Dr. Tony Johnston, Head of Department of Hospitality, Tourism and Leisure Studies, Athlone Institute of Technology, spoke with the Athlone Advertiser this week and outlined how the tourism industry is well placed to lead the post-COVID-19 recovery as economies reopen.
Readers will know that tourism is an industry regularly affected by crises. In recent decades practitioners worldwide have had to cope not only with health pandemics such as COVID-19, SARS and Ebola, but also with terror attacks (e.g. the Parisian Bataclan attack in November 2015 ), environmental disasters (the Asian Tsunami in 2004 ), war and regional conflicts (the disintegration of Yugoslavia in the mid-1990s ), political instability (the Arab Spring in 2011 ) and economic shocks (the Brexit vote in 2016 ).
These shocks can be relatively confined to a single country or a small cluster of countries - the financial impact of the Brexit vote in 2016 was mostly felt in Ireland and the UK, for example – or the impact can be more regional, such as the Icelandic volcano, which effectively shut down western-European aviation for two weeks in Spring 2010. Even greater than national or regional shocks, major global shocks, such as the 2008 financial crisis and subsequent recession, tend to impact multiple countries and deliver structural uncertainties which suppress growth.
Practitioners, policy makers and educators need frameworks to understand these shocks so they can be better equipped to deal with them when they arise. While nobody could predict the scale of the COVID-19 impact on tourism, stakeholders who understand crisis management will undoubtedly rebound earlier and stronger. One way to consider the relationship between tourism and crises is through a framework of volatility, exposure, resilience and adaptability. Thinking through these four themes may help Governments, policy makers and industry with a speedy recovery.
Volatility and exposure
Tourism is a volatile and exposed industry, configured by rapid swings in key metrics, including tourist arrivals, spending and overnights, and labour force figures such as jobs and pay-rates. Few industries can go through boom and bust cycles as rapidly as tourism. Readers will have seen the
recent social media videos of fish swimming in the canals in Venice, for example, canals now empty of tourists for the first time in decades. It is only a matter of months since those same canals were clogged with visitors from cruise ships and protesting residents who felt overwhelmed by the problem of overtourism, and resultant congestion and traffic, unaffordable property prices and social problems.
Tourism volatility is also evident in Ireland. In 2019, eleven million out-of-state tourists visited the island, some four million more tourists than in 2009. Prior to COVID-19, tourist arrivals were expected to remain relatively stable over the coming years – likely to be plus or minus a few percent - with only Brexit identified as a primary risk up until only a few months ago. This has been utterly changed with the coronavirus shock and the figures will face their greatest challenge this year. Few other industries experience such dramatic shocks and recoveries.
In addition to being volatile, tourism is a very vulnerable industry; it is highly exposed due to its interconnected global nature and its dependence on easy movement of people, goods, and money. However, airline collapses, hotel, restaurant and attraction closures and major event cancellations have exposed the sector’s interdependence. It is impossible to fill your hotel if borders are closed, concerts are cancelled and airlines are not flying, after all. The remarkable situation with COVID-19 is the scale and geographic spread of the shock. This exposure has been all too evident among businesses solely exposed to tourism. While many have reduced exposure somewhat by diversifying to other sectors, such as restaurants offering take-away food for the first time, moving to online sales and utilising tourism infrastructure for healthcare purposes (such as in the City West Hotel in Dublin ), the majority of businesses are dependent on normal operations.
Resilience and Adaptability
More positively, the industry benefits from being highly resilient. Resilience refers to the ability to rebound from a difficult experience. Thankfully, the resilience of the Irish tourism industry is self-evident, having witnessed growth, year-on-year post the recession, to reach record levels in 2018 and 2019. A case in point is that when shocks occur, tourism tends to suffer first and suffer hardest, but is usually the industry with the strongest rebound. After all the shocks listed above, tourism has recovered with increased tourist arrivals and spending, greater GDP contributions and greater labour needs from the workforce. This point needs careful consideration among local politicians and policy makers as they muse over how to support the local businesses who will help drive recovery.
Finally, tourism is an adaptable industry. When faced with crises, tourism businesses respond, creating a new normality, upon which they profit and thrive. Consider for example, the case of taking liquids on board planes prior to terror concerns. It is now the norm and common sense to take only limited amounts of liquids on board a flight, a situation which would have been unthinkable in the past. Airlines have adapted to this norm by reaping huge profits from sales of bottles of water. Equally, consider the emergence of one of the largest tourism companies in the world – Airbnb – it may seem like it has been around forever, yet it was only founded during the 2008 financial crisis. It will be reassuring for tourism practitioners considering the concept of adaptation to know that Airbnb earned a revenue of over four billion dollars in 2019. Crises do tend to drive sectoral innovation after all.
For the industry and practitioners, it is a challenging time, with no obvious end in sight. In fact, without effective rapid advances in medical treatments or vaccines, closures and subsequently social distancing is expected to remain the norm for some time, posing the ultimate challenge for an industry that is primarily about socialising. However, hope can be drawn from the history of tourism shocks. We have seen decades of growth and multiple recoveries post shocks. The return to normal, or the evolution of a new normal, will take time, but the resilience and adaptability of the industry will shine through.
In the meantime, politicians and policy makers need to establish meaningful support for industry and the workforce, including though grants and loans, supported training programmes and reduced rates. Industry needs to keep communicating with their markets – retaining emotional engagement with consumers will be critical during this period, as the good times will come back and early suggestions are that there is a pent-up demand.
Those in training and education will need to respond rapidly to new realities and concepts. The personality filled, well-educated, and enthusiastic tourism workforce will drive this resilience again. However, they will need support. Investing in the human capital of the industry will be crucial, as the country’s greatest asset is its ability to engage on the world stage as an attractive destination. Inevitably, staff will need retraining as new procedures emerge around consumer expectations, hygiene standards, social distancing, and sales, so support for this will be crucial.
Most importantly, we all need to prepare for a new world. Pubs, restaurants, hotels, and most attractions will not open for some time yet and even then, will do so with social distancing, new hygiene practices and likely, revised revenue models. Adaptation in the interim will be vital to short term success.