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Expert: Now is the Time to Start Planning for Industry Recovery

TORONTO — For the last few years, industry analysts have predicted clear skies ahead, barring any unforeseen circumstances. The unusually long-lived positive cycle even caused some anxiety, as it was well known it couldn’t last forever, but there was no clear sign of when the bubble was going to pop.

Enter the coronavirus (COVID-19) outbreak.

In a statement on March 11, federal Health Minister Patty Hijdu indicated that between 30 and 70 per cent of the Canadian population could become infected with COVID-19, depending on the scope and scale of measures taken to combat the spread.

Public health officials have stated they won’t prohibit mass gatherings until the outbreak is more widespread.

Concerns surrounding mass gatherings have grown in light of news of Ontario’s first suspected case of the virus’ community transmission, which officials believe is linked to the patient’s attendance of a conference in Toronto in early March.

Health Canada has advised Canadians against cruise-ship travel (the U.S. State Department and Centers for Disease Control and Prevention have also issued an advisory) and there is growing concern surrounding the impact the outbreak will have on Canada’s costal destinations reliant on cruise ships as part of their local tourism.

Some experts have suggested that B.C. cruise-ship season, set to launch April 2, be delayed. In Atlantic Canada, destinations such as Saint John are also anticipating COVID-19 will impact tourism. According to CBC News, 90 cruise ships totalling 200,000 passengers are currently scheduled to visit the city during its 2020 cruise season, which is set to start April 24. Transport Canada is reportedly meeting with stakeholders in order to determine how to handle the matter in relevant destinations.

“The single biggest challenge that we have right now is this has evolved from being…an isolated issue for China to a global tourism issue,” Greg Klassen, partner, Twenty31 Consulting, explained in early March, noting the steps the industry needs to take to react to the situation is something of a moving target. He pointed to traveller confidence as key factor that will impact the industry this year.

“It’s the unpredictability right now that is making it hard to determine where investments should be made,” Klassen said. “The third quarter is the bread and butter of Canadian tourism…so we’re at a critical point in the market planning and for our target audiences to determine where they’re going to visit.”

“North Asia is probably not a solid market that we can rely on this summer,” he pointed out. However, at the beginning of March, Twenty31 conducted focus groups in Germany and the U.K. — featuring participants that represent higher-yield, highly educated, frequent travellers — and found that participants were largely undeterred by the outbreak.

”Looking at the most intrepid of travellers — the ones that travel to destinations that are inherently risky already — they probably will shake this off a little bit and say ‘I’ll just add that to the list of other risks that happened [while travelling],” said Klassen. “For those people who want the security of a coach tour, it’s possible that they may consider not travelling this year because they’re already nervous about the inherent risks that happened when travelling to other countries.”

”If destinations focus on the most intrepid of travellers, they will fare well,” he noted. “But, of course, we can’t rely on that one group of travellers — we have to cast our net wider into other types of target audiences.”

When asked what Canada’s tourism industry should be doing to prepare for the challenges ahead, Klassen, who was the Canadian Tourism Commission’s (now Destination Canada) SVP of Marketing Strategy and Communications during the 2003 SARS outbreak, said: “First and foremost, they should prepare for doing market research — that means putting together their objectives of the research, identifying an RFP or research company and [getting] their questionnaires set up…the second thing is consider their short-term response strategies…based on what the research has told them.”

But, Klassen added he doesn’t recommend doing market research until there’s evidence the virus has been contained. “Post containment of the virus is the time to start to pull out emergency-management plans and determine where they’re going to get some short-term results,” he explained, adding “hotels need to perhaps consider their tolerance for either added-value [offerings] (i.e. third-night-free) or even dropping their rates this year…There’s scenario tests that they need to do.”

Klassen also suggests working with local destination-marketing organizations (DMOs) to develop packages and compelling offers to help attract additional visitors. The company has released three reports analyzing the state of tourism as the COVID-19 outbreak has progressed and outlining strategic approaches to the situation, which are available on twenty31.org.

Many industry organizations have been analyzing the situation and relaying information as the situation develops. In its latest statement, released March 10, Destination Canada said:
“As the national tourism marketer, we are working with our partners across Canada and in our key markets to maintain growth in this important sector. Destination Canada has a diversified set of markets, which allows us to show continued overall growth even when some markets soften due to factors beyond our control. Our strategy places emphasis on not just arrival numbers but high-spend visitors and looks to broaden travel across shoulder seasons and winter, as well as lesser-known regions.
We will continue to share data, market intelligence and industry analysis with our partners to ensure we are promoting relevant, meaningful content to our audiences and driving the visitor economy forward.”

The Hotel Association of Canada, as well as many other industry organizations, has aggregated a list of key resources to help keep the industry informed on the current public health situation, travel advisories and workplace best practices.

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