August 11, 2020

Travel Business are at an absolute low – here’s how they can recover after COVID-19

Travel news

The COVID-19 outbreak is here and we’re all affected by it. By the time I’m writing this, almost half a million infections have been confirmed worldwide, with probably many more left undetected so far.

At the same time, the financial markets dropped massively, while a lot of businesses have had to close and layoff employees.

Yes, it does look like the perfectly terrifying mix between the Spanish Flu and the Great Depression.

How is the travel industry affected by COVID-19?

The short answer: never been worse.

  • cities are in lock-down
  • travelers are canceling bookings for tours, accommodations and flights
  • attractions are closed
  • small businesses are dying, while the rest are trying to survive and optimize their cash flow as much as possible

Depending on how long this crisis will last, our behavior as travelers will be more – or a lot more – impacted.

As my experience is in the tours and experiences business, here are my thoughts about how tours will change.

Three predictions for the future of tours

1. The new age will be that of self-guided and private tours

After weeks, possibly months of isolation and self-avoidance, travelers will have second thoughts before engaging in any walking tours with large groups. Especially, if it’s about exploring with a group of strangers in a foreign country.

As an alternative, my bet is that people will shift towards exploring on their own and private tours. Actually, this is a trend that was already happening.

According to this Arival report from 2019, U.S. travelers had already a clear preference for private tours and small groups.

Then, on a general level, 50% of people are already exploring on their own and these changes will only increase the percentage.

2. Focus on price-sensitive activities and better value for money

COVID-19 is causing both a health and a financial crisis that will most likely alter people’s budget spend. In this regard, travel and tours, specifically, will not be as essential for travelers.

Even when travel starts to recover, it will begin with flights and accommodation at the forefront, so the expectation is for people to become more interested in budget-friendly activities post-crisis.

3. Local exploration beats travel abroad

As cities will end their lockdowns and people will be allowed to start roaming the streets again, they will become more interested than ever in discovering their city and the local area.

Much because some restrictions might still be in place. For instance, traveling abroad might be limited due to safety issues. As such, local/domestic travel will remain the only viable option for travel.

Expect local travel to be promoted massively, as it is one of the first levers of recovery for the local economy: restaurants, hotels, attractions, etc, they all depend on local travel until foreign travelers return.