The Art of the Pivot

How travel and tourism survived during COVID-19

The Art of the Pivot

How travel and tourism survived during COVID-19

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Jessica Roland

A strategic account director at SDL since 2014, Jessica Roland works with selected enterprise customers to help them reach global audiences and enhance customer experience, increasingly via AI. Prior roles include leading enterprise software globalization teams and international product management.

“Survival is the ability to swim in strange water,” wrote science fiction author Frank Herbert. This was never truer than for the travel and tourism industry today, as companies struggle to keep their heads above water in the COVID-19 crisis. They are a long way from safe shores, but beyond mere endurance, travel industry players are coming up with new ideas to swim faster, better, and differently. There is positive hope for these companies and the suppliers — including LSPs — who serve them.

Travel and tourism represents a significant portion of world business. Its direct contribution to world GDP increased from 9.9% in 1995 to 10.3% in 2019. And the industry’s total contribution to world employment in 2019 was 10.4%. Many factors influence levels of tourism; for example, worldwide socioeconomic conditions and terrorism, world conflict, oil prices, and environmental conditions. But recently, as we all know by now, the overwhelming and unexpected influencer for the industry has been a global health pandemic.

The travel industry, however, is not new to pandemic dis-tress. Data from the World Travel and Tourism Council shows that past pandemic outbreaks have had serious effects on the travel and tourism industry worldwide. In pandemic out-breaks from 1980 to 2019, lost tourist arrivals amounted to $57 million, and lost tourism spending worldwide during this same period reached $95 billion. Total lost tourism spending during that period was 0.23% of average world GDP value.

What’s more, the economic effects were contagious, like the diseases themselves. A pandemic economic shock originating in one region not only had immediate negative effects on the domestic labor market there, but also rapidly spilled over into to other world regions’ travel and tourism labor markets.

And here we are now, in these days of COVID-19. In 2020, researchers working with data from the World Travel and Tourism Council (WTTC) estimated that up to 75 million workers were at immediate job risk as a result of COVID-19, with a travel and tourism GDP loss in 2020 of up to $2.1 trillion, as well as $1.1 trillion of lost capital investments in the industry. The decrease in total worldwide output at the end of 2020 was estimated to reach 14.2%, far worse than the 2008 economic crisis. This constitutes the biggest plunge ever post-World War II.

Asia and the Pacific were the hardest hit, followed by the Middle East, Africa, Europe, and the Americas (Figure 1). The main factors influencing the decline are slow virus containment, low traveler confidence, and travel restrictions.

The expert consensus is that recovery could take from 2.5 to four years in order to return to 2019 travel and tourism levels. LSPs with significant revenue dependent on the travel and tourism sector are naturally both significantly impacted and deeply concerned.

The crisis demands a swift and decisive response to avert a disastrous financial effect on the entire travel and tourism industry. Besides accelerating availability and distribution of vaccines, governments are under pressure to step up support plans for the travel and tourism industry similar to the one developed for the financial industry during the recession of 2008. Much of the focus is on tactical initiatives for increasing traveler confidence and reducing perceived traveling risks. But what if tactical initiatives are not enough? What if pandemic variations continue, with extended travel restrictions? What if the travel and tourism industry has been permanently changed?

To that end, some travel industry sectors and organizations are looking at opportunities to re-think their business models and pursue product and digital innovation. LSPs should take note, so that they can follow along in supporting customers in their recovery goals, while ensuring their own financial well-being. By pivoting to new solutions together, the travel industry and its suppliers have a better chance of weathering the storm. As Charles Darwin said, “It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.”

