What now for hard hit tourism sector?

THE tourism industry in Namibia and the globe in general is one of the hardest-hit by the outbreak of COVID-19 as lockdowns have all but ground the sector to a halt.

The sector is experiencing a rapid and sharp drop in demand and a surge in job losses at global level, putting many SMEs at risk. Despite tourism’s proven resilience in responses to other crisis, the depth and breadth of the current pandemic will likely have a longer lasting effect on international tourism compared to other industries, more likely to recover once major restrictions will be lifted. This is also due to the potential long-term changes in behaviours with people likely to become more cautious about travelling overseas in the future.

The shock of such magnitude is difficult to manage for small economies such as Namibia without the alternative sources of foreign exchange revenues necessary to service external debt and pay for imports. Strong shocks will also affect Sub-Saharan Africa where one out of twenty workers belongs to the tourism sector. A recent study from the African Union estimates that the tourism and travel sector in Africa could lose at least $50 billion due to the pandemic outbreak and at least 2 million direct and indirect jobs.

Other specific features make tourism as particularly sensitive to economic shocks.
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Concentration of SMEs in tourism industries is much higher than other industries: SMEs are likely to have less resilience and flexibility to cope with the costs and burdens that these shocks entails.

In addition, given their often-limited resources and existing obstacles to access capital and to adopt technological innovations, the period over which SMEs can survive a shock will likely be shorter than for bigger firms. Another element is the high seasonality and instability of the jobs: the likelihood of occupying a temporary job is significantly higher in tourism than in the total non-financial business economy which is translated in lower social security schemes and benefits for workers. Finally, the high interdependence, yet variegation of tourism services implies that a crisis in one area brings disastrous follow-on effects on the whole tourism value chain.

Indeed therefore for the Namibian hospitality industry, there is still a long road ahead. Hospitality and tourism companies must prepare for ‘a new normal’ that has already engulfed the sector.

That said, some strategies to cope remain available to our tourism sector. Strategies to cope with crises include preparedness, rapid development and deployment of a response network. It also includes managing mainstream and social media, and introducing measures to promote swift recovery.

These measures provide assurance for early detection and management of the disease, including provision of protective equipment. They should be put in place and properly communicated through well-coordinated and targeted marketing advertisements and campaigns.

This kind of persuasive advertisement was credited with helping to revamp travel to the US some four weeks after the tragic 9/11 events. This is because strategies focus on immediate recovery to get people to resume visiting even if only in small numbers.

This kind of post-crisis marketing should also consider clearing misconceptions about the scale of the pandemic in Africa. This should include the number of infected persons and how these numbers compare to other destinations outside the continent. This will help restore confidence and even project African countries as potential alternative holiday destinations.

In disseminating such messages, both the traditional and non-traditional media could be used including social media, YouTube and other digital platforms. This should be done to complement the usual channels employed in the promotion and marketing of African destinations.

Further, African destinations should provide financial inducements to tourism and related businesses to stay afloat. These should for example include tax incentives and waivers, insurance, bailouts and special businesses support schemes.
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Importantly , African countries should focus on increasing their promotion of domestic and intra-African tourism and travel. This will serve as a catalyst for triggering recovery and stimulating growth in the industry.

This has not always been the case, with most destination management and marketing organisations in Africa preferring marketing campaigns targeted at international visitors out of Africa whilst neglecting the purchasing power and potential contributions of the growing African middle-higher income classes to the industry.