permanent travel changes. There could be a decline in demand for larger commercial hotels as people shift to boutique hotels or private villas with fewer people and limited interactions. The need for space and privacy could be long lasting as tourists feel much more comfortable staying in these properties compared to hotels that have a high turnover of guests, and many people at check-in and check-out, in restaurants and other public places.

Many elderly will probably opt not to move around as before. Smart travellers will trust places with good governance and health systems. They will see this pandemic as a sign of what to come from the climate crisis. They will act like responsible citizens. Young people may be more adventurous and could become a new source of business in travel and tourism.

The industry is expected to witness a shift with a greater focus on health and wellness. The demand for more hygiene and sanitation in destinations will grow. It is already a trend in some countries and Covid-19 will speed it up. There could be a new wave of slow, smart and longer stay tourism with emphasis on extended experiences in Covid safe spots. Tourists could thus prioritise travel quality over quantity. There will also be an increase in the use of travel insurance which could become mandatory so as to mitigate risks. There will be greater recourse to professional travel advisors to seek detailed information on the suitability of destinations. People may avoid group tours, especially in enclosed spaces like tour buses while some could shift to outside activities to be far from crowds.

Business travel will likely take a long time to rebound as corporates face their own financial hurdles and turn to videoconferencing with Zoom and Microsoft Teams and improved tech innovations to conduct meetings with clients and colleagues. Some business travel may never return as companies realise that employees can be as productive virtually as they are with in-person meetings. Hotels will face challenges to attract large-scale meetings, conferences, conventions and exhibitions (MICE) as virtual events take hold. The demand for cruises will also fall because of the higher risks of spreading the virus. Group travel and destination weddings will suffer a serious setback while fewer students may travel overseas for higher education.

2. Reinventing the supply side and the enhanced role of innovation and technology

To remain attractive, relevant and competitive, destinations will have to improve their cleanliness, hygiene and sanitation standards. Countries with strong pandemic records will leverage them as tourism marketing strategies. Many health protocols will stay permanent and contact tracing could become standard for travellers, supported by digital applications. Some countries will redesign their tourism blue- print to keep down crowds and enforce stronger regulations to protect the environment. Hotels may have to review their design and physical infrastructure, adjust their offers and develop new products to respond to the changed travel behaviour and new preferences of travellers. Some will also invest in training and upskilling, in upgrades and in improved digital platforms to better position their product when the recovery picks up.

Technology will be an important game-changer. It will shape the way people travel and spend holidays. There will be an acceleration in the digitalisation of the tourism sector with as little human contact as possible and a greater adoption of touchless travel with paperless online booking, self-check-in services and contactless credit card readers. The cell phone will become the travel agency, hotel selector, tour guide, best restaurant locator, map, and more as many tourists use it for their entire trip.

New health safety protocols and systems will be in place. As governments and industry plan for recovery in this new context and adapt to changing traveller behaviour, the use of digital identity and biometrics technologies could restore trust while also ensuring a seamless journey. Automation across the entire sector will become the new norm. For instance, touchless travel from airport to hotel check in will be key so as to avoid exchanging travel documents and touching surfaces through check-in, security, border control, and boarding so as to mitigate the risks of infection. Digital health passports will ensure that health is embedded in every aspect of travel so as to increase passengers’ feelings of safety when travelling. The use of thermal cameras at airports will be more widespread while a number of symptom-tracking and contact-tracing apps will be adopted.

3. Reimagining the future of tourism: a daunting but necessary exercise

How long it will take to build back depends on the duration of the pandemic, the severity of social distancing restrictions and the effectiveness of government stimulus packages. Until the virus is under control and efficient and effective systems are in place to restore confidence in travel, it is difficult to predict when tourists will start bookings again and at what rate it will occur. It is al- so unclear how the industry will look like when Covid-19 finally recedes. Just like travel in many countries changed after 9/11 and the financial downturn of 2008, it will be different again after the unprecedented health and economic crisis.

The global bounce back will be slow with first a focus on domestic and regional tourism before a rising demand for international travel. Mauritius shall be at a disadvantage for three reasons. Due to the small market, the industry cannot rely on domestic tourism to revive businesses. It would also be difficult to form a regional travel bubble with neighbouring countries as the critical mass is not there and risks are high. And the dynamics of demand in many key source markets in Europe is such that the second wave will delay a bounce back in travel.

