How Do We Drive Mitigation and Recovery Efforts During COVID and Beyond?


12/10/2020

t’s hard to overestimate the impact of COVID-19 on tourism. As countries around the globe have been forced to close their borders to control the spread of the virus, the international tourism sector has completely dried up, with wide-ranging consequences for jobs, businesses and national economies.

Globally, international tourist arrivals declined 70% in January-August 2020 compared to the same period last year, with Asia and Pacific – the first region to suffer the impact of the pandemic – seeing a 79% decrease in arrivals.

(Image source: unwto.org)

In April, the Pacific Asia Travel Association (PATA) set up a Business Impact Survey to better understand how the pandemic has impacted organisations in the APAC region. It found that 15% of SMEs in the travel sector had already closed their businesses, with a further 42% saying that they only had money to keep going for another two to four months – meaning by now, many of those will likely be closed as well.

As the APAC tourism economy remains in recovery mode, PATA CEO Dr Mario Hardy hosted a Tourism Board panel discussion to drill down into the impact of the crisis in Singapore, Malaysia, Australia, New Zealand and Switzerland, and the mitigation and recovery measures these countries’ respective governments and national tourist boards are taking to reactivate the sector, protect jobs and businesses, and build a more resilient tourism economy in the post-COVID-19 environment.

Below, we bring you the key highlights from the discussion.

COVID-19 – The 2020 Impact

Tourism is a significant part of many national economies – but border closures, lockdowns, and restrictions on travel and people-to-people interactions brought the tourism economy almost to a complete standstill after the pandemic was declared.

“In January 2020, Singapore received 1.69 million international visitors,” said Siew Keong Soo, Director, Trade Engagement & New Markets, Singapore Tourism Board. “In June 2020, we had just 2,200. In terms of hotel occupancies, we usually have 80-85% occupancy, but this fell 27% in the first quarter this year to just 57%.”

It’s similar story in Malaysia. As Datuk Musa Yusof, Director General, Tourism Malaysia, explained, the country is used to welcoming 2 million+ international tourists a month – but this dropped to just 200 from March.

New Zealand, meanwhile, took decisive action early on to control the pandemic, pursuing an elimination strategy that reduced international arrivals to practically nothing. “We were one of the first countries to close borders and will probably be one of the last countries to reopen,” said Emil Petrov, Head of Strategic Projects, Tourism New Zealand. “We had close to 4 million total visitors, with 2 million holiday visitors – but in the last few months that number was virtually zero.”

In Switzerland, Ivan Breiter, Director of SEA, Switzerland Tourism, explained that while the country was able to open its borders with certain other European states in June, a decrease in business traffic and travel to cities continues to have a serious impact – and of course the country is still missing all of its clients from Asia Pacific.

Jobs and Business Survival at Risk – Continued Government Support Required

100 million jobs are at risk across Asia Pacific if the situation continues. Even with the potential roll out of a vaccine next year, a return to pre-pandemic levels of tourism is not expected until 2023 or 2024.

Dr Hardy asked the panel how these jobs can be saved, and what measures their respective governments have taken to assist small businesses in these times of crisis.

Siew Keong Soo was the first to answer. “The Singapore government took very decisive action right from the start of the COVID emergency. We knew we had to dip into resources to come up with money to help the tourism industry. The government has come up with USD 78 billion to support the broader economy with key measures to save jobs, save businesses, and provide financial schemes to tide companies over throughout this period of time. The government is paying employers up to 70% of employees’ salaries, is providing grants for freelancers and the self-employed, and paying 90% of the fees for retraining programs.


For the tourism sector specifically, the Singapore Tourism Board Marketing College is partnering with tech companies such as Google, Facebook and LinkedIn to develop online training for many workers – all of which are delivered free – so they can learn business insights and how to use tech solutions to ride out this COVID period. Since, at this time, when there isn’t much to do, the best thing for employees is to upskill themselves. We have also looked at job matching – where people have lost their jobs, we look for jobs for them in other sectors, such as hospitals. We have also waived licence fees for travel agents, tourist guides and hotels – and if your venue has a COVID case, we subsidise your cleaning fee. Small things, but added together we aim to help workers and businesses.”


