by: M. Puklavec, Slovenian Tourist Board
This World Tourism Day we take a look back at the discussions on the tourism panel at the 17th Bled Strategic Forum. With the title ‘Instability as the only constant’ panel addressed the challenges and presented key measures for successfully confronting the tourism industry with the current challenges of European tourism.
After the opening speeches of the Minister of Economic Development and Technology, Matjaž Han, and the director of the Slovenian Tourist Board, Ms Maja Pak, the speakers presented their views on the most current challenges of tourism in light of the potentially permanent impact of economic volatility, geopolitical unrest and rising living costs, as well as consumers’ strong desire for environmentally friendly choices. Zorica Urošević, Executive Director of the World Tourism Organization (UNWTO), talked about the challenges that await tourism in the future, while Luís Araújo, President of Portugal Tourism and the European Travel Commission (ETC) drew attention to the fact that tourism is defined by the same values that apply in the European Union: human dignity, freedom, democracy, equality, the rule of law, human rights. The participants of the round table – Matevž Frangež, Violeta Bulc, Terry Dale, Eric Drésin and Alessandra Priante – agreed that it is time for new tourism: even more inclusive, resilient, creative, innovative and focused on contributing to cities, countries, and the planet. Responsible for giving back to local communities and caring for employees. Tourism as an industry must be among the forces that create and realize a sustainable future. Business models based on collaboration rather than competition are needed.
The post-pandemic period for tourism began with a resumption of activity, travel and optimism. According to the UNWTO, nearly 250 million international arrivals were recorded from January to May this year, accounting for almost half of all international arrivals recorded during the same period in 2019. According to UNWTO forecasts, international tourist arrivals will reach 55 to 70 per cent of the level of 2019. The UNWTO is conditioning its forecast on several factors, including the development of the war in Ukraine, possible new outbreaks of the coronavirus and global economic conditions, especially inflation and energy prices. At the same time, people’s desire to travel is accelerating. According to the ETC data, as many as three quarters plan to travel by November, a third of them even twice. Otherwise, the good forecasts regarding the trips of European residents are affected by their concern about flexibility in trips, especially the possibility of cancellation and refunds in the event of trip cancellations. They travel closer to home and prefer safe destinations.
Due to the combination of many changes, tourism is facing one of the biggest turning points in history. This is why this year’s tourism panel highlighted instability as the only constant.
The future of tourism as a sector that quickly responds to changes was highlighted by Minister of Economic Development and Technology Matjaž Han in his opening address: “Tourism is of exceptional economic importance for Slovenia, as it contributes as much as 10 per cent to the gross domestic product. Just like elsewhere in the world, the tourism sector in Slovenia is still recovering from the covid pandemic. I can say with satisfaction that the data for the first half of the year shows that Slovenian tourism sector is recovering faster than we expected. By the end of the year, we expect more than 13 million overnight stays, which is as much as 20 per cent more than last year but still 16 per cent less than in 2019. Unfortunately, both international and Slovenian tourism are facing new challenges: the renewed spread of the coronavirus, war and geopolitical unrest, the climate and energy crisis and, as a result, the high cost of living. Similar to the time of the pandemic, we must find the answer to these common challenges together by connecting with other countries, the European Commission and the international community. In Slovenia, we have clearly defined goals of future development in the 2022-2028 Strategy for the Sustainable Development of Slovenian Tourism. We follow the development of green, sustainable of tourism with a low carbon footprint, where we create added value for all stakeholders: guests, tourism companies, employees and the local environment.”
MSc. Maja Pak, director of the STB, highlighted the key challenges of European tourism in the light of the series of changes that introduce uncertainty in the European tourism industry: “Tourism is among the economic sectors that are most intensively affected by economic, political, security and other changes. Rising prices, disruptions in supply chains, reduction in the purchasing power of households, the uncertainty brought about by the war in Ukraine, and the lack of personnel means instability, which is also becoming a new reality in tourism. The interplay of many factors has a strong impact on the operations of tourism companies and presents them with many challenges. The question arises about how tourism can respond successfully and what European tourism should be to cope with the most pressing changes. We will look for answers in the thoughtful design of even more sustainable, inclusive, resilient and responsible tourism for all: tourists, residents and employees.”
The opening speeches were followed by presentations by distinguished representatives of UNWTO and ETC.
Zorica Urošević, UNWTO Executive Director, highlighted changes in the purchasing demand and behaviour of tourists: “In two years, tourism lost almost US$ 4 trillion in direct GDP. By May this year, international tourism had recovered 46% of its pre-pandemic levels and summer bookings shows demand has been resilient to increased prices and growing economic concerns. Yet, headwinds challenge recovery. The Russian invasion of Ukraine created a systemic crisis. High inflation and rising interest rates are squeezing household purchasing power and putting extra pressure on companies, including the challenge on energy dependency. Though travellers’ sentiment remains healthy, research shows growing concerns around travel disruption and economic uncertainty, which may fuel a »wait and see attitude«, reinforcing late bookings and the postponement of travel decisions. As we emerge from COVID-19, the “polycrisis” call for the need to create new governance in tourism and accelerate our transition towards a more inclusive and sustainable model.”
Luís Araújo, President of Portugal Tourism and the European Travel Commission (ETC), commented: “After two difficult years and facing challenges we never thought possible in the current days, now is the time to face the future. The time to recognize things have to change and we have to create a new Tourism. More sustainable, more resilient, more focused on its contribution to our cities, our countries, our planet. More responsible in giving back to our communities and selective in what we want for our lives. More determined in being the industry of peace. Europe, as the biggest destination in the world, has the responsibility to lead this path but we all have to recognize nothing will be the same again. Only then we will be able to say: The Old Tourism is dead… Long live the New Tourism!”
