April 24, 2020 infosol

Undercurrent 12: “Do Not Disturb” Sign on the Door of Hospitality Sector

19 Undercurrents with Ramifications That Go Beyond Twenty 20

  • Global Quarantine: The largest “Staycation” ever in mankind’s history – the whole world is grounded
  • WTTC (World Travel & Tourism Council): 1 in 10 jobs (330 million) worldwide are in travel & tourism
  • The organisation also highlights that 11% of the global GDP is derived from the sector
  • 2018 largest source market for global travel & tourism sector: China with 150m outbound travels
  • Spending close to $277bn which is more than the GDPs of Finland, Vietnam or Egypt
  • Worth mentioning that only close to 140m Chinese have passports – tip of an iceberg: future potential
  • COVID-19 has been the biggest challenge in history of Travel & Tourism sector
  • China: The epicentre of the pandemic & the epicentre of future growth for the sector. What Next?

 Keep an Eye On

With the growing finger pointing, and political dodgeball between major capitals, there is a chance that many countries unknowingly will develop the wrong socio-cultural antibody in form xenophobia towards foreigners at large, and in particular develop a bias towards Asian nationals and Chinese in particular.

According to China Tourism Academy 84% of the Chinese outbound tourists are young and all under the age of 45. This means that their experiences and the way they will be received in a post COVID-19 would influence their travel, education and investment decisions for decades to come. Why this matters?

Because China is the largest source market in the world and only 10% of the population have passports.

In other words, the future of hotel and hospitality hinges on the expenditure of Chinese tourists for years to come. The Welcome Chinese Certification an initiation led by China Tourism Academy and one that many EU countries have already adopted and applied the process to their markets should be revisited. Hosting destinations, countries have to be very clear about their travel and tourism strategy in a post pandemic era. This would entail not only being fixated on medical tests at source or arrival, but also more importantly how to robustly develop the re-engagement travel and tourism strategy. The bounce matters to all primary, secondary and tertiary jobs in the sector and beyond.

The future of travel and tourism is essential not only for sectors like retail, fashion, F&B, arts and museums but ever more so for diplomacy, cross cultural pollination and a better understanding between nations. Being carried away and responding with emotions rather than pragmatism and wisdom can have its own secondary economic blowbacks and more daunting geopolitical costs. Name calling a virus is a slippery path; as much as Zika Virus was not called Rio or São Paulo Virus Corona Virus should not be called Wuhan Virus too.

Travel and tourism sector also has a direct and interrelated impact on the education sector. Universities have been around for centuries, and the academic sector is heavily reliant on the industry for its sustenance as it is the1st exposure and touch point. Parents visit countries, like what they see in safety and security and then send their children and invest which also has a direct impact on real estate /construction and student accommodation affecting all other economic sectors. Close to £7.5bn was spent by Chinese students alone in U.K in form of tuitions in 2018-19. Add other nationalities and you will soon realise that an estimated £10-11bn of international student fees is the backbone of hard needed R&D budget that many U.K universities need a post Brexit world. Many of the shortcomings, underinvestment in research and manufacturing capabilities were highlighted in these health crises in the U.K and across E.U.

One of the most important ways of positively influencing a country is not always at home and on its turf but abroad. In light of these latest crises, we should not forget that only after Deng Xiaoping’s Open Door Policy China saw the world, it thrived, aspired and wished to emulate, join and develop it’s own socio-economic model from which both China and the world have greatly benefited from. With all the fair and unfair criticism of China at times, a far more engaging and responsible China is far better choice than an isolated China.

I once read “Little Things Matter & Those Who Say They Don’t Have Never a Spent a Night in a Bed with a Mosquito.” We should pay pragmatic attention in how we intend to deal and engage with China moving forward.

Do Not Disturb sign on the door of U.K and other countries can’t help the travel and tourism sector.

Ali Borhani is the Managing Director of 3Sixty Strategic Advisors Ltd. It is the readers’ responsibility to verify their own
facts. The views and opinions expressed in this article/commentary are those of the author’s and do not necessarily reflect the official policy or position of any other individual, agency, organization, employer or company.