Why all forecasts and scenarios about the travel industry are wrong
During this last month the creation of future scenarios has changed from yearly reports to a continuous flow of creative stories about a new and different post-apocalyptic world of travel. Some recognized experts share the same predictions, while others have completely different opinions.
Where do they get their information from? We don’t have any confirmed data yet. We don’t know what will happen in the next year, month or even week. In fact, we don’t even know what is happening in the world right now. We can’t start finding patterns before the restrictions loosens up. This can take weeks, months or years. All we have right now is based on history and personal opinions. That’s it.
The problem is not us trying to predict the future. Predictions are good. The problem occurs when decisions are based on guess-based predictions. When navigating a ship in unknown waters we need someone to steer it with a steady hand. But right now the water is as unknown for the captain as it is for the rest of us. If I were to navigate with stars, I would prefer the advice of an astronomer, not an astrologer. But right now, the dividing line between the two is a bit imprecise.
Wrong input = wrong output.
Many predictions are based on surveys and interviews with operators and agents. What numbers do they work with? Recent years? Cancellations? Gut feelings? Others will ask travelers when they will travel again and where. How can they know? Maybe they’ll ask a friend or search the internet? There are so many factors influencing their answers, but in the end every answer is just guessing at this point.
Only actual behavior and real travels can give exact answers. Meanwhile we can study historical data and trends. In a stable world this kind of data is golden. Right now, we don’t even know what a stable world is gonna look like.
We will not get excact answers before people start travel again. The borders and transportation needs to be open. They will need to feel safe. People are mostly afraid of losing money, so they have to be sure bookings won’t get cancelled. That is, of course, if they have money left to spend. When these and other factors are in place, they will travel to the most attractive places based on all emotional and practical experience the have up until the moment they book.
On Google trends you can see that searches for Spain January 2021 have increased by 2000%. This is promising for Spain. Sun and a pleasant climate never goes out of style. Especially for people from the Nordic countries.
Every prediction has a mission
As a student I learned about the media-created reality. Most forecasts are made of numbers and assumptions that fit in the reality of the ones that make them. They’re colored by their beliefs and the context in which the creator live in. You need to understand the writers point of departure. What is their agenda? Are their opinions presented as facts?
A tour operator might want to calm the moods, spread hope and limit the damages. Maybe they also want to influence the governments to send more rescue funds? Travel experts depend on their reputation and will not publish their analysis before they have given it careful considerations. But still, with a few exceptions like rising business travels in China, not even experts have any real data to back up. Their magic numbers from surveys and interviews aren’t right either. We have never experienced a massive lock down like this, and we have never been in 2020 before either.
And remember that numbers can be used in many ways. A popular new term in recent years is fake news, and we don’t have to search further than state leaders to get unlimited access to this term. Donald Trump, Vladimir Putin and Jair Bolsonaro are all masters of the art.
One size fits all?
What is relevant for some, is not necessarily relevant for others. Forecasts from American consultancies are made in the USA, a big country with a lot of people. They also have a big share of inland travelers and can live off of that without being dependent on international travelers. We can’t for example compare Norway and the USA. Not to mention UAE or Singapore. Does anybody really think that these countries will be traveling inland? To a hotel on the other side of town? There are numerous reasons why these guys will travel internationally as soon as they can.
The effect will be very different depending on which segment you are focusing on. Every country have different restrictions and compensations and support. Every product will be rammed differently. A kayak course instructor can more easily focus on local travelers than someone offering guided tours.
When the expert glass bowl tells you to forget the coming period or the next few years, this is not necessarily true. The experts know just as little as you, so don’t throw away everything you got based on them. It might be worse, and it might be better. If you are prepared for the worst, you are more likely to get a positive surprise.
Before hiking locally, I check the weather through my window, for longer trips I check the weather forecast, and if I am traveling abroad, I check several resources. The answer is often somewhere in the middle.
The butterfly effect
We’ve been through crisis before, but we have never experienced a similar shut down of society. Not everything is unprecedented, but it’s still a complete chaos. There are tools to handle such situations. Chaos theories describes the butterfly effect. How small events can cause enormous and unpredictable consequences. A butterfly’s wings can potentially end up as a hurricane weeks later. Maybe we won’t see the the real effects of Covid-19 until 10–15 years from now, maybe even longer.
