The Covid-19 pandemic led the world to some dramatic social and economic disruption that challenged every industry.
As the world tackles the second wave of coronavirus, the global tourism sector is facing massive job and revenue losses.
So if your business falls into this group, know that you are not alone! We prepared this guide to help all tour and activity operators navigate through the coronavirus crisis and come out of it stronger than before.
Have a read through to explore useful data and valuable tips that will help you manage this challenge.
While the first wave of coronavirus caused chaos and a state of uncertainty among governments, healthcare authorities, and the general public, the second wave is bringing up some more serious debates about the future.
Looking at the rapidly spreading disease, the world is nowhere near the end of the coronavirus pandemic. Cases of COVID-19 are confirmed in 220 countries and territories. The global number of affected is increasing day by day around the world, with over 59,470,528 cases as of November 24th, 2020. 41,112,909 have successfully recovered and 16,956,219 cases are still active. The countries with the most cases are the USA, India, Brazil, France, Russia, Spain, UK, Italy, and Argentina.
A few months ago we struggled to supply PPE and organize the workload in medical wards. Our main concern was how soon we will go back to normal. And now, when a second wave hit us much harder than the first, we are starting to recognize some more significant impacts of the crisis. We are not too excited to see what the future holds but rather evaluate the consequences first.
The impact on the leisure industry
The spread of Coronavirus brought a wealth of challenges for the leisure industry.
The uncertainty around travel regulations makes it hard to plan any sort of trips or leisure activities, with businesses like tour operators and restaurants taking the hardest hits.
The world being in lockdown has led to:
- Local and global travel restrictions
- Cancellations of bookings, flights, and planned trips.
- Border shutdowns
- Closure of popular tourist attractions, hotels, and travel companies
Museums, theaters, and popular places of interest have been entirely or partially closed. Among them the Louvre, the Tokyo Skytree, Shanghai Disney, the imperial palace in Beijing, and the Great Wall of China.
These and many other attractions reopened for a few months during the summer months while operating with reduced capacity due to the social distancing rules in place. But just when things started to get back to normal, they had to close down again after the second outbreak of coronavirus.
The pandemic affected significantly all sports events around the world. Euro 2020 was postponed for one year. Additionally, the Tokyo Olympic Games will now begin on July 23, 2021, and run until August 8.
Countries that rely most on holiday tourism like Spain, Greece, Malta, Cyprus, Turkey, and Mexico, experienced a massive decline in the number of tourists compared to previous years. This was further complicated by the ton of precautionary measures they had to implement.
These are just a few of the issues Covid-19 created in the leisure industry. And they have already cost businesses and governments billions.
However, the most significant challenge going forward is probably the fact that people are afraid to travel or can’t afford it anymore due to the losses they suffered themselves.
How governments and businesses responded to the crisis
In their effort to provide a rapid response to the situation, governments have been implementing precautionary measures since March 2020. Among them:
- Enhanced monitoring at ports and airports
- Closed transport hubs (airports, railway and bus stations)
- Closure of cruise and ocean terminals
- Prohibited group gatherings and travel
- Maintain at least a 1-meter distance
- Avoid unnecessary travel
Although these were regularly revised, they had unavoidably impacted the tour and activity operators worldwide. Tour and activity business owners observed a great decline in advance bookings and an increase in cancellations.
Still, governments and related organizations made a great effort to support the tourism industry and prevent it from collapsing by all means. Financial support for businesses and their employees were provided in all sectors. A number of grants and funds were released. Those who experienced even more financial hardships were offered to apply for loan payment holidays and tax release schemes.
In the meantime, tour and activity operators tried to make the most of the situation by targeting local markets and demographics. This practice was further supported by governments as they also promoted exploring the domestic tourism market during the pandemic.
How to minimize the effects of COVID-19 on your business
So let’s look at the bigger picture. What can you do in the face of declining bookings and increasing cancellations?
We prepared a list of best-practice ideas to help you handle the Coronavirus situation.
We all know the preventive measures to contain the virus on a personal level. Think of the actions below as similar guidelines but for your business.
Promote Gift Vouchers
While we’ve seen a big decline in overall bookings, gift voucher sales remain relatively stable. They can be redeemed at a later point so it’s less risky for consumers to make that decision.
If you’re looking for a quick way to boost cash flow, consider promoting gift vouchers in central places on your website and other channels. This will increase the likelihood of people making a purchase so you can make it through these difficult few weeks.
With Regiondo, you can activate gift vouchers and highlight them on your website so it’s the first thing your customers see. Click here for a step-by-step walkthrough.
Use Value Vouchers as refunds
As cancellation requests mount up, consider offering value vouchers instead of cash refunds.
Value vouchers have a monetary value (that you set) and they can be used at a future date. Think of it as credits for buying your services in the future.
So if you receive a cancellation request, ask the customer if they would like to receive the refund via a value voucher. Consider increasing its value so there is an extra incentive for customers to accept this form of refund. For example, if they spent 100 EUR initially, you can offer them a value voucher worth 120 EUR.
Yes, it could eat into your profitability in the future but it can help you in the short term so this crisis goes by without long-lasting consequences.
You can choose the value voucher option when you cancel a booking in Regiondo. Click here for more details about value vouchers.
Alter bookings to a different date
Another way to turn around a cancellation request is by altering the booking to a future date.
This might be a viable option for locals or people who changed their flight tickets.
In order to make this a more attractive choice for customers, consider upgrading their booking where possible. Perhaps, offer guests the flexibility to change or postpone up to 15 days before their travel/visit date.
Utilize employees in other roles
If unpaid leave isn’t an option, think of ways to improve neglected areas of your business with help from your current employees.
As fewer and fewer bookings come in, retraining your staff in new skills can prove useful during the crisis and later down the road.
This is a good time to review things like Standard Operating Procedures (SOPs), sales, and marketing activities so you are ready for a strong start once the crisis is over.
And if you’re paying salaries anyway, you might as well use the opportunity to improve areas of your business that don’t require customer interaction.
Negotiate your rent terms and supplier payments
If you’re renting an office, this might be one of the biggest expenses putting a strain on your budget during the next few months.
Try to negotiate a future payment with your landlord in a bid to reduce immediate expenses.
And this is also in their best interest. After all, if you leave or go out of business, they will lose their tenant and might have a hard time finding someone else.
It’s a similar situation when it comes to other suppliers – try to negotiate payment terms so you minimize current expenses. They might be willing to postpone payments to a future date or at least give you a discounted rate for the time being.
Review your financing options
While you don’t want to get to that point, if worst comes to worst, you need to be prepared with alternative financing options.
This could be loans or ideally government grants to get you back on track. No one expects this to last forever and many governments throughout Europe are offering subsidies to get businesses through the crisis.
So spend some time now to consider your financing options so you’re prepared if things get to that point.
Offer digital experiences
Many tour and activity operators found that digital experiences are a good option to boost revenue during the first wave of the crisis. Consider hosting digital and virtual experiences, that would allow people to enjoy a great tour from the comfort of their home.
For a detailed example of how to do this, check out this case study with ArtViva in Florence.
These are just some of the measures we’d recommend to cut costs immediately and try to boost revenue.
As the situation develops, we’ll keep posting new information to help get our customers and community through these tough times.
In the meantime, follow your government’s regulations and remember to always put your customers’, staff, and personal safety first.