How Will the Travel and Hospitality Industry Survive When We’re All Grounded?
We’ve been covering different industries and the effects COVID-19 is having on them, as well as some advice on what brands within these industries can do right now. So far, we’ve talked about restaurants, retail, CPG, covered loyalty and messaging, and shared expert resources on the topic, all of which you can find here.
The one industry that’s fallen to me is travel and hospitality. As my coworker put it, things for these folks are grim.
And it’s true. With travel restrictions in place for every state, travel bans in many countries, major events canceled, and business travel all but stopped, there’s not much need for flights, hotels, rental cars, or destinations.
The effect of this standstill with no end in sight is devastating. It’s devastating to the brands and tourism destinations that have to close and it’s devastating to the workers who have to choose between collecting a paycheck or their lives. According to Barrons, 4% of working Americans are employed by the hospitality industry. And within the U.S. tourism industry, it’s expected that 5.9 million jobs will be gone by the end of April.
Truthfully, there is no amount of marketing strategy that could save those jobs right now or turn the outlook of the industry around immediately. It relies entirely on an influx of people giving into their wanderlust, businesses booking travel, and worldwide events; all of which can’t happen currently. So, this post will be offering advice in the way we think is best — taking action now that will set the stage for the future, when we are all free to explore, visit, and enjoy life once again.
First, realize consumers are having a difficult time
Airlines, theme parks, hotels, and ground transportation are hemorrhaging money right now, so why should they be focusing on their customers instead of themselves? Because right now consumers are scared; according to Forrester, 52% of U.S. adults (surveyed online) said they prefer to buy from a company that shows how they’re protecting consumers against the threat of COVID-19. The brands that are, right now, focusing on “people, not profit” are going to be the ones that stick in consumers’ minds when this is all over and wallets and borders are open again.
Airlines may have the hardest time digesting this. They’re currently looking at massive waves of layoffs, asking for bailouts from the government, and have no idea when they’ll be able to ramp up flights again. It’s a seemingly insurmountable feat, to survive in this climate.
But what airlines can do is keep moving forward. Yes, there will be layoffs and groundings, but people will come back. Currently, the airlines that are offering refunds and flexibility with cancellations will be remembered by their customers. Delta, American Airlines, and United Airlines are all offering flexible cancellation policies or vouchers for trips. Southwest, which has always offered free changes is extending its voucher dates by a year.
The airlines that choose to hide fees, penalize customers, and make their refund policies more complex and confusing — you’ll absolutely be remembered.
Then, engage with your loyal customers
Known for some of the best loyalty programs out there, hotels are facing similar challenges (closings, furloughed employees, etc.) but are well-positioned with a database full of engaged customers. Even though we’re stuck, the desire to travel is high and hotels should capitalize on that feeling with digital campaigns that encourage and reward it.
Lots of people online have been saying, “I wish I was on a dream vacation right now.” This is the perfect time for hotels or other travel and tourism brands to talk to consumers and ask questions. Where would you like to be going? What would you like to be doing? How can we look to the future? With flights being canceled and airlines offering up vouchers, why not start looking to build a package for this summer or winter?
But it’s not just about building a one-size-fits-all package. This is the time to take those answers and tailor the package to the individual consumers who respond. This way, you’re adding value for that customer all while building a true profile on who they are, which can be built on in the future when the sun comes out again.
Also, this is not the time for loyalty members to lose their status in your program. Reassure members that their status will remain unchanged even if they don’t get the chance to travel this year.
Next, destinations, share your appeal
Just because none of us can leave our houses right now doesn’t mean that we aren’t still dreaming of travel. And that’s something Greece is counting on.
Accepting our reality — that no one is traveling anywhere soon — Greece has created a travel campaign called “Til Then, #StaySafe.” By showing stunning landscapes and potential adventures in Greece, they’re banking on keeping their destination top of mind, while also respecting travel restrictions and encouraging their future visitors to take recommended precautions. It inspires warm feelings and a positive outlook.
Scott’s Cheap Flights, which really isn’t a destination or mode of travel, but promotes travel, is also looking to the future. The emails with spectacular deals are still coming, but only for travel that takes place after July and only the organizations that are offering flexible change and cancellation policies are being prioritized. Scott’s appears to be taking Forrester’s advice — looking out for their customers by putting in the extra legwork to make sure their deals don’t saddle their customers with extra costs.
For those instant gratification people — why not offer a tour of your destination right now? The Shedd Aquarium charmed a nation when they let their penguins experience the aquarium as people do, looking from the outside in. The National Park Service has partnered with Google to create interactive virtual tours of their parks in a series called The Hidden Worlds of the National Parks. Paris may be shut down, but that doesn’t mean its museums are idle — the Louvre is virtual tours of three historic collections.
In times where we’re all cooped up, the fact that destinations are offering immersive experiences of these beautiful places will leave an indelible mark in the minds of would-be travelers.
Now, build out that database
This advice works for any industry, really. It’s to build out your database and to populate it with the psychographic data consumers have willingly shared with you so that when it does come time to travel again, you can be right there with a discount, reward, or helpful advice personalized for them.
Hospitality and tourism brands and organizations, like the ones mentioned above, have pivoted from providing a physical, in-person service to building awareness and engaging and entertaining their customers. And this is exactly what they should be doing because these strategies can be used to divert and amuse consumers while also gathering the personal and preference data that can inform campaigns in the future.
Many brands and organizations are offering their experiences for free, that is, no signup or information needed. That’s wonderful! People across the world can tour a park or visit a museum exhibit, without sharing any information. When things return to normal, it’s these brands that will sit highly in the opinions of consumers.
But it’s also okay to engage in consensual data gathering by offering a value exchange — a giveaway, a virtual experience, free car rentals for healthcare professionals — in exchange for a consumer’s data that they voluntarily and willingly give (we call it zero-party data). Travel and hospitality brands can start this right away, either by using a platform like Cheetah Digital to create exciting experiences for consumers, or using your own tools. It is something brands can do starting today.
Finally, know that the industry will recover, but it will take time
Optimistic estimates put recovery at 6-12 months for the travel and hospitality industry. That’s a long time, but it’s one that a little ingenuity and a good strategy can overcome. By leaning into creative experiences and building out databases with good and accurate information, the industry can prepare for the upcoming shift. Most importantly, the sooner we get the industry back on its feet, the sooner we can get people back into their jobs.
We're offering our insights and guidance to
help marketers address the impact of COVID-19