- Tourism is a critical economic driver in Latin America, a region hard hit by COVID-19.
- Strategies that leverage competitive advantages and traveler concerns can help this sector recover.
With millions of COVID-19 cases, Latin America and the Caribbean have been among those hit the hardest by the virus. Borders are slowly reopening, however, and as they do, tourism will be important to these regions’ recoveries.
“Although international travel has temporarily slowed, a key driver in Latin America is domestic tourism,” says Carolina Lacerda, Senior Vice President of JLL’s Hotels & Hospitality Group.
Reviving and supporting tourism will take ongoing collaboration and strategic thinking from both the private and public sectors. Policymakers and industry stakeholders must think strategically to improve the region’s competitiveness, while maintaining its authenticity, in a post-COVID-19 world.
As they plan, these 6 strategies will be important to the recovery of these regions.
What is the World Economic Forum doing to manage emerging risks from COVID-19?
The first global pandemic in more than 100 years, COVID-19 has spread throughout the world at an unprecedented speed. At the time of writing, 4.5 million cases have been confirmed and more than 300,000 people have died due to the virus.
As countries seek to recover, some of the more long-term economic, business, environmental, societal and technological challenges and opportunities are just beginning to become visible.
To help all stakeholders – communities, governments, businesses and individuals understand the emerging risks and follow-on effects generated by the impact of the coronavirus pandemic, the World Economic Forum, in collaboration with Marsh and McLennan and Zurich Insurance Group, has launched its COVID-19 Risks Outlook: A Preliminary Mapping and its Implications - a companion for decision-makers, building on the Forum’s annual Global Risks Report.
Companies are invited to join the Forum’s work to help manage the identified emerging risks of COVID-19 across industries to shape a better future. Read the full COVID-19 Risks Outlook: A Preliminary Mapping and its Implications report here, and our impact story with further information.
Strategy one: Target Millennial travelers
Last year, Millennials outnumbered Baby Boomers. Because of this, the next big wave of travelers is expected to be from the Millennial generation. According to a recent Skift Research piece, many Millennial-focused travel trends today focus around personalization and technology. With this group having the ability to work from home and bring their technologies virtually anywhere, incorporating highly personalized experiences and incorporating enhanced technology will be key in attracting this large group of travelers.
Additionally, Millennials seek authenticity and unique travel experience, making Latin American and the Caribbean a perfect fit. Millennials are adventure-seekers, so promoting the experiences that Latin America has to offer will be a major selling point, such as outdoor activities, hiking trails and sightseeing.
Strategy two: Strengthen small businesses
Smaller hotels and “mom-and-pop shops” deliver unmatched authenticity to travelers and are critical economic engines for their regions. New thinking on small business financial support in the future will be vital to tourism stability. A trend to keep an eye out for is the affiliation of smaller, independent hotels to soft brands, in which an independent hotel joins a chain or franchise-type of hospitality group, in order to get into larger hotel chain distribution systems. This allows opportunity for the smallest of hotels to have access to larger distribution and the tools to help manage day-to-day operations and investing where needed to make sure hotels follows the brand standards.
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Strategy three: Stay competitive
Prior to COVID-19, tourism growth in Latin America was increasing in competitiveness. The 2019 WEF Travel & Tourism Competitiveness Index shows that 12 of the 21 Latin American and Caribbean countries increased in competitiveness since 2017; including Bolivia, Colombia, Uruguay and the Dominican Republic, with Mexico ranking within the global top 20. The region’s prominent adventure travel scene, beautiful landscape and rich culture have been important in generating international travel in the last few years. Additionally, the region benefits from a plethora of natural resources, increasing international openness and offers viable prices for travelers.
To rebuild, these regions must devise creative ways to improve competitiveness and for destinations to differentiate themselves. A way in which this is being done is by creating touristic routes based on different natural resources. For example, Peru has done this well by dividing the country into different routes, each focusing on different attractions specific to that region’s culture, such as archeology sites and museums related to Moche culture. Promoting tour destination is very important, especially during a time when every traveler is critical, so tourists are aware of the various opportunities.