The crisis presents an opportunity to rethink tourism for a more sustainable and resilient future. We should address the structural problems of the sector, avoid the return to issues of poor tourism management and encourage new business models that embrace sustainability, digitalisation and resilience. We have to rebuild both the destination and the tourism eco system while supporting the industry to recover so as to meet new needs and lifestyles in travel. The sector should innovate at a faster rate while investments will be needed to make structural and physical changes to address health requirements and visitors’ expectations.

Tourists will travel again, but not by reverting to what it was, but by adjusting to a world where all activities and almost everything people do will have changed. Travellers must feel safe and confident that their health is protected. There will be some creative destruction as some business models will become irrelevant. Is there a case for some traditional hotel properties to change their business model to operate more like private villas, selling entire floors staffed with people providing more bespoke services?

There will be a rise in passengers wishing to travel directly to long haul destinations as opposed to making a layover at a crowded hub airport where there are higher risks of catching the virus. As a result long haul non-stop flights will increase while hub and spoke airlines may suffer. This will lead to medium sized planes being used as opposed to the large A 380 and B 747 aircraft.

The industry must embrace innovation and technology solutions that will impact distribution and market access. Marketing, promotion and distribution of the products and services will change with a far greater role for global distribution systems and online travel agencies (OTAs). More passengers and travel agents will use them than traditional distribution channels because of their capacity and agility in responding to changing demand and shifting supply. They will be faster to bounce back compared to conventional service providers. And OTA’s will likely become the platform of choice for travellers post crisis.

Hotels will have to repurpose their offerings while finding new ways of keeping guests busy and entertained. They will need to offer more activities which guests will feel more relaxed and comfortable doing. Tourists may steer clear of crowded areas for some time, as these would not fit with social distancing measures. Airlines and hotels will have to balance safety and profits. Another important aspect of the future tourism is flexibility in terms of what businesses will do through bookings, cancellation policies, service rates and schedule modifications. The pandemic could also lead to industry consolidation as weak players find it difficult to survive. It may also encourage greater vertical integration across the supply chain.

Part 3

The tourism industry is greatly affected by the pandemic of Covid-19 since the end of march when the borders have been closed. For this key sector of the Mauritian economy to get an early recovery, there must be a close knit partnership between stakeholders in the industry.

Restarting tourism and related businesses and managing their recovery in a way that is safe, attractive, and economically viable will require very high level of coordination and collaboration.

1. A strategic partnership and a coordinated approach is essential to succeed

The broader economic impacts of the slump in travel and tourism on individual countries will vary depending on their dependence on tourism, their resilience and the dynamics of demand in their key source markets. Countries with substantial domestic tourism markets or which can form regional travel bubbles are likely to experience quicker recoveries than those reliant on long haul travel like us.

In view of the severity of the pandemic, restarting tourism and related businesses and managing their recovery in a way that is safe, attractive, and economically viable will require very high level of coordination and collaboration. Government needs the knowledge and insights of operators to plan the bounce back. It should also adopt an integrated approach to face the multi-faceted issues of the industry. So coordination and cooperation will be critical for policy effectiveness, synergies and to have greater impact on recovery and resilience. As tourism services are very interdependent, government and industry have no choice than to align their responses to ensure both recovery and transformation. Government will need tourism to contribute to the wider economic recovery while hotels and other stakeholders require government support to revive their activities. They must set their differences aside and focus on rekindling demand and reimagining the future of tourism for the greater good of the country.

This is a time for a close knit partnership between key stakeholders in the industry. As borders start reopening next year and travel picks up, governments could take the opportunity to fully understand how it can potentially accelerate recovery and strengthen resilience. Government and industry should work to better understand the different market segments, decide on marketing campaigns and investments required to bring back tourists. They have to map out a robust and effective PR and communication strategy in source markets to regain trust and confidence. Prompt, effective, transparent, clear, credible and consistent communications is crucial to boost demand for the destination. Digital solutions can be an effective tool to bridge communication and create consistency in our approach.

In addition to their traditional functions of handling destination marketing and industry promotions, tourism authorities are now dealing with new regulations, health protocols and stimulus programmes. They also have to grasp how demand is changing as they simply cannot use historical models to predict the future. As a result, it would be very challenging to forecast how demand will evolve and how to manage supply. The uncertainty over the pace and shape of the recovery means that promotion budgets must be well coordinated and updated to ensure that products are marketed to the right segment at the right time, while using the most effective marketing and distribution channels.

