It’s hard not to paint a bleak picture of the
in-destination experiences sector. Tom Jenkins, CEO of the European Tour
Operators Association, called the tour operator business “a bloodbath in the jungle.”
Rezgo CEO, Stephen Joyce, who spoke at WiT Indie 2020 earlier
this month, predicts COVID-19’s impact would result in “a mass culling of the
long tail” as more cash-rich operators manage their market share while smaller
operators struggle to stay in business long enough for travel demand to finally
return.
“As things settle down, we may see a return of
some operators to the space, but because of the financial impact this crisis
will have on many individuals, there may be a large number of operators who
decide to return to the work force and leave entrepreneurship, and its
associated risks behind,” Joyce says.
The crisis serves as a bitter reminder for a
notoriously offline industry of the critical need to go digital, if their brand
is to survive once some level of normality resumes.
“At this point, staying in business is the
number-one priority. … In the short term, they should make sure they have the
basics taken care of like making sure they have a website and their Google
profile is updated,” he says.
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Joyce also recommends focusing on marketing
locally, shifting their attention to targeting domestic travelers who are
looking for something to do closer to home.
According to BeMyGuest CEO Blanca Menchaca, “The
ability to endure this situation along with the regeneration of our industry
will be dependent on keeping costs to a minimum and automating the essential
sales process. … [A] colossal spotlight has been activated, shining directly on
the massive inefficiencies of manual processes in our industry.
"The current
crisis has only served to further highlight the critical need for automation
throughout the attractions, tours and activities industry.”
While an unfortunate way to learn a lesson on
the power of digital, Menchaca argues that the dramatic downturn in travel
could be an opportunity for experience providers to upgrade their offerings and
processes in the long run.
“Operators who were confident in their
flourishing business believing they had no need for technology are now bearing
the very real costs of resource excess. It’s time for agents and operators to
take a serious and realistic look at their operations and leave the old ways
behind them. If nothing else, the COVID-19 situation has shown us how critical
automation is to saving time and money,” she says.
“This is a great time to prepare for the path
back to recovery with a complete overhaul of outdated, manual methodology, [and
get] ready for the upturn, which we all know will eventually come.”
Fortunately, many technology providers are
working to develop online tools to help operators manage this time, in an
effort to help the industry get back on its feet. “Going forward we’re giving
our full commitment to further tech innovations to directly help the industry
bounce back,” Menchaca says.
BeMyGuest is helping facilitate cancellations
and maintain refund records. Rezgo is crediting cancellation fees back to
suppliers, to eliminate any additional costs. Klook is implementing flexible
policies and processes as well helping reschedule activities to also minimize
operator costs.
Klook is also working closely with tourism organizations
and various recovery task forces, relaying information between governmental
bodies and independent merchants, to ensure they get any support offered.
Weathering the storm
While the entire industry is in uncharted waters and it is easy
to be pessimistic, those that make it through will be in a new position of
strength, so long as they use this time effectively.
“The
businesses that do last through this crisis will be stronger because of
it. Once the climate improves and demand returns, these companies will be
a great position to gain new business and return to a growth phase,” Joyce says.
For
example, Questo – a real-world
exploration game that combines mobile gaming with self-guided tours – has
undoubtedly seen cancellations and a dip in sales, but is using the lull to
develop more "quests" in preparation for the rebound.
“As
a marketplace for tours as games, our demand side is driven by supply, and so
the more tours we offer, the more our users will play. … This way, once this
crisis [is] over, our users will have more content to explore. Sales-wise, we
might focus a bit more on short distance travelers,” says CEO Alex Govoreanu.
Admittedly,
as Questo toes the line between mobile gaming and in-destination experiences,
its digital operations inoculate it from the broader consequences of the
pandemic faced by others in the sector. Its digital-first approach has
naturally let it overcome the hurdle of running in-destination experiences in just
one place.
“Being
available in multiple destinations is hard, but it’s a great advantage in times
of crisis because it makes the company less fragile. I will advise anyone to analyze
their company for finding the true things that could transform their business
into an anti-fragile one,” Govoreanu says.
*This article originally appeared on WebInTravel.