The onset of the COVID-19 pandemic not only brought about new challenges to leaders in every corner of the travel industry, but it also exposed existing cracks in business models that need addressed.
At the destination level, leaders are facing increased pressure to respond to industry disruption and understand which market disruptions are the most dangerous and how they respond to those disruptions and implement necessary changes.
According to new research from travel and tourism advertising agency BVK, which surveyed 240 destination organization executives from around the globe, 95% of destination leaders say they recognize the need to transform in response to disruptive industry trends.
Some 85% say they recognize the need to change or evolve existing funding models, while 82% say they need to change or evolve their core offerings. About 69% of executives say they need to evolve or change their destination’s mission or purpose.
In addition to recognizing the need for change, 74.3% of destination leaders say they are confident in their ability to respond to disruptive trends. Of those surveyed, 55% believe they are able to institute changes induced by new market trends faster than the rest of the industry.
About 21.2% of respondents say they are able to institute changes much faster, 31.5% say they are able to at about the same pace and 13.6% say they are able to institute changes somewhat slower than the rest of the industry.
The majority of destination leaders - 61% - say they will respond to significant industry disruption by transforming their core offerings as well as by investing in new offerings.
Just 18% say they will transform their core offerings to increase resilience, and 12% will invest in new offerings to attract new audiences.
Obstacles, growth and competition
However, the biggest obstacle to an organization’s ability to transform its offerings or services in response to disruptive change is the battle for resources, according to 76% of destination leaders.
Additional obstacles include buy-in/willingness to collaborate from public and private sectors (63%), lack of infrastructure (62%), buy-in from international stakeholders (47%) and lack of compelling ideas of growth opportunities (46%). Thirty-seven percent of executives say they simply don’t want to take the risk.
When it comes to growing top-line revenue over the next two to five years, 75% of destination executives plan to expand their impact within existing markets to drive tourism-related expenditures.
Some 64% say the intend to identify higher-value visitors who spend more money to drive incremental tourism-related expenditures and 63% say they plan to enter new markets, while 49% expect to seek other sources of income.
For new concepts, products and ideas, 62% of destination leaders say they “sometimes” receive less attention than they should because key constituents tend to favor the way things have always been done. Twenty-five percent say this is a common occurrence.
In the next year, 69% of destination executives expect to see increased competition from within their own industry, while 61% anticipate increased competition from adjacent industries. Fifty-two percent of leaders say they expect more competition from entirely new industries, and 35% predict competition will come from other organizations within their own community.
Looking ahead over the next five years, destination leaders expect to see more competition in services including product/experience development (74%), tourism marketing (71%), pre-trip/out-of-market visitor information (66%), destination branding (66%) and economic development (62%).
