COVID-19 and tourism: what’s to fear?

I’m blogging live from the BC Tourism Industry Conference, the can’t-miss professional development event of the year.

With an already jam-packed program, an emergency session was added to address industry concerns about COVID-19, a virus that according to some is “poised to be the next SARS” (or worse) for the tourism sector.

I’m going to share thoughts from senior leaders in our industry, who were convened along with hundreds of delegates (a rarity during this health scare) to discuss lessons learned from the SARS crisis of 2003. The session was reassuring for a number of reasons; serving as a reminder that we’ve been through adversity before and that we have sophisticated thinkers from the health and tourism sectors leading the way.

I learned a fair bit from each speaker on the panel. Some information may be outdated by the time I hit the “publish” button, so I won’t bother sharing health-related details beyond saying that as of today, March 4th, there are 93, 090 confirmed cases and a death toll of 3, 198 people.

Please visit the World Health Organization for up-to-date statistics and information by clicking here. For more about the industry’s response, and future outlook, read on. 

Greg Klassen: “Play the long game”

First up was Greg Klassen from Twenty31. Greg is the former President & CEO of the Canadian Tourism Commission (now Destination Canada) and helmed that organization when the SARS outbreak in Toronto ground our tourism industry to a halt back in 2003.

Greg walked us through COVID-19’s impacts today. He spoke to billions of dollars in losses for Southeast Asia’s tourism industry, with high season occupancy dropping from roughly 90% down to 25%. He reminded us that iTB, the world’s largest industry gathering, was cancelled on orders from the German government. He showed us ForwardKeys data since January showing a global bookings decrease of 19.3%, with 87.7% of those from Asia Pacific. He spoke to challenges including decreased traveller confidence (fear of flying and the risk of being quarantined in a foreign country), cancellations (which the business events community is feeling most acutely), travel bans imposed by various governments, and digital listening indicating many are concerned about the ethics of travel during this health crisis.

And yet amongst this data, he says, is something of a silver lining. It appears a higher yield, higher educated and “intrepid by nature” segment is willing to shake off risk in order to travel. Another pattern Greg anticipates based on his experiences is that of a “substitution effect” where travellers swap out shorter-haul vacations for their longer-haul plans. That’s why Canada saw record numbers of US visitors in 2002, as post-9/11 Americans decided we were a great alternative to flying to other destinations.

Greg’s overarching recommendation for the industry is to approach the challenge in phases:

1. Short term: effective crisis management and communication, with a plan to engage in market research that can be acted on as soon as containment is reached.

2. Medium term: recovery efforts immediately once containment is declared, to reach those markets most likely to respond to offers, as determined in phase one. Later during Q&A he explained that Canada’s brand is founded on “safety and solid healthcare” which is a challenge when people want exotic and off the beaten track, but can actually serve us if we remember that this is an innate part of our brand, and something we can build on.

3. Long term: as we chart a path to a new normal, engage in more diversification of markets and ask ourselves what lessons there are to be learned. After the 2003 SARS crisis, Destination Canada invested in a number of initiatives including rebranding and developing EQ profiles as they reconsidered the areas that were being stressed.

Dr. Richard Stanwick: Seek “sources of truth”

Next, Dr. Richard Stanwick, Chief Medical Health Officer for the Vancouver Island Health Authority, spoke more to the health crisis rather than the business crisis. He urged members of the audience to continue to listen to the BC Centre for Disease Control, to implement proven methods like hand washing, using social distancing (staying 2m away from people), and not touching our faces where the virus can gain entry.

Dr Stanwick asked us to amplify “sources of truth” like the BCCDC and the WHO, to consult the 8-1-1 hotline for related local queries, to trust that we are being kept up-to-date, and to allow the health authorities to continue their path of “contain, delay, prepare” in ensuring BC is equipped to deal with cases as they arise. He stressed that there is total transparency and real-time updating taking place, it’s just a matter of going to the right source.

Rick Antonson: “Reputation is all we have”

Third on the panel was Rick Antonson, who was President & CEO of Tourism Vancouver during the SARS outbreak. He explained that “the first law of crisis management is to make sure you have a crisis”, and that now that iTB has been cancelled, we can call this a business crisis, but it’s how we respond to this that could become the defining moment for BC’s tourism industry. He similarly described what’s to come in phases: 

Phase 1 (where we are now): a time of assessment and uncertainty, where industry needs to be diligent in finding the difference between gossip and fact. This includes having operators check their insurance policy (rather than assume coverage), as well as revisit our own cancellation policies and fees. While some of us can charge fees, and cancellations present immediate pain, we need to decide how implementing these could damage our reputation down the line.

At this stage, we need to continue to provide updates and links to trusted sources, as well as start to put aside money for the recovery and planning for mobilizing after containment.

