The COVID-19 outbreak has challenged the global tourism economy. It has particularly threatened the survival of tour operators and travel agencies in developing countries, especially those that had started seeing promising growth of international visitors that attracted enormous local and international investors into the industry.
The unfortunate reality is that many travel businesses will simply not be able to withstand the impacts of COVID-19. As a tour operator currently creating plans to keep your business alive, it’s equally as important to understand why some businesses are failing. Knowing the ‘why’ will allow you to proactively look out for warning signs and will ultimately help inform your business’ survival strategy.
I might not be in a position to guarantee you recovery soon or tailor-make the possible root that you can take towards recovery, but I will point out a few important elements in this article that can at least make an impact on the future of your business;
Engage customers to stay top of mind. While many travel companies are cutting budgets to preserve cash, they might forget that marketing is more important than ever.Use this time to focus on creating content and keeping your previous clients informed about your current products and business evolution
Embrace digitization; Now is the best time to start thinking about acquiring the latest technology innovations both for future operations and current marketing trends
Consider re-evaluating your market landscape; The demographics of travelers are rapidly changing and we are seeing a sharp rising curve in the number of young travelers. You may need to change a few things to meet their expectations.
Having cited the few above elements that can help you as a tour operator stay afloat, I do not intend to ignore the fact that some tour operators will unfortunately not be able to survive due to one of the below factors or a combination of all;
No government support: The business is based in a country or region where government support is limited or nonexistent meaning that they had no support to fall back on when their income stream suddenly dried up due to border restrictions.
Overexposure to labour and operational costs: The business relied heavily on human labour for tasks where software and/or processes could have increased efficiency. Wages are a large investment and account for a large portion of business costs.
Overcapitalised: the cash runway (length of time a business’ cash will last at the current spend rate) was not substantial enough to withstand the sudden and sustained drop in business.
Newly created or recently purchased businesses: The business being recently established or purchased may mean that they were relying on uninterrupted travel and tourism to grow financially and gain exposure. As circumstances have changed they do not have the cash to fall back on.
Now that everyone is looking at the vaccines as the game-changer, Travel companies are no exemption as well as the entire travel industry. We are all looking ahead with anticipation and hope for some sense of recovery from COVID-19 though it will be difficult, and there is no silver bullet to solve all problems.