The corona virus so far appears more like an earthquake than a butterfly’s wing, and we might experience several after shocks. Close down and recession is a potential aftershock that can strike with unpredictable force and power.
Seeking safety and stability is part of human nature. We need a way out. We need leaders to give predictions and measures, because it helps us see an end to this. So, we embrace everything that comes our way. We go in flock. Every flock is not necessarily heading in the same direction, but we need to unite about something.
There’s nothing wrong about standing together. It is actually important. But it is also important to have your senses open and not jump on the first raft heading your way.
Can’t just everybody travel locally?
One example on how the travel industry is moving in flock is the massive focus on local market. Local is great and sustainable, but more difficult than people think. Those who succeed in the local market have spent years on understanding the clients. We’re talking about changing years of adjustments to segments and foreign markets. Now everyone is jumping on that train, and the competition gets bigger than the market. And, a lot of the local travel market is related to events.
It’s not enough to change the marketing and hope new clients will come to experience the same product. You’ll probably need to change product, marketing and distribution. What will happen when foreigners start knocking on the door again? For many of you the local market might not be an alternative. Some experiences just don’t fit in the local market. You will need to make changes.
In Norway for instance, norwegian travelers are already the biggest market, with neighbour Sweden as a runner up. While there’s a potential for growth, it’s naturally limited by e.g. population. Can the local travel industry survive on local and virtual experiences? It’s hard to gain shares from the herds of sun hungry Norwegians traveling to Spain and Greece each year. Norway is not very competitive when it comes to sunny vacations.
With some adjustments it might be possible to fill the hotels in a local market. But without events, festivals and happenings, it can be difficult. We also see that many are now dumping prices to get revenue. This is a dangerous development in a low-margin sector, and it will be interesting to watch the strategies to rise again. I GUESS that hotel prices will remain low and I THINK that the margins can be regained from better products and experiences around the accommodation. This will strengthen some trends we saw before Covid-19.
What can we do?
No one learns to sail without wind. Use this storm to gain knowledge and raise your skills. Be curious and open minded. Learn to communicate, streamline your processes and make your organization more flexible. This will make you future-ready even without knowing what it will bring. There are many great books and free online courses available.
Don’t waste your time waiting for governments or others to throw you a lifeline. Only you can change your situation. Lifelines are just emergency rescue, in the long run you have to learn to swim.
Like many others I too have thoughts on the future. It is mostly based on hope. What do I want, what do I fear? No matter what you want, the actions and moves you make will influence the situation. I have previously written an article stating that this is a once-in-a-lifetime opportunity to define what kind of travel industry we want in the future, and I stand by that. 100%.
What we do now will influence everything that happens later.
The future article of my dreams
The focus should be on how we imagine the world post crisis. Is it possible for us in the travel industry to create our own future? Can we make the world a better place? I am one of the many that work for and dream of a more sustainable travel industry. I also like writing. 10 years from now I will write an article about the effects of the corona crisis.
I hope the article will say that even though many had a hard time, the crisis opened the doors to new and exciting concepts. The new OTA’s were cooperating with their partners and local communities and contributed widely to local income.
In fact the whole industry got a well-deserved kick-in-the-butt in the right direction. Everyone could see the impact a breather had for the planet, and got inspired by the clean air and harmony with the nature. People became more happy when the pace slowed down. And we learned that we could work and live differently.
Local operators and providers spent their time gaining knowledge and becoming more professional. And better equipped for future crisis. Through technology they managed to communicate local stories in a better way. This contributed to more local wealth creation from each tourist.
Corona will forever be remembered for solving the issues of overtourism, emissions and exploitation of local communities. It seems we needed an invisible helper when we weren’t able to solve our own problems. Finally we let fragile environments be in peace and mediated from a safe distance, with digital tools.
We learned that when the world is heading in the wrong direction, it is actually possible to change it. Both locally and globally. 2020 was the year we hit the reset button and started building the future of travel, on the planet we wanted to pass on to our children.
The butterfly effect is just as much about how we choose to act, because now we have the possibility to define our future and make positive ripples for the ones coming after us.