Strategy four: Highlight health and hygiene efforts
Health and hygiene will be at the forefront of traveler concern, so continuing to implement the latest suggestions provided by healthcare leaders, such as the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO), is critical in earning back guest confidence.
Health and hygiene will continue to be a focal point across the globe. Increased awareness related to health presents an opportunity to go beyond standard implementations and focus on the visitor’s overall experience and greater well-being on a broader platform.
Additionally, destinations will need to partner with their cities’ policy makers and local governments to help rebuild and form conversations around an economic, health and tourism flow management policies to help ensure infrastructure is prepared for travelers that go beyond the pandemic.
Highlighting quality guidelines and certifications can also show travelers how businesses and hotels are taking their safety into account. For example, Mexico’s tourism represents 9% of GDP and destinations in that country have focused on safety certifications, such as the Safe Travel Stamp, launched by the WTTC. “Mexico has been on the forefront of certifying that destinations are ready for tourists,” says Lacerda.
The WTTC, leveraging expertise from WHO and the CDC, created this stamp to recognize businesses that adopted health and hygiene global standardized protocols. The United Nations’ World Tourism Organization (UNWTO) endorsed the stamp, with more 200 destinations requesting to use the stamp to promote their commitment to cleanliness.
Such stamps can help communicate that your tourism sector is taking safety seriously. Guest and employee trust, safety and sense of destination commitment are imperative for succeeding in the future, whether or not the world reaches a second wave of COVID-19 in the near future. Effective communication is critical in vocalizing what your hotel, and the destination, is doing to go above and beyond regarding safety and the overall health of the visitor.
Strategy five: Embrace digitalization
To drive tourism’s recovery, investments in digitalization will be critical. According to the Forum’s Latin America and Caribbean Travel & Tourism Competitiveness Landscape Report, digital natives such as online travel aggregators, meta-search engines, travel service platforms and sharing economy players will have a distinct advantage in the months ahead.
Given lockdown restrictions and consumer anxiety surrounding person-to-person proximity, the need to go digital will become even more necessary as travelers will want to do most things online. While addressing safety concerns, online and contactless access to amenities and booking will also allow for better convenience and personalization for the traveler. These digital experiences will start the moment guests leave their homes and continue throughout every step taken to their final destination.
Digitalization will also play a role in delivering classic amenities that guest will still expect. Restaurants, and spas may introduce digital menus and mobile capabilities, for instance. Ordering room service and talking to the concierge will need to become mobile-friendly is a must for hotels to maintain their amenities. These changes, while key for the immediate term, can also strengthen the resilience of travel businesses in the longer-term, as systems adapt to more nimble and modern technologies. Such investments for enhancing technology in Latin America will become a key focus for a range of sectors, but also tourism.
Strategy six: Focus on conversions
There’s opportunity for conversion in the independent and private sector of hospitality. The high proportion of products from this sector can become the fuel needed for more distribution power. An improved support structure for smaller local and regional owners may translate into an improved unique experience for travelers in the future. That said, a key opportunity for independent hotels is creating incentives to lower the customer acquisition cost and create less dependency on higher-cost, third-party channels. Conversions may also pick up speed due to cost-effective distribution and enhanced brand awareness.
Regardless of the business, one thing will not change: locally-driven and unique experiences will continue to be at the forefront of appealing to guests. New strategies for safety and digitalization will only fuel the delivery of those unique experiences.
The day-to-day efforts of all industry professionals, from hotels, airlines, tour operators, the government and more, will work towards that common goal. Being aligned and working together is key, given tourism’s immense impact in Latin America and Caribbean. The only way is forward together.
On the road to recovery, industry leaders must strengthen their commitments to safety, authenticity and hygiene to retain traveler trust. With these elements in place, tourism can continue being an engine for the Latin American and Caribbean regions and ensure these areas have the resilience they need to weather the current crisis and the ones to come.