Phase 2: involves dealing with the market impact while gaining intelligence. He echoed Greg’s sentiment that when we see a decrease in long-haul travel we can pick some of that up with (day’s drive) rubber tire traffic. When we reach this stage we should acknowledge and track pent up demand and remember not to alienate those longer-haul markets, because when this is over, all we will have is reputation as we strive to rebuild with them.

Phase 3: is the implementation of a recovery plan, with caution. He explained that when Scotland came back from HFM disease with a stellar campaign, they launched … on September 11, 2001. Sometimes you have to expect a second punch, but overall if we plan for this phase and focus on reputation management, our industry is resilient and can tackle this as we have the challenges of the past.

Coincidentally, I received the following tips for Tourism Vancouver members in an email as Rick was speaking:

  1. Be sensitive to the situation that our visitors and suppliers may be going through.
  2. If appropriate, consider eliminating cancellation fees and/or refunding penalties if visitors must change or postpone their trips to our market.
  3. Have confidence that the travel market will bounce back.
  4. Reach out to your partners or suppliers to express your concern and support.
  5. Consider a flexible refund and cancellation policy as a means of driving future bookings.
  6. Be aware of – and pay serious attention to – official sources for health information.
  7. Watch for Tourism Vancouver’s Member Updates as a source of sector information and updates and reach out to us, if you have questions.

Maya Lange: Sign up for industry news at DestinationBC.ca 

Lastly we heard from Maya Lange, VP of Global Marketing for Destination BC, who unfortunately has crisis management experience due to our recent record wildfire seasons. Maya stressed that information is key, and for industry to sign up for updates by visiting DestinationBC.ca and following them on social media.

Maya explained that based on statistics from OTAs and GDS, BC’s forward air bookings (March to October) are down 10% on average; where China is down 70%, the UK is up 7%. She reminded us that 50% of our revenue comes between June to September, and that the industry should be shoring up so we can retain as much of that revenue potential as possible. Reinforcing Greg and Rick’s comments was her message that domestic visitation accounts for is 74% of traffic and 48% of BC’s tourism revenue, and that if we combine domestic and US that is 90% of our visitation, so short-haul is a key factor.

Destination BC has a two-phase approach which involves:

1. Emergency Phase, more investment in stimulating short haul travel as well as modifying co-op and bulk buy programs (relaxing deadlines).

2. Emergency Recovery Phase, where they will inspire long haul travel with significant investments.

Later in Q&A, Maya was asked if we should be investing in more local travel, weekend getaways from nearby markets and similar initiatives. She agreed, and emphasized that #exploreBC, developing itineraries, and working with nearby communities are ways we will be able to mitigate the impacts of this situation.

Based on this session at the start of our annual tourism industry conference, it’s clear there’s alignment amongst leadership around what needs to happen. Let’s share the facts, weather the short-term, plan for recovery, and learn from this stress test to better prepare for the next business crisis.

Beyond the 4Ps: Programming works!

Kotler’s 4Ps of marketing are a staple of business education. We speak frequently of product, price, place and promotion strategies – especially as they relate to consumer packaged goods.

Those in the tourism know are also familiar with Morrison’s expansion into the 8P’s of services marketing (2010):

  • People
  • Partnership
  • Physical Evidence
  • Programming

Programming pertains to customer-oriented activities (special events, festivals, or special activities) designed to increase customer spending or length of stay, or to add to the appeal of packages.

Recently I discovered a practical example of programming from the retail sector: the MEC race series. These series of either road or trail race events are hosted by different MEC stores across Canada, tying together the retail experience with online communications and in-person brand experiences to create a sense of community while increasing sales.

As a road race participants are encouraged to purchase a bundle of roughly six races for a one-time fee of approximately $72. Prior to each race, emails are triggered reminding participants to come and pick up race packages, with a Saturday-long in-store option. For those who pick up a package (essentially a race bib and some verbal info) in-store, a 10% savings coupon is presented (valid that day only). I used mine to buy rain pants for my little cheering section.

The race gives MEC another reason to reach out to shoppers, and furthers their mission and values around inspiring and enabling everyone to lead active outdoor lifestyles.

But let’s get back to those rain pants. By incentivizing me to purchase with a same-day discount, MEC is ensuring I don’t go out and troll Craiglist for a couple of used pairs, cashing in on the convenience of having me on location. That’s over $70 in additional sales, and a much more targeted series of communications than traditional media (or even most digital and direct channels).

So far the events have been very well run. Kudos to the MEC team for standing in the freezing rain cheering us all on at Sunday’s first race.  And kudos to their marketing team for ensuring that all the branding, from the kilometre markers to the race arch itself, proudly displayed the bold green MEC square.

RaceSeriesArch.jpg
Branding!

Many tourism businesses from attractions to entire destinations are increasingly relying on programming to fill the shoulder season. Dine Out Vancouver is a popular example.

Do you have an example of programming at your business or in your destination? Share it in the comments!

Note: Despite my love for all things MEC, as with all posts on Tourism Nerd I receive absolutely zero compensation for writing about them.