29Oct2020

The hard lesson of Covid

What have we learned from recent events?

At the end of this -short- season, the only certainty is that we will remember it for a long time.

Only a few months ago, at the beginning of the lockdown, we were confronted with the fragility of the tourism system: no one would have ever imagined that destinations normally crowded with overseas citizens (with a booking window of 6 months or more) would have struggled to sell "under date" despite reduced prices.

In many famous locations, a sort of conversion was necessary: for years, proximity tourism had not even been an option.

And yet, this has also helped to learn that depending too much on one market can be dangerous and that "local" tourism is not necessarily undesirable

I don't usually judge the work of others, but in this case I can't resist: it's touching to read many experts from famous companies that deal with revenue flaunting successes achieved in the "covid" summer: if this were to be a customer acquisition strategy, I would recommend some alternatives. At least be intellectually honest and avoid attributing undeserved professional successes.

It's obvious that the destinations that already thrived on proximity tourism have in many cases had an increase: the equation is easily solved by thinking about the fact that many Italians have conscientiously limited their movements or have been unable to reach foreign countries.

Let's now move on to the question of the moment: what will happen next year?

Sure, making a prediction would give us a good margin of success and next year we could proclaim ourselves visionary Gurus and go on the various industry forums to show off our skills.

But we, in exercising our analytical work, strive to follow events and interpret the signals they offer, without throwing them out at random.

Now, the fact that the major online sales portals are cutting back offices and personnel is a well-known fact. Just think of Booking.com Holding: in the second quarter it recorded a loss of 376 million dollars and the consequent dismissal of about 4000 employees worldwide. The same applies to Expedia which, in the same period, posted losses of 577 million dollars and dismissed around 12% of its employees as early as last February.

But the question is how is it possible for giants that have been making monstrous profits for a long time to get into trouble for just one year of losses.

The answer can only be this: their analysts do not foresee a return to (their) normalcy anytime soon. And to be oversized for another few years would be a financial emergency.

I find very interesting some articles by my colleagues (this time esteemed) who, already at the beginning of the epidemic, logically hypothesized a change in the booking habits of potential guests.

Let's always take our domestic market as an example. 

In most cases, what has increased appreciably is the percentage of disintermediation and, in this case as well, the reasons are anything but certain.

Our nationals do not like to book with certain portals that are normally the prerogative of overseas citizens and, although this circumstance has led to a relative strengthening of players that are usually strong in the domestic market, our potential guests have begun to understand that sometimes calling the hotel and asking for a quote can be more convenient than buying from "third parties".

 

In just a few months, everything has changed.
It's not only the histories on which we relied that have lost all value: even the usual strategies, like many of the models we use, need to be rewritten at this time.
Communication, flexibility and great adaptability: that's what I'd bet on.  
Let's not lose the good things we have learned from this negative experience and, for the near future, let's be more careful than ever in picking up the warning signs.
All the rest is probabilistic chatter.

francesco d’acunto
 

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