The presentations were followed by a panel discussion with prominent Slovenian and foreign speakers. Matevž Frangež, State Secretary at the Ministry of Economic Development and Technology, Terry Dale, President and CEO at United States Tour Operators Association (USTOA), Eric Drésin, Secretary General of The European Travel Agents’ and Tour Operators’ Associations (ECTAA), Violeta Bulc, entrepreneur and consultant for business development strategies, local government and regional development agencies, and a former European Commissioner for Transport, and Alessandra Priante, Director of the Regional Department for Europe at UNWTO, spoke about the current challenges and opportunities of European tourism.
Matevž Frangež, State Secretary at the Ministry of Economic Development and Technology, highlighted the state’s help to the tourism industry during the pandemic and the importance of investing in activities for 365 days of tourism: “In this decade, we must learn to live with uncertainties. It is essential that we build flexible models that will provide some stability in future crises. That is why we need to improve our attitude towards society and the environment, invest in people and infrastructure, and build a more resilient model for the future.”
Violeta Bulc, entrepreneur and consultant for business development strategies, local government and regional development agencies, and a former European Commissioner for Transport, highlighted the importance of connecting different stakeholders: “Tourism is a business sector which reflects and depends on the state of mind of society. That includes its social, political and economic conditions and an individual’s relationships with life. A great proof of such sensitivity are people’s reactions and behaviour patterns influenced by various continental or global crises such as terrorism, migrations, climate change, pandemia, wars and various forms of mass psychosis. Therefore, it is essential that tourism embraces strong resilience strategies based on quality relationships with the targeted segments of customers, as well as close collaboration and co-creation of all stakeholders. But above all, for the future of tourism, peace and mass prosperity are the key ingredients for sustainable success.”
Terry Dale, President and CEO at the United States Tour Operators Association (USTOA), said the pandemic has shown the importance of travelling in people’s lives: “Europe is the ‘bread and butter’ for American guests; this will not change in their travel habits, the majority of our members will still visit Europe,” and continued by emphasizing: “Tourism is struggling to match the results of 2019. However, now is the time to consider its impact on the community, the environment. In this context, it is not only important to recover it, but also to rethink it. All stakeholders must come together and create a vision for a sustainable future of travel. Let’s stand for ‘high value, not high volume’. We have a great responsibility towards local communities and the environment, we need more responsible approaches.”
Eric Drésin, Secretary General of The European Travel Agents’ and Tour Operators’ Associations (ECTAA), emphasized that it is impossible to foresee all upcoming challenges: “Anticipating all the coming challenges is impossible but remains essential. The tourism sector will be affected by the energy crisis by an increase in both the costs and prices of the services they sell and a reduction of purchasing power of the customers. To overcome the expected difficulties, keeping profitability as a driver of business management is essential and flexibility, adaption will be again required. In this context, developing an offer with more sustainable services and products is an opportunity to meet a long-term trend demand and give additional resilience to travel companies.” He went on to emphasize the importance of digital transformation: “Digital (r)evolution is permanent and concerns all the economic sectors. Tourism is not an exception. Actually, tourism and travel has been one of the first sectors concerned by digitisation with a massive shift of the sale of air tickets from brick-and-mortar retail to online. The current development of new tech tools (Artificial Intelligence, Virtual Reality, Metaverse…) or behaviours (digital nomadism…) means that selling tourism will be different in a near future, in particular when related to cultural heritage. Travel advisors and destinations are already exploring and investing in these new disruptive technologies to be able to set the coming standards of communication and marketing.”
Alessandra Priante, Director of the Regional Department for Europe at UNWTO, highlighted in the discussion: “While the recent years have brought drastic changes in the tourism sector, one aspect has remained pivotal throughout the recovery and will be the basis for the future development. It is sustainability. Sustainability is not only about making optimal use of environmental resources but also respecting the socio-cultural authenticity of host communities as well as ensuring viable, long-term operations and providing socio-economic benefits to all stakeholders. This requires informed decision-making of all relevant stakeholders, as well as strong political leadership to ensure wide participation and consensus building. Youth involvement in decision-making processes at the highest level, quality training and education, innovation and investments are some of the main priorities for the World Tourism Organization as we move forward to build a stronger and more resilient tourism sector.”
Key measures for successfully confronting the tourism industry with the current challenges of European tourism
The participants of the tourism panel emphasized that the key to successfully dealing with instability as the only constant is:
1. Coordinated action and cooperation at the European level. As the largest tourist destination, Europe has a responsibility toward world tourism to be the leader or, in the words of ETC president Luis Araújo, “to lead the way” in the direction of the development and implementation of sustainable tourism.
2. We will have to be more daring, innovative, and inclusive in defining our role, mission and new business models.
3. We will have to strengthen efforts for a green and digital transition, as stated in the European Commission’s Transitional pathway guidance document. This identifies 27 areas of action for the green and digital transition and for improving the resilience of tourism in the EU. Among other things, it proposes more circular and environmentally friendly services in tourism, improving the exchange of data for more innovative services and improving the accessibility of services.
4. Promoting sustainable mobility and strengthening low-carbon transport links will be key. The transformation of tourism is fatally linked to the development of transport infrastructure, so the industry must intensively connect horizontally with key stakeholders in this area.
5. Urgent emphasis will have to be given to human resource management – to find new innovative ways to attract people back to the tourism industry and keep them there.
6. Use of new technologies that will meaningfully relieve tourism employees and provide guests with a better experience before, during and after the trip.
7. With appropriate communication and initiatives, it will be necessary to address tourists to behave more sustainably; it will be necessary to reduce the gap between orientation towards sustainability and behaviour at destinations.
8. We must define a balanced set of performance indicators and find the right relationship between profit, people and the planet (profit, planet, people).
The recording of the tourist panel is available here.