As debates continue surrounding the impact of Covid-19 on global travel and tourism, this English Tourism Week, Dr Julie Scott explores how embracing uncertainty and creativity could be key to building resilience in global travel as we work towards a new ‘normal’ for tourism.
Travel, tourism and hospitality find themselves in the front line of the economic fall-out from Covid-19.
With 96% of all destinations world-wide introducing various levels of travel restriction, and some form of social distancing the new norm, the UNWTO expects a 20-30% fall in international tourist arrivals for 2020 (compared with 0.4% in the SARS outbreak of 2003, and 4% in 2009 on the back of the world economic crisis), wiping out the past five-to-seven years’ worth of growth.
Warren Buffet’s decision to pull all his firm’s finances out of the big four US airlines, on the grounds that Covid-19 has ‘changed the world’ for the aviation industry, seems to underscore the inevitability of wholesale shrinkage in airline capacity, with the collapse of major airlines, and British Airways shedding 12,000 jobs, or 26% of its staff. Even AirBnB, that famous disruptor, is finding its business model threatened by the pandemic, with bookings reportedly down 85%, cancellation rates at around 90%, and an estimated $20-$40 billion wiped off its company value. Dramatic though these headline figures are, the impact is replicated on a smaller scale all along the complex travel and tourism value chain, and felt by the innumerable small and medium sized enterprises, which make up an estimated 80% of the sector.
In what feels like a period of unprecedented and acute uncertainty, we look for ways of reducing risk by substituting knowledge for uncertainty, and we tend to do this by extrapolating future trends from knowledge of past events.
However, an alternative approach is to recognise and understand the inevitability of uncertainty, in a world of increasing complexity and acceleration, and to seek to develop adaptive responses, with a focus on building resilience, rather than ‘recovery’ based on return to the status quo ante.
Scenario building is one such approach, which is gaining increasing traction in the corporate and policy-making worlds. Briefly, scenario planning involves the crafting of stories, which seek to resolve key uncertainties derived from the forces identified as driving a particular situation. The scenarios generate multiple alternative resolutions, rather than a single authoritative version. They must be plausible, and grounded in careful analysis of the driving forces and their associated uncertainties – but their main strength lies in the building of compelling narratives that explain complex relationships and imagine the impact on them of different conditions and outcomes. As such, they call for creativity and imagination, as well as knowledge and analysis.
To illustrate, here are three areas of critical uncertainty that the Covid-19 crisis has thrown into sharp relief:
Firstly, there is no V-shaped curve. In the absence of an effective vaccine, the threat of future repeat waves of infection mean that social distancing, alongside ramped up cleaning and hygiene protocols, will continue to have an impact on travel, tourism and hospitality businesses. Among other restrictions, government guidance issued in the UK this month (May 2020) for hotels and restaurants emerging from lockdown stipulates that bar areas and seated areas in cafes and restaurants must remain closed, check-in and check-out times and work shifts staggered, crowded reception areas avoided.
Airlines are debating the viability of leaving centre seats empty as a way of achieving social distancing, and the impact on demand of the 14-day quarantine period for international arrivals to the UK, announced last week. The impacts of such measures will be felt in both customer experience and prices, which will in turn affect the pattern and volume of demand, as well as the future of the workforce in the short, medium and long term. With Heathrow’s Chief Executive conceding that there may now be no need for a third runway for another ten to 15 years, the industry appears to be heading for an L-shape curve unprecedented in the history of modern tourism.
The second area of uncertainty concerns the multiplicity and complexity of stakeholders and stakeholder relationships. Characterised by long, multi-sectoral supply chains, extending both globally, but also very locally, and heavily weighted towards small and medium sized businesses, but also involving government departments, international agencies, and global corporations – the scope for the interplay of human agency and ingenuity, and the challenges of coordination, leave the door wide open to surprises and unexpected consequences.
Thirdly, the conjuncture of the pandemic and the climate emergency suggest we may have reached a transformational moment, with the possibility that loss of biodiversity and human encroachment into wildlife habitats will increase the likelihood and frequency of pandemic outbreaks in the future. Will this be the new normal some voices are predicting? How will we adapt to that? What other futures might be possible? And what part will travel and tourism play?
With the development of a safe vaccine still some time off, heightened levels of uncertainty are likely to persist into the medium to long term. This suits the time frame for scenario planning, which typically works with a five to ten year horizon. Amongst the benefits reported by organisations who have used scenario planning, such as British Airways and Visit Scotland, is the way the process challenges operational ways of thinking, which assume that the future will look very much like the present.
As the industry starts to pick up the pieces and contemplate the new post-lockdown landscape, destination management organisations, businesses and local authorities – particularly in the tourism hotspots identified in our earlier research as acutely exposed by their dependency on the tourism economy – would benefit from the opportunity to reboot, to engage in fresh thinking, generate and test insights, and to stimulate organisational creativity, which will be key in building resilience to current and future shocks.
Dr Julie Scott is a Senior Researcher within the Tourism and Events Hub and a Senior Lecturer in Tourism Policy within the School of Human and Life Sciences. The Tourism and Events Hub aims to provide a clearly defined research and knowledge exchange offer to the visitor economy in Kent and beyond.