Datuk Musa Yusof outlined Malaysia’s mitigation efforts. “We acted much faster. One of our biggest source markets is China. Way back in late December when COVID was still in China, we formed the Tourism Recovery Committee with the Ministry of Tourism and industry players – so when COVID was declared a pandemic, we had plan already there. Our first economic stimulus packages were announced in February, specifically dedicated to tourism businesses. Then in March, we announced further packages for about USD 30 billion to all industries – about 98% was applicable to tourism players. We then offered a loan moratorium, especially for tour operators, for a minimum of six months. To help hotels which were suffering from inbound cancellations, the government paid for them to become quarantine centres, and also introduced a salary subsidy for employees. We also have financing specifically dedicated to SMEs and micro enterprises. We got twelve commercial banks together to provide soft loans for a minimum of RM 10,000 up to RM 10 million to support SMEs, not just in tourism.”


In Switzerland, Ivan Breiter explained that about USD 60 billion had been invested in the tourism industry through packages similar to Singapore. Andrew Hogg, Executive General Manager, Asia Pacific & Aviation, Tourism Australia, told Dr Hardy that the Australian government had put a range of measures in place to ensure that people remained employed, as well as other measures to support small businesses so they can essentially go into hibernation to withstand the current pressure.


A similar $50 billion package has been made available in New Zealand, along with a wage subsidy that pays out at 80%. “Over and above those there is some tourism specific measures,” said Emil Petrov, “the biggest being a $400 million strategic assets retention program. So, for tourism businesses that are of strategic importance either regionally or nationally, they can be offered a grant or a loan which they can use to either hibernate or pivot. There is also the Tourism Advisory Support Service, delivered through Tourism New Zealand subsidiary Qualmark. This is designed to support businesses with individualised advice, whether that’s through a financial planner or business advisor. They get help to come up with a customised plan, whether that’s to pivot their product to the domestic market, or a plan to restructure, recapitalise, or make the best use of the tools available. This has been particularly well received, participation has been very high, and in the next round we’ll be looking at digital enablement tools and platforms.”


Can Domestic Tourism Plug the Gap?

According to a recent report from the Philippines, domestic tourism has taken off in a big way since borders have closed. In fact, highlights Dr Hardy, it’s been found that domestic tourists are spending more than international tourists. Part of this could be that the money saved on a long-haul flight can be spent domestically. Customers may be more likely to stay at a more upmarket resort, for instance, than they usually would and spend more locally because they don’t have the costs of a flight to cover. Hardy asked the panel whether this was a new trend, and what initiatives have been undertaken to stimulate and support domestic tourism in their respective destinations.

Emil Petrov: “Yes, absolutely, there is an increased interest in domestic tourism. There is a lot of pent up demand, and people still want to go and experience things. I’m surprised – in a positive way – to see in some countries domestic spend is above international. I think in New Zealand if we can get domestic tourists to spend comparably to international tourists, that would be really good and I think there is a runway to achieve that.” To encourage growth, Petrov explains that a ‘Do Something New, New Zealand’ campaign has been launched, encouraging the domestic market to travel like an overseas tourist and experience New Zealand again for the first time. “There is something else aside from the economics of [encouraging domestic tourism] that’s important,” he adds. “There is a social benefit to getting more of your domestic market to enjoy your own tourism economy. By engaging something, you appreciate it more – it improves the well-being of your people. But, long-term, you’re also building your own brand within your own country and building the social licence that will be an important part in the recovery phase of getting back to growth as well.”

Andrew Hogg concurs. He says that Tourism Australia is working on campaigns to encourage people to travel more widely and experience what Australia has to offer. “It might be as simple as going to the Great barrier Reef – but going to two different parts in the Barrier Reef, or traveling in regional north west Australia, more in the Northern Territory, or regional Victoria, or fire-affected areas and seeing the recovery processes. We’re trying to get good regional dispersal.”

Singapore, meanwhile, has invested $32 million in a domestic campaign. The government also came up with USD 234 million of tourism credits to give to Singaporeans to induce them to travel and spend locally – the idea being that as they make use of the tourism credits to access attractions, hopefully they will spend in dining and retail as well. Siew Keong Soo explains that in 2018, Singaporeans spent over $25 billion overseas for travel. “This means that in 2020, if they’re not able to travel, hopefully they will spend some of that in Singapore itself if the campaign is successful enough.” The Singapore Tourism Board came up with the ‘Singapore Rediscovered’ campaign, encouraging residents to go and discover things about Singapore that they never knew before. They found that residents don’t want to be treated like tourists in their own country – so the campaign had to reflect that.

