Tourism: How Digital Transformation Can Save an Industry
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Tourism: How Digital Transformation Can Save an Industry

It is crystal clear that uncoordinated national measures over the last six months to limit transmission of COVID-19 have had a devastating impact on the travel and tourism sector. It's not just airlines that have had their legs swept out from underneath them either.

Nov 4 2020

McKinsey & Company's research suggests that the recovery to pre-COVID business levels could take until 2023 – or later. 10% of global GDP is from tourism and that has been decimated this year. The numbers are simply staggering, and the sector has never experienced anything like this shutdown.

The impact is particularly profound as it is being felt by all stakeholders: lenders, investors, owners, operators, employees, and customers are all impacted. And this is global.

Tourism losses and GDP

The UN's trade and development body (UNCTAD) estimates that a 12-month break in international tourism (highly likely to be on the cards) will result in losses of $3.3 trillion, 4.2% of global GDP. It estimates that for every $1 million lost in international tourism revenue, a country's national income could drop by up to $3 million. The effects on employment have already been profound. Developing countries are suffering the steepest GDP losses with Jamaica and Thailand the standouts, losing 11% and 9% of GDP respectively. And that's the most optimistic scenario of UNCTAD's estimates.

The amateur psychologists amongst us will be very familiar with Abraham Maslow's hierarchy of needs. This is a motivational theory which he proposed in 1943 comprising a five-tier model of human needs, often depicted as hierarchical levels within a pyramid. Applied to a corporate context, Maslow's pyramid indicates that a company's approach can shift drastically in times of crisis.

Covid-19 forced an inflection point for every business touched by tourism. Overnight, interfacing digitally with customers and employees, only using physical interactions to augment when absolutely necessary, became our norm.

Travel and hospitality brands have known for a long time that great customer experiences start long before trips begin. They are often at the forefront of digital transformation: for example, Facebook's first international enterprise client for business messaging was the airline KLM in 2015. KLM was already using A2P SMS heavily but rapidly added other digital channels to its communication stack.

Using CPaaS to fight back

Before the events of 2020 snowballed and caught up with us all, today's consumers were already relying more on digital channels and platforms for all their travel needs, from research to post-trip review. The tourism industry had to transform itself rapidly to meet the needs of consumers who tend to research even the smallest of things.

CPaaS and omnichannel communication solutions have been grasped with both hands by the industry in recent months and the race to adopt far more than just a multi-channel approach is well underway.

A2P SMS has seen even more reliance placed on it with an ever-expanding range of use cases turning to it to cover client communication in the most ubiquitous and engaging ways possible. Chat apps such as WhatsApp Business have seen increasing demand as well. These trends will continue well into 2021 at least given all the setbacks layered upon the tourism business.

With Mitto's CPaaS and easily implemented omnichannel solution suite in their corner, any business can rely on an array of channels to converse with their clients in a natural and personalized way. Now more than perhaps at any other time in its history, tourism needs to transform itself into a real-time, end-to-end customer experience powerhouse. Failure to do so is not an option.

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