The State of Travel is on the Road to Recovery

The hotel industry has been hit exceptionally hard by the coronavirus outbreak - commonly known as COVID-19 - leading to both global and domestic travel coming to a standstill, while major business and sporting events have been deferred or cancelled.

However, some promising signs of recovery in the hotel industry are being witnessed in China and South Korea - countries that were among the first to be affected by COVID-19 and have been successful in managing the effects in recent months. This, in turn, might help shed light on the potential path of recovery for other markets.

As the world slowly recovers from the effects of COVID-19, coupled with the gradual lifting of travel restrictions in several countries, hoteliers are now preparing their properties to re-open. However, hoteliers will need to note that the recovery will vary across properties as it is dependent on various factors. These include location, economic conditions, demand profile, chain scale, the extent of the opening of the travel market and the effectiveness of containment measures.

Nonetheless, there will be a few elementary areas to be considered by hoteliers as they plan for the reopening of their properties.

Destinations such as New Zealand with a considerable domestic travel market are expected to see a faster recovery than others

Domestic travel and weekend leisure to lead the way forward

Domestic travel will return first while international travel - particularly if it involves air travel - will take a longer time to recover. As such, destinations with a considerable domestic travel market that are less reliant on international travel demand and air travel are expected to see a faster recovery than others. Destinations which are advanced in establishing a wide travel bubble network should see a comparatively faster recovery.

Expected speed of recovery for destinations in Asia-Pacific and key risk factors

The weekend leisure segment is expected to lead the recovery, driven by the pent-up demand for travel as international travel restrictions and quarantine measures remain largely in place globally.

Underpinned primarily by essential business travel, the corporate travel segment is expected to be the next to return, followed by the extended leisure segment. Consumer and traveller confidence will increase over time, alongside the lifting of international travel restrictions.

The weekend leisure segment is expected to lead the recovery of the travel market, driven by the pent-up demand for travel. Several hotels in Singapore have been approved to reopen for staycations

Key drivers for travel market segment recovery and key risk factors

Meetings, incentives, conferences and exhibitions (MICE) and group segments are expected to return comparably slower, with the gradual lifting of travel restrictions and high adoption of technology as an effective platform for MICE activities. Wider consumer and businesses confidence would slowly recover, amongst others.

Related content: Colliers' Hotel Insights Q3 2020

The future of travel: Travel trends shaping the industry

Travel, as we know it, has undoubtedly changed. Going forward, we see five key trends shaping the travel industry.

#1 Emphasis on health and safety
As markets start to recover, consumers will prioritise health, safety and hygiene when it comes to travel planning and decision making.

#2 Staying closer to home
Travel will be more domestic and short-haul-focused, given the restrictions on international travel and the sense of insecurity associated with flights and airports. Further catalysing this is the tightening of travel budgets as a result of the effects of COVID-19 on the economy and employment.

#3 Less is more
Personal space has become important. Instead of large tour groups, independent travel with maximum freedom will take precedence. Seamless and contactless guest services will potentially be the preferred mode of interaction for travellers.

#4 Travel with a purpose
The inability to travel and the prolonged isolation measures may have prompted people to become more introspective. Instead of mass tourism and cookie-cutter travel experiences, people will likely prefer bespoke holidays, seeking out purposeful travel experiences such as health and wellness and eco travel.

#5 Digitising is vital
Technology will take on a more critical role in the traveller ecosystem and will be a key tool in the revival of travel. Robots, chatbots, automation, recognition technology, artificial intelligence (AI), internet of things (IoT) and virtual reality (VR) technology will become increasingly commonplace.

What can hoteliers do to prepare for the re-opening of hotels?

Consumer confidence is key to economic recovery and the revival of travel. A cross-disciplinary approach towards hotel re-openings is therefore vital, so that hotels are well-positioned to build public trust and offer compelling product and service offerings. This would enable them to thrive in the new operating environment which will see an evolving customer mix and preferences.

Editor's note: This blog post was originally published in August 2020 and has been updated for relevance.

You may also like: 

• A 10-point Guide for Hotels Re-opening After COVID-19
• Your Winning Move: Singapore Hotels
• 3 Burning Real Estate Questions Answered: Hotels & Leisure

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