“So, the trick here is that the campaign looks firstly at local communities’ involvement. We look at Singapore personalities and key opinion leaders to come out share what is their ‘hidden gem’ – their most favourite café tucked away in a corner nobody knows. Secondly, we work with various stakeholders to come up with more interesting and unique experiences.” For example, hotels are offering “bundle deal” packages, where hotels bundle overnight stays in with experiences that are outside of the hotel, such as a free Segway ride or free river cruise.

Has the Pandemic Altered the Marketing Strategy Moving Forward?

Despite the domestic uptick, all panellists agreed that domestic tourism is not a replacement for international tourism – the gap is simply too big for the domestic market to fill. As such, Dr Hardy wanted to know how the pandemic has altered marketing strategies, and whether marketing messages will change post-COVID-19.

Datuk Musa Tusof of Tourism Malaysia: “We need to remodel and re-strategize. We have learnt over the past 20 years since the 1997 Asian financial crisis that domestic tourism is very important. So, in early 2020, before COVID became a pandemic, we decided that domestic tourism must be the anchor whether there is corona or not.” However, Tusof explained that inbound is still regarded as the most important market for Malaysia, and the industry is looking at how it can drum up demand for the future through various deals and marketing campaigns. “Hoteliers in Malaysia are changing bookings from December 2020 to December 2021. We are also looking at ‘buy now, travel later’ deals. We have strong demand from neighbouring Asian countries – Singapore, Indonesia, Laos and Vietnam as well as Thailand. So, once we unlock the border, immediately we expect traffic coming in – and there’s a lot planned for outbound traffic as well, as other countries do their bidding here in Malaysia to get Malaysians out from the country.”

In Switzerland, currently 90% of tourists are domestic – up from an already strong domestic market of about 50%. In terms of marketing, the government has provided money for various marketing initiatives with the Switzerland Tourism Board, and has introduced the “clean and safe label”, adopted by about 7,000 companies in the country that lets guests know they are visiting an establishment that has consciously committed to increased safety and hygiene in response to COVID-19. “We will also go into much more segmented marketing, much more targeted marketing, tapping into many more digital channels so we can really focus on certain target groups,” said Ivan Breiter. “We will also use the topic of sustainability throughout the next two to three years. As Switzerland is this beautiful nature paradise, I think people, especially in the mid-term, will travel a little bit differently. They want to go a bit off the beaten track, discover nature and maybe avoid the bigger crowd. So this is something we are really developing right now.”

For Andrew Hogg, the important thing will be to adjust marketing messages to the safety conscious traveller – especially when borders reopen. “Travellers will be doing their research and seeing what’s safe for them. The way in which tourists travel will be different. I think tourists will continue to look to explore and take holidays, but it’s just the way in which people will do it – the information they’ll be looking for – that will change. We’re doing our research into that to ensure we meet those needs.” He adds, “We’re still working at the top end of the funnel for international tourists to make sure people do still value an Australian holiday, so when the timing is right and when borders open they come back as quickly as possible to help support the industry here in Australia.”

Similarly, New Zealand has shifted a lot of marketing campaigns to the upper funnel. “We’re keeping the New Zealand brand alive, the spirit and idea of New Zealand in the mind of consumers who obviously can’t travel in the near-term,” said Emil Petrov.

Has Tourism Changed Forever?

The consensus is that it has. All panellists expect an eventual recovery, but it will take longer than any would like. They see technology playing a key role in that recovery, as guests look to more contactless experiences, virtual experiences, and rely more on digital channels to get the information they need.

Datuk Musa Yusof sums up the situation for the near- to mid-term. “COVID-19 will be with us. Whether there’s a vaccine or no vaccine, COVID will be there. So, therefore, we have to adjust the customer as well as the travel trade and look to how to reset the whole thing. This is now the time for resetting everything, and technology must be embraced.”




Return to Blog