Understanding and adapting to shifts in markets and societies that will shape new opportunities for tourism destinations and businesses.
The travel industry will look very different in 2025 than it did prior to 2020, but how do we reach 2025 stronger than when the decade started?
This is the final article in a 7-part series, co-written by Milena Nikolova (BehaviorSMART) and Simon Jones (NatureScapes), focused on understanding human behavior and how it impacts tourism in natural land-or-seascapes.
Tourism at a Crossroad
The travel industry is experiencing major shifts in the mentality of travel markets, tourism businesses, workforce and host communities. Some of these changes are in response to the ‘Great Pause’ in the sector as a result of the COVID-19 crisis; others are influenced by the larger reshaping of the societies we live in.
While the scale and depth of the changes can be daunting, there is a positive and optimistic path forward. These changes are a treasure chest for transformations and new developments that are especially promising for areas with abundant natural resources. Before the crisis some of these changes would have been impossible at the scale and speed they have occurred, but the crisis has changed mindsets and with it the possibilities for the future.
The last decade has seen a tremendous leap in our understanding of human behavior, including how people act and make decisions. This allows us to have a realistic perspective on the big picture as well as how travelers and tourism operators think and will respond to changes in societal, business and traveler context (the market mentality). These are all aspects of instilling human realism in the strategic thinking of destinations as the tourism sector moves forward post-pandemic.
With this article we outline the way we view the evolving future of tourism in natural land-or-seascapes and share some of our thinking about how the current disruptions can be turned into opportunities.
How the Limits on what’s Possible Changed
The COVID-19 crisis has touched every aspect of society, economy and us as individuals. This has produced massive change in our perceptions about what is possible and what is not, as well as changed our outlook towards the future. Among the major changes and trends that are certain to be shaping the future of the travel and tourism sector are a growth in popularity of nature and outdoor activities; an increased focus and awareness on sustainability and climate; an elevated importance of the benefits to local communities; new behaviors and expectations regarding health (safety) and wellbeing (happiness); flexibility in travel planning; remote working; technology and talent management. These can be grouped into three interlinked levels of change: societal, business and individual traveler.
Sustainability as Non-Negotiable
Sustainability and climate change have gained increased significance in our societies, building momentum during the pandemic to become one of the top priorities around the world. According to a recent analysis published by McKinsey on the top four societal and business themes of 2021, sustainability and climate change was one of the top areas of focus, along with staffing and technology, which will be discussed later in this article. Our societies are shifting, no longer considering sustainability as an option, but rather the required default. This new awareness has had a spillover effect on our industry with destinations and businesses recognizing that sustainability needs to be put alongside financial considerations at the top of the priority list when designing and servicing the tourism experiences.
Example: Signatories to the Glasgow Declaration
A clear example of travel and tourism businesses taking on climate change can be seen through the ‘Glasgow Declaration for a Decade of Tourism Climate Action’ and the hundreds of leading tourism companies and organizations that have signed on to act. The traveler demand for such action is also there, with “more than half of US travelers believe there aren’t enough options when it comes to sustainable travel” and “Nearly 70% of travelers say they are more likely to book accommodations if they know the property is planet-friendly” according to a recent article on travel trends for 2022.
What Tourism can do for the Destination and its Hosts
A mental shift is also occurring in many destinations in terms of the community relationship with tourism and tourists. We are seeing an acceleration in flipping of the historical narrative from what a community can do to attract visitors and support their needs to what tourism can do for the community and the relationship communities want to have with travelers and the travel industry. An extended period of time without tourism and visitors has been a unique chance for places to get a sense of what they are winning and losing from tourism. Many places are re-entering the post-COVID marketplace with clearer expectations and positions for what they now want out of tourism.
The New Community Awareness
An example of this mental shift can be seen in Hawaii where sentiment among local residents towards tourism became worse during the pandemic, with two-thirds agreeing with the statement that the Islands are being “run for tourists at the expense of local people.”
A 2021 Travel Weekly article on this subject sums this sentiment up “many destinations are using the respite to advance tourism management rather than tourism marketing plans, with an emphasis on more local input and control.” In Hawaii this includes plans to limit visitor numbers to high traffic sites through reservation systems and educate visitors about local culture and nature to play a role in enhancing, rather than detracting from the islands.
It’s not just residents of a destination that have this demand; according to a Booking.com survey of 24,000 travelers around the world, “over half (58%) of people agree it’s important that their trip is beneficial to the local community at their destination. Additionally, 68% want the money they spend when travelling to go back to the local community, and 73% want to have authentic experiences that are representative of the local culture.”
This shift in community awareness will require new principles of doing business and tourism planning. On one side, greater inclusion of community members will have to go beyond those directly involved in tourism and ensure tourism benefits and planning are guided by the community themselves. On the other side, this strengthened focus on the local place and people is fueling changes in the way that service providers are doing business and how they need to adjust their business models.