We should leverage technology and online platforms to enhance benefits to the industry. For instance, experts suggest that the Internet of Things (IoT) and virtual assistants will be a major transformative factor in the personalisation of customer experience in the industry. Some hotels have started to use them. Likewise for the applications of 5G, big data and blockchain, 5G networks promise much faster loading and downloading speeds, wider coverage, and more stable connections, thus making travel technology more powerful and accessible. Many of these could become permanent features just as body scanners have already become standard practice at airports. Robotic cleaners will patrol airport concourses, disinfect check-in counters and ticket kiosks. Passengers will go through security and baggage checkpoints without touching anything while hand gestures and eye movements could help navigate in- flight entertainment screens.

2. An agile ‘nerve centre’ to guide recovery and transformation

Understandably, coordination and cooperation between the public and private sectors can be difficult as there are areas of potential misalignment of interests. These issues are exacerbated by the degree of coordination that will be required after the crisis, both across government agencies and between government and the private sector. There is a need for clarity and consistency to enable the country to navigate the challenges of both recovery and transformation.

A very high level task force which brings together an agile, savvy and competent team of public and private actors to address all tourism related issues in a comprehensive manner could provide an active collaboration framework. Some go further and recommend the setting up a ‘tourism nerve centre’ as a nimble team which brings together public and private players into project teams that reflect real-world needs rather than existing organisational entities. There should be broad consultations with all stakeholders to develop a vision for the future of tourism.

There must be clarity and consistency on how our country will position itself to compete in a market where many destinations will be looking for recovery which will likely be fragile. This will include the introduction of norms and standards for safe tourism operations based on recognised biosecurity protocols across the value chain so as to mitigate risks, rebuild traveller confidence and regain trust in source markets, monitor booking patterns, consumer sentiment, and emerging trends, chart out a new air access policy to reconnect Mauritius to the world especially in the absence of a viable national carrier, design and implement a revamped global marketing, promotion and product differentiation action plan that is fit for purpose in the new era so as to reignite demand , articulate a roadmap for the transformation of the sector and the diversification of products, markets and value chains and review policies and institutions to ensure the effective and efficient execution of the agreed strategy to attain growth and development of the industry.

3. Can we rise to the challenge, restore competitiveness and build back better?

A major pandemic like Covid-19 will almost fundamentally change the status quo. As a cross-cutting industry with value chains that impact many aspects of our economy, the collective tourism stakeholder ecosystem should facilitate an early recovery. It must also understand what has changed and what will best position the industry to grow and remain a main driver of the Mauritian economy. The unprecedented event will also present an opportunity for both travellers and the industry to change for the better as people expect a more sustainable, responsible and inclusive tourism.

Travel has probably changed for good. It is therefore an ideal time for Mauritius to review and rethink its strategic position in the global tourism market as the landscape is being reshaped. The mindset, inclinations, behaviours and preferences of tourists and business will change. Consumer willingness to travel and destination preferences will be affected. The public health conditions of countries and the hygiene standards of transportations, hotels and other tourism facilities will become a top priority.

We may have to rethink many of the assumptions that have underpinned our tourism industry. Different countries are preparing their own recovery blueprints and reimagining their tourism sectors. Many competing destinations will likely embrace a high-value, low-volume, low impact tourism strategy focusing on higher spenders who stay in destination longer. And they will reset their hotel infrastructure to fit the new purpose. Could that be the solution for Mauritius? We should decide what we would like our tourism to look like going forward and what policy adjustments are required, while being creative, innovative and flexible as the market evolves.

The high level task force should lead work on reimagining the way tourism operates in a post-Covid-19 world. Essentially to assess how demand for our products and services will change, develop new experiences, boost the attractiveness and competitiveness of the destination, enhance the role of technology and innovation, and evaluate new and innovative operating models. Many are predicting it would take four to five years for tourism demand to return to 2019 levels. It means that the country has also to deal with overcapacity of rooms in the short to medium term. How do we cope with such surplus supply? Is revenue sharing an option until the industry bounces back?

The overriding objective for the country should be to build a stronger, more sustainable, responsible, inclusive and resilient tourism industry. The committee must be tasked to make strategic recommendations along with specific actions on mitigation and recovery measures, timeframes and accountabilities and also help create a new tourism ecosystem aligned with expectations of travellers. Nobody has a playbook and only with a clean-sheet and independent mindset and blue sky thinking will we manage to find our path out of this intractable predicament. History shows that tourism is resilient and can rebound strongly from crises if the right policies are adopted and implemented. We should rise to this challenge collectively if we are to succeed. And the earlier the better, as the measures taken today will shape the tourism of tomorrow. Especially as there seems to be light at the end of the health tunnel with few trusted vaccines from Pfizer, Moderna and AstraZeneca in terms of efficacy, safety, costs and distribution.