Riyadh — The impact of COVID-19 has been far and wide, and one industry, in particular, has been hit the hardest. A new report released today by Boston Consulting Group (BCG) in collaboration with Google, titled “Actions for Destination Marketers to Navigate in a COVID-19 World” assessed the effects of the pandemic on the global travel and tourism business and its impact on Destination Marketing Organizations (DMOs).
The report highlights that the global travel and tourism business has recorded sustained and successful growth over the past 20 years, with a Compound Annual Growth Rate (CAGR) of 5 percent, amounting to $4.7 trillion in 2019. With the effects of COVID-19, a decline in international and commercial passengers around the globe could lead to a loss of up to 58% of jobs (190 million) in the travel and tourism industry and cut the industry’s contribution to global GDP by up to $5.5 trillion (62%).
Trends in consumer preference in travel demands have shifted, creating the unpredictability nature in DMOs businesses. Google searches in the Middle East and North Africa (MENA) show that “cancel flight” queries increase by 259 percent in March 2020, compared to January 2020. Moreover, the growth of “staycation” related searches increased by over 400 percent since March.
In Saudi Arabia, searches related to “staycation” have grown by 40% during the summer season. The top countries people searched for on Google in the past 3 months were Saudi Arabia (looking for staycation options), India, Pakistan, Philippines and the UAE
“These shifts in consumer sentiment towards traveling are real, as the fear of catching the virus grows, and accordingly leisure travel is no longer an option or a priority,” said Abdullah Alassaf, Industry Manager, Google. “However, the need to travel is inherent. We found in our research that consumers rate leisure travel as the top activity they miss the most and 31% surveyed in the report hope to plan leisure travel once they feel safe enough to do so.”
As the travel industry continues to adapt to the changes caused by the pandemic, DMOs must be at the forefront to ensure that they are ready for the eventual resumption of travel or more unexpected changes on the horizon. A fundamental building block of responding to the pandemic is the right use of technology and in specific the use of data. Proper gathering and analysis of real-time data and business intelligence will allow DMOs to gain actionable insights required in a highly volatile travel environment and remain agile. With this, DMOs can begin plan ahead for the long-term in three key activities:
Product and service development: Guide deployment of new products and services, health and safety standards, measure and regulations, and operational measures.
Stakeholder engagement: Inform stakeholders (including governments and healthcare officials and travel industry suppliers) of unified communication messages and collaborate with them on setting travel and health standards.
Marketing: Reallocate marketing spend by channel, and guide campaign messaging and timing.
In preparation for the next immediate step for DMOs, BCG and Google have developed a ‘five-R’ approach to guide travel marketers in adapting to the changing industry trends:
Reassess their offerings and value proposition in light of evolving traveler preferences, needs, and concerns.
Reassure travelers on the safety of travel to their chosen destination by addressing their health concerns.
Raise awareness of the destination, including added safety measures and local government regulations, to inspire consumers.
Remove barriers in converting consumers to travelers by making the case for traveling with conscientious health and safety measures in place.
Revive spend in the local economy by supporting tourism
Looking and planning ahead, beyond COVID-19 is imperative for DMOs. As the world moves towards a phase of recovery, focusing efforts on enhancing technology and data collection with the ‘five-R’ approach will be of use for the travel and tourism industry in the long run.
About Boston Consulting Group
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© Press Release 2020