COVID-19 as a trigger for more responsible tourism business models
Updated: Jan 5, 2021
Co-authored with Minni Haanpää, Maria Hakkarainen, and Saila Saraniemi
This post was originally publsihed on 16th July 2020 at the Business & Society Blog.
By bringing the movement of people to a standstill, the coronavirus crisis has challenged the basic premises of the global tourism industry, bringing one of the biggest service industries to its knees. COVID-19 has led to the cancellation of events, closing of restaurants, hotels and many other tourism service providers around the world. International travel has become almost impossible with the closure of borders, airlines suspending flights, airports closing, the introduction of quarantine periods and further restrictions introduced by different countries. Although the removal of travel restrictions has begun, there is still uncertainty due to concerns about a second wave of coronavirus pandemic, which could lead to their reintroduction. Considering the coronavirus crisis-initiated disruption in selling and distribution channels and the imminent bankruptcy of tour operators, travel intermediaries, airlines and cruisers among others, there is a need for new business models to emerge. Indeed, as a service industry highly reliable on global mobility, the tourism industry is confronted with the essential question: how to assure the continuity of business operation in times of international travel disruptions?
Answering this question means reinventing the tourism industry by working towards new business models that can help tourism companies to operate in an uncertain and volatile environment. While totally new tourism business models may emerge as a consequence of the crisis, we also believe that old business concepts such as staycation, local (domestic) tourism and virtual tourism will play an important role in the future development of tourism. Staycation, which became popular during the financial crisis in 2008, faded away as soon as economies started to recover. COVID-19 has put this business model back in the spotlight. Together with the idea of local tourism, staycation is now seen as an alternative for developing more local tourism markets situated within a particular town, region or country. Indeed, COVID-19 has shown the tourism industry not only the risk involved in being too dependent on international markets, but also the benefits of targeting more local customers as well.
In addition to proximity, technology offers also possibilities for developing new tourism business models. Virtual tourism is another business concept that has been discussed in the industry without really taking off. In general, virtual service environments have been seen as a means for advertising and enhancing customers experiences before, during and after visiting a tourism destination. Advancements in virtual tourism have been limited by the prevailing assumption that people want to travel long distances to exotic destinations and that no one would be willing to pay for virtual travelling. During COVID-19, virtual tourism has been the only option for many tourism and event service providers around the world. During the last months, many of us have been attending music concerts, visiting art galleries and taking part in virtual tours around the world. While some of these virtual services are free, some, such as the online experiences offered by Airbnb, are for sale.
Further developing local and virtual tourism models will not only assure the continuity of the operations of the tourism industry in a global market deeply shaped by the COVID-19 pandemic, but it can also be an opportunity to develop more responsible tourism practices. Local and virtual tourism can be a concrete response to climate change by offering an alternative to air travel. It may also offer an opportunity for those who have been excluded from participating in tourism due to health, age, economic and other reasons. Finally, it offers an opportunity for tourism organizations to renegotiate their social licence to operate in places affected by overtourism and a growing anti-tourist sentiment.