Moving to Transparent Business Models
ASI Reisen, a high-end operator for outdoors and adventure experiences based in Austria, used the pandemic to develop and adopt a principle of radical transparency to the way it does business. This influenced two main areas – its climate footprint and the local economic value creation. As part of this adjustment, today ASI Reisen carefully tracks the impact of every itinerary on the local economy across the destinations it operates in and constantly makes adjustments that help ensure that value goes up.
While in the past we could differentiate between travelers who like to plan well ahead and others who are last-minute indulgers, today everyone must be prepared for last-minute changes. Constantly changing regulations, peaks and dips in infection rates and related disruptions force businesses to accept permanent flexibility with their cancellation policies and shifts to much shorter-term planning for their service offerings, marketing activities, revenue planning, etc. Travelers will likely become used to this flexibility and continue to expect it even beyond the pandemic, which will mean that operational models of tourism service providers will also need to adapt.
The Loss of Talent with Long-Term Implications
The shortage of talent has become one of the most significant challenges for business in the travel and tourism industry in 2021 and looks to continue well into the future. A recent article in The Economist stated that on average 700,000 US workers in the tourism and leisure sector quit their job each month in 2021. Some moved to new opportunities but many left the sector, or the workforce altogether. Major reasons for this exodus included psychological exhaustion from fear of infection, dealing with angry customers, enforcing health mandates, unpredictable schedules and other stresses. According to data referenced in The Economist article, the hospitality sector was rated as ‘one of the worst for work-life balance,’ and during the pandemic employees have been reflecting on their priorities in life, work and job security.
Employers have responded with an average increase in wages in the US tourism & leisure sector of 8.1% year-on-year in the third quarter of 2021, the highest increase on record. However, pay may not be enough on its own as employees also look to other benefits such as leave, stable schedule, career advancement and other factors. In the current labor shortage, employers are also competing with other sectors for employees, meaning a re-evaluation of staffing practices and much more attention to the needs of employees is critical to retain and attract people to the sector.
Individual Traveler Change
Back to Nature
A return to and growth in nature and outdoor activities was a trend before the pandemic, but got a huge boost from people’s desire to be outside and distanced from others during the pandemic. Visitation to iconic national parks in the US, such as Grand Teton and Zion saw a 20% increase in the summer of 2021, versus 2019 numbers, demonstrating the new demand but also causing overcrowding issues. Now that these new nature lovers have a taste of the outdoors (and invested in the clothing, equipment, etc. to enjoy it) they will likely continue to do so even after the pandemic subsides.
The Demand for Nature
“Over two-thirds of travelers (69%) will look to appreciate more simple experiences such as spending time outdoors… Over half (56%) will seek out more rural, off-the-beaten-track experiences to immerse themselves in the outdoors.” Booking.com
In addition, the return to nature and the new sensitivity to ecosystem services (the services and benefits we extract from nature) are feeding efforts to bring back nature into everyday life, i.e. to make cities greener and to encourage people to spend more time outdoors both as a way of improving the quality of their lives but also as a way of tackling health problem.
Greening our Everyday Lives
Numerous cities across the Americas, Asia and Europe are investing in green developments responding to the desire to make the urban living environment more integrated with nature and biodiversity. From the Vertical Forest prototypes in the Porta Nuova area of Milan, through The Gate Heliopolis in Cairo and the spectacular Jewel Changi Airport in Singapore there is plenty of evidence that the infrastructure and urban environment of the near future will be closely intertwined with nature and biodiversity. This includes nature within city borders and the connection between urban and rural regions.
The demand for reconnecting everyday living with nature will produce new economic models and investments that place nature at the core of business and community. These big-picture shifts represent an exceptional opportunity for nature-based destinations to take a look at their existing economies and enhance them with new businesses, new models and diversified offerings. New thinking around sustainability, circular economy and net zero are also inspiring new investment mechanisms and are opportunities for adding new building blocks to nature-based economies.
For example, the freedom to work remotely, discussed later in this article, is fueling demand for extended trips combining the ability to stay professionally active while having opportunities for outdoor recreation. Growing awareness about the mental footprint of the pandemic and the rejuvenating powers of nature are also an opportunity to expand offerings that support wellbeing by helping more people recover physical and mental wellbeing through a connection with nature.
Southern Sweden is home to one of the most unique examples of experiences that are designed to support the recovery of physical and mental health through an immersive natural experience. The 72-hour cabin is a small glass structure that is positioned in a remote natural space allowing guests to disconnect from modern life while enjoying a nature experience. Experiments have confirmed that a single stay in the unique cabin has a real impact on the health indicators of its guests.
