Here & There 03.13.20
The viral edition. Downstream effects of coronavirus on the travel/outdoor industry.
|Mar 13, 2020|
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Well, that escalated quickly
With the coronavirus rapidly spreading, I wanted to spend a minute talking about the downstream effects we’re likely to see in the travel + outdoor industry. Hopefully we’re able to get things under control and the virus dies off as the summer arrives, but even so, the next couple of weeks/months are likely to have significant long-term effects.
Tourism-based economies will be hit hard
Tourism-based small towns like Moab, ski towns, and cities near major national parks are likely to struggle this spring/summer. In particular, local businesses in or near places like Yosemite and Yellowstone (that see a significant amount of foreign travelers) will have a rough season. Destinations with large visitor economies like Hawaii could be in serious trouble. Some these towns like Moab (which has been “suffering” from an over-abundance of visitors) may see a sharp correction and decrease in business. We’re about to find out how much these towns really hate “instagram tourists”.
The major ski resorts — many of which I think are likely to close in the coming days — will be ok (not great, but ok). You may not like IKON/Vail but being part of a big conglomerate and selling a bajillion season passes means that they have a slight hedge against major events like this. They’ll lose a lot of money, but we’re in the latter part of the season already. Smaller resorts may not be as lucky. It’ll be interesting to see how this effects next season’s pass sales.
The backcountry could get crowded
If the above happens, expect more people than usual to be hitting the backcountry for the first time/more often.
Seasonal and tourism-related jobs will be in a really bad spot
I’m talking about anyone who was expecting to work at a ski resort until June, and anyone involved tourism-related activities. The effects on local businesses like coffee shops/restaurants etc are more visible to us, but towns like Buena Vista have over 40 rafting companies. That’s a lot of seasonal people employed, and if trends continue, tourists may be staying closer to home during prime rafting season. Tourism hotspots like Alaska, Banff, Hawaii, Bali, SE Asia, Costa Rica, etc are all likely to be seriously affected.
The situation applies to all local guides and outfitters. These folks typically operate on slim profit margins to begin with, and a bad season could spell disaster. The World Travel & Tourism Council estimates that 50 million tourism jobs could be at risk globally.
Destinations will need to re-evaluate marketing campaigns
Destination marketing organizations (or DMOs, for short) spend millions of dollars each year trying to entice you to visit their area. While some people will continue to travel, I think that most destinations will choose to hit pause on a lot of campaigns until it seems we’re on the downswing of virus-related issues (and the stock market has stabilized).
DMOs are typically funded by hotel taxes, so budgets will be hit hard due to decreased visitors and the cancellation of major events. I expect to see strong marketing pushes this summer or whenever the panic dies down as destinations try to make up for lost visitor revenue.
This will affect the influencer/creator industry
As travel is restricted, DMO money dries up, and many big travel brands lose millions of dollars in market cap, the jobs will vanish as well. Some of the more successful and business-savvy folks will be fine, but many of your favorite photographers and writers are probably going to be hurting as companies tighten marketing budgets, trips get cancelled, and speaking engagements dry up. For all the glamour on Instagram, many freelance creators live pretty month-to-month, and if this goes on for a few months it could essentially “wipe out” a significant portion of creators.
Alternatively, there’s a chance that the crisis actually drives more companies to influencers to save on costs of bigger production shoots. I think that scenario will mainly apply to non-travel related businesses, but we shall see.
I wouldn’t be surprised to see significant consolidation and bankruptcies in the travel industry
Not everyone is going to come out the other side on this. In particular, I think smaller, more boutique travel companies will be vulnerable to either going out of business or getting swallowed up by larger incumbents. There has been a lot of growth in small group travel and boutique lodging over the last few years, and a strong economy has been able to sustain a wide range of these businesses. While everyone will be hurting, and layoffs across the board are likely, I think the Trip Advisors/GAdventures/Airbnbs/Accor’s of the world are far better positioned to ride this out.
Regardless of who survives, this crisis is likely to reshape the travel and hospitality industries in a significant way. Whether smaller companies will simply disappear or get swallowed up at bargain prices is yet to be seen.
As someone who already works remote, in tech, I’m in a pretty good spot to ride out this instability. However, I’ve been struggling to think of how I, or the Outbound could help address some of the issues above. If you have any good ideas, I’m all ears.
I don’t want to see any more “I’m a millennial and flights are cheap so I’m going to keep traveling” posts. If you want to keep traveling, that’s a personal decision. Good for you. I’m tired of the smug/flippant posts about it.
Everest is shut down for the season, which could impact the livelihoods of local Sherpa quite significantly.
File this one under “coronavirus headlines I never expected to see”. The sudden lack of tourists in Thailand (who feed the monkeys) has kicked off a monkey “gang war”.
That’s all for now! Hope y’all stay healthy.
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