Measuring Risk. A challenge for travel & hospitality consumers and their suppliers

As consumers face the prospects of deciding when to travel, who with and how (by road,rail,sea or air) and worrying whether they could be turned back before departure if a temperature is detected, suppliers are grappling with how best to reassure clients that risk is minimised by dealing with hygiene factors as a key element of their offer. Measuring risk has therefore risen high on personal agendas and will influence behaviour and marketing messages. Our images highlight the conundrum-gingerly cross the ravine and/or stay out of the water?

The Panel for Travel & Hospitality (PATH to Reset) groups recent discussion reviewed various factors that will influence outcomes on the road to a new reset of the sector in the coming months and years. Here we summarise some key insights and food for thought as the story evolves:

 

1. Demand:

Decisions to travel or stay elsewhere will vary according to age, health and sensitivity to risk:

2. Travel:

Currently administrative chaos exists as customers, travel companies, airlines and Online travel agents are in a circular flow of claims and refunds sorting out trips that have been rescheduled or cancelled:

3. Destinations:

4. The Hospitality/Customer Interface:

People are sociable animals and want to interact-this is the appeal of restaurants, bars and hotel lobbies -they are often sexy, buzzy places offering a desirable environment. The risk is that Social distancing could kill off demand by creating sterile environments. ‘Hospitality becomes Functionality’.

5. Operating Businesses:

The immediate challenge is working out how to break even once things loosen up. Cash flow is the dominant issue for existing businesses with some already over leveraged or over rented and a fundamental restructuring was overdue.

