The Corona pandemic has posed major challenges on the tourism industry worldwide. Therefore, Dr. Fried & Partner and the Travel Industry Club asked at the end of 2020 how things will go in the medium term and carried out a corresponding scenario analysis. Result: A “metamorphosis” of the industry was seen as the most likely scenario. Almost six months later, Dr. Fried & Partner has now carried out a study on the status quo of the industry development to determine how the travel industry has dealt with this period of standstill and whether it has made use of it.
In this blog series we look at the different areas that the study focuses on and provide insights into results and conclusions.
The survey accompanying the study, which was carried out in cooperation with the Travel Industry Club and in which over 300 industry experts participated, took place from 19 April to 5 May 2021. Over 50 percent of the participants are managing directors or owners. In addition, the sample consists mainly of the segments of tour operators, travel sales, accommodation, IT and data companies as well as consultants.
This article deals with the question of how extensively companies have made changes regarding product design and further product development since Corona. With a scale from 1 (very extensive changes) to 5 (no changes at all), we asked how extensively product offers have been individualised and the range expanded, whether product innovations have been introduced and how extensively production has been made more flexible.
In the area of product design, primarily corona-related product innovations were implemented (rating: 2.54). According to Dr. Fried & Partner, the focus in this context lies particularly on the development of options for contactless travel and the introduction of new (virtual) services as well as increased personal support. Hybrid and virtual offers have established themselves in the event sector and the partial elimination of rebooking fees in the flight sector can also be seen as a product innovation, especially in the area of package tours. In the hotel environment, unconventional use of their traditional offer was made available, such as school or home office in hotels, or the time was used for renovations to revise the offer. In addition, for example, new F&B concepts in the form of pop-ups were developed.
In connection with this, the product ranges of the providers were also expanded in some cases (rating: 2.66) and partly supplemented by other stages of the value chain. Here we particularly see the adaptation of the offers to new framework conditions and the needs of travellers (e.g., free middle seat, COVID insurance etc.). In addition, the product mix has been adjusted at many companies and additional service offers such as earthbound trips or trips to nature, holiday homes, regional offers or day trips have been added, and destinations with low incidences have been focused on.
In some cases, however, product ranges were deliberately reduced to specialise more (for example, on luxury offers) or to part with service providers.
Regarding the flexibility of service provision (rating: 2.86) and the individualisation of the product range (rating: 2.93), the experts attest mediocre progress. According to Dr. Fried & Partner, especially the area of service provision was made more flexible, in order to be able to react to peaks in demand on short notice and to meet the constantly changing requirements. For example, more flexible contracts are being negotiated with service providers or, in some cases, completely cloud-based tour operator solutions are being pushed forward.
With regard to the individualisation of offers, we see above all the expansion of self-organised arrivals, a stronger focus on modular products, as well as more flexibility in travel dates and cancellation conditions.
The Travel Industry Club is opinion, network, and future. This is where the makers and movers of the travel industry meet, and together the future of tourism is thought out independently. This is where complex future topics are discussed, and ideas are developed – and all of this with a view of the bigger picture. In addition, the Travel Industry Club puts the economic importance of the travel industry in the spotlight of the public, media and politics and brings young talents together with the leading players of the industry through the initiative “Young TIC”.