Common requirements for pivoting

Each segment of the travel industry has specific needs and plans for surviving the pandemic, but there is a pattern of general principles emerging:

  • New content creation and updates regarding COVID-19 health and safety procedures are a major concern for all companies.
  • New content creation and updates regarding COVID-19 health and safety procedures are a major concern for all companies.
  • For the travel industry, a degree of COVID-19 safety compliance can be a competitive factor. For example, the World Travel and Tourism Council created the Safe Travels Stamp to recognize governments and companies around the world who are compliant with health and hygiene global standardized protocols.
  • There is increased attention to marketing content and digital customer experience to help compensate for less inperson selling and service.
  • Ecommerce expertise is becoming a survival skill for consumer companies. And for in-person payments, cash is no longer king — “contactless” payment transactions are here to stay.
  • Ecommerce expertise is becoming a survival skill for consumer companies. And for in-person payments, cash is no longer king — “contactless” payment transactions are here to stay.
  • Mobile apps continue to add value to the travel experience during the pandemic.
  • Themes of sustainability and related segments (rural, nature, health) resonate the most at this time.

For LSPs, these common requirements can serve as a guide line for promoting value-added services to travel industry customers, such as global content creation, marketing solutions, translation, and testing of mobile and ecommerce apps.

Turning to specific segments of the travel industry, we can observe many innovative ideas in play, as companies pivot their activities to ensure they navigate COVID-19 waters safely.

Figure 1: International tourist arrivals fell significantly in 2020. Source: World Tourism Organization (UNWTO).

Airlines

Some airlines are expanding their freight transport services, to supplement/replace passengers and successfully replace lost passenger revenue. For example, China Airlines, Korean Air, Asiana Airlines reported profits in the second quarter of 2020 due to their shift to cargo.

Other airlines are rethinking their operational models (for example, their hubs) and target markets, as there are some indications that air travelers prefer non-stop flights during the pandemic, and that the leisure travel market may recover faster than the business market. To increase passenger confidence, aircraft designers are responding with plans for seating that reduces the risk of spreading disease. Regional airlines have slashed prices on select destinations with select dates — city-hopping to major destinations in the US is as low as $49 on Alaska Airlines, for example.

And for those who miss flying internationally, Japan-based First Air offers itself as the “first virtual aviation facility,” with virtual reality “flights” from Tokyo, complete with boarding passes, in-flight meals and programmed destination countries from Italy to New Zealand.

Cruises

The cruise industry has been particularly hard-hit, but cruises are still happening, albeit with fewer passengers, strict safety procedures, and limited activities. Cruise company innovations for dealing with pandemic challenges include technology for “contactless” transactions, such as electronic wrist bands for automated registration, door opening and purchases. They’re using QR codes so passengers can scan for information, rather than handing out papers. Safety events like the ship’s muster are completed via video.

Some companies are also using creative approaches to supplementing actual cruise revenue. A good example is Viking Cruises’ viking.tv, which offers cultural content and video experiences in lieu of an actual cruise.

In some locations, cruise ships are even being repurposed as temporary housing for foreign workers, or even as floating communities.

Figure 2: Child Studio’s Casa Plenaire shows virtual resort views.

Hotels

Relative to other regions, the US hotel industry has suffered less, due to a strong domestic traveler base and limited lock-down restrictions. But hotels in general are struggling with the increased costs of COVID-level cleaning and additional spacing, combined with reduced bookings. Here as well, there is no absence of creative survival strategies. Hotels are increasing guest safety via digital technology to minimize contact, such as online check-in and digital keys. Some are experimenting with pop-up restaurants, where hotel rooms are converted into personal dining spaces. In view of travel restrictions lightening in future, promoters are enticing customers to think ahead with vacation “layaways” — book now, pay later, cancellation-free. Maximum flexibility for customers is key.

Altruism can also be good for business. For example, points donation programs, such as Marriott Bonvoy’s Hotels for Heroes, which enable front-line healthcare and other essential workers to enjoy some much-needed downtime.

Technology is also playing a part in stimulating demand for future travel, via virtual visits. For example, Japanese hot springs resorts offer video visits via YouTube, and Child Studio’s Casa Plenaire shows virtual resort views on Instagram (Figure 2).

Lodgings where guests are either on their own or distanced from one another are doing relatively well, whether it is check-yourself-in vacation rentals like Airbnb and Vrbo, or cabin-style properties where there is more separation from staff or other guests.

Short-term rentals and extended stay hotels are also being used by workers who are digital nomads. Large hotels are advised to compete by offering services that their scale makes possible, like child-care or schooling programs. Some hotels, like Marriott, have created business incubator spaces, so that startups can have access to workspace and hotel infrastructure and services.

Tourism

The tours and activities sector is the third largest in the travel industry, after flights and accommodation. Tradition-ally, it represents one-tenth of global travel revenue. But during the pandemic, even if travelers are able to make it to their destination, they are often blocked by the usual tourist attractions being closed.

Tourist attractions are staying in the game by being featured in multimedia travel articles in news publications, such as the New York Times series “How To Pretend You’re in [City].” They may also stream content on video platforms — such as Japanese onsen visits via YouTube. There are now remote-con-trolled tour guides, where camera-wearing locals respond to sight-seeing commands from people using their app at home. Amazon Explore, launched in September 2020, allows virtual travelers to have experiences in learning, personal shopping, and cultural landmarks, with local guides, at very accessible prices.

Virtual reality is making its mark in helping stuck-at-home families “escape,” via 360-degree immersive experiences, such as the Disney World Virtual YouTube Channel. A BBC article notes: “Faced with a new reality of diminished tour-ism, many believe that COVID-19 might be the watershed moment for VR that changes perceptions from a clever and occasional marketing trick to a permanent fixture of tourism marketing.”

And when travel restrictions do lighten up, technology will help maximize traveler safety and enjoyment, while minimizing human contact. Chatbots that aid tourists are an example. An intriguing alternative is augmented reality (AR) apps such as travel guides, where via use of a smartphone or tablet, users can detect extra information in their surroundings. 

Figure 3: Difference in travel spending if tourism becomes mainly domestic, in billions of US dollars. Data comes from Skift Research, UNWTO, NTTO, BEA, USTA, and World Bank.

What’s the impact for LSPs and language technology companies?

There is no dearth of creative survival thinking happening in the travel and tourism industry. But how can LSPs join in and make a difference, for themselves and for end customers?

We’ve seen how, first and foremost, providing adequate information to control the spread of COVID-19 is vital. Ensuring that public safety updates, instructions and standard operating procedures are available in all necessary languages is a natural domain for LSP participation. Adding content management technologies that allow for content reuse can help ensure all the new COVID content is produced in the most efficient and cost-effective way.

There are opportunities for speech-to-text and translation-to-speech during automated travel processes, such as with multilingual kiosks. Pre-translated content as well as machine translation for chat would be key ingredients for these. For travel videos, AR, and VR, there will be ever more need for subtitling and voiceover services. To build the market for virtual travel experiences, consultancy for cultural adaptation, as well as translation and even live interpretation, could make a difference.

Besides selling these services to travel and tourism companies, getting involved with the technology innovators sup-porting the pivots with their devices, apps, and other software will provide adjacent opportunities.

A trend in the recovery so far is that the first wave of recovery is benefitting domestic travel, especially drive-to destinations with a low density of visitors. If this trend continues, it will make a difference in the speed of recovery. It would also make a difference in opportunities for LSPs, who would likely need to focus on domestic market languages in order to realize the most recovery gains (Figure 3).

Eventually, it is expected that the travel and tourism industry will have passed through four stages during the current COVID-19 cycle: the actual crisis period, a pandemic health recovery, an economic recovery, and finally a new normal. There is speculation that the new normal will be somewhat different than before, and that some aspects of travel and tour-ism may never return to their previous state. As LSPs navigate through these phases, focusing on customer experience will be key. Language and understanding will be as important as ever for learning, adjusting, and thriving in strange waters.

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