Back to Human
Our health and wellbeing, including safety protocols relating to social distancing, masks, etc. and our mental health have increased in importance around the world. Although some health and safety protocols will likely be removed once the pandemic has subsided, the mental programming that has occurred in us all will keep these issues a high priority for travelers (as well as employees) well past the pandemic. This will likely include cleaning protocols, managing people in crowded spaces and heightened sensitivity to anyone that may be sick (traveler, staff, or others) even if it’s not COVID related.
Even before the crisis the importance of human happiness as a measure of societal success was engaging government and business leaders. Growing awareness on the mental health impacts of the pandemic as well as the increased value of perceived wellbeing (i.e. happiness) are becoming even more important, and are likely to persist.
The WTTC and Harvard University recently published a report that proposed a ‘Cultural Health Framework’ be woven into efforts for a sustainable recovery of the tourism sector. A related article by Milena Nikolova (Behavior SMART) and Wendy Purcell (Harvard) on the shift from triple to quadruple bottom line, proposes that health and wellbeing are emerging as a fourth pillar of tourism sustainability, sitting alongside the pillars of economy, society and the environment. This reinforces other changes in our societies emphasising the importance of the wellbeing of our communities and ourselves.
The quadruple bottom line - the new sustainability paradigm
Source: W.M. Purcell and M. Nikolova. 11/18/2021. “WORKING PAPER SERIES: Pursuing Sustainability in the Travel & Tourism Sector From a Triple to a Quadruple Bottom Line Sustainability: The Case for Adding ‘Health and Well-being’ to Sustainable Travel and Tourism”.
The elevated importance of physical and perceived wellbeing are a tremendous opportunity for the travel industry. After all, the essence of travel is to help people relax, recover and rejuvenate. Many of the elements that are part of travel experiences are ingredients for human happiness. Things like disconnecting from technology and spending more time on togetherness and relationships; enjoying slower and more mindful moments; accomplishing something and experiencing a sense of achievement, or learning something new are all aligned with increased sense of happiness.
Destinations with rich natural resources have an advantage, as nature is increasingly seen as a source of rejuvenation and wellbeing. With smart efforts and targeted innovation, local tourism providers can enhance and adjust their offer to ensure that they create more opportunities for togetherness and relationship building; that they encourage less screen time and more connection with nature as well as present exciting opportunities for trying something new.
Technology and Digitalisation
Technology, such as touchless payment, check-in and customer service systems like United Airlines “Agent on Demand,” as well as virtual guides and online ‘chatbots’ will also likely persist after the pandemic. These tools have seen a surge in uptake in the last two years. Using technology to manage the flow of visitors has also seen a significant uptake. For example at many zoos, museums and national parks online reservations are required, providing visitors with specific times when they can arrive and limiting visitor numbers. Although not all of these will remain, some are likely to be adopted permanently, especially in popular/overcrowded tourist destinations. This greater use of online systems also provides for better data to understand traveler behaviors and to serve as an opportunity to influence flows and preferences in real time (i.e. by informing visitors when certain areas are busy and suggesting the next optimal time for visitation, etc.)
Blending Work With Leisure
With a shift in the workforce towards remote or hybrid working, the flexibility people have on where they conduct their work has greatly increased, and will likely stay. This provides new opportunities to attract visitors to a destination for longer and mix work with pleasure; however this mixed work/leisure travel is not for everyone, so hosts will need to weigh their offers to accommodate longer stays and the more traditional, shorter holiday visitors.
‘Workation’ or Keep Work and Vacation Separate
According to a 2021 study by Booking.com, 69% agreed that incorporating remote working before or after their vacation is a good way to extend their time in a destination. But… 73% said they wanted to firmly re-establish vacation time as strictly work-free, and 59% would rather spend less time on vacation if it meant they could completely switch off.
What Does This Mean for the Future?
The crisis of the pandemic will go away someday… hopefully soon, but the changes and psychological legacy in markets, business operations and society will remain. Some will become permanent while others will define living for at least the near future.
A smart path to recovery involves planning for the tourism context of the future through a realistic market mentality prism. This includes understanding the models, solutions and traveler behaviors that are likely to impact or hold opportunities for their future. Our suggestion is that a market mentality approach has several important layers that consider:
The large-scale trends and dynamics shaping the global and regional tourism marketplace
The evolving knowledge we have about human behavior in the context of how people will travel in the coming years, and
The developing economic and societal models of the future
Once these relevant dynamics are mapped, a collective and focused effort can ensure that no one wastes time going back to business as usual (pre-pandemic) as those markets have changed, and that destinations embrace the opportunities in the new markets that are currently evolving.
With a good understanding of the paths that lay ahead, nature destinations have a tremendous opportunity to grow their tourism economies in ways that benefit local people, protect the land-or-seascape and enhance the experiences offered to travelers.
Abraham Lincoln is quoted as saying:
‘The best way to predict the future is to create it.’
We now have the opportunity to create a better future if we can map the path that will get us there.
Additional examples of behavioral tactics in the travel sector can be found in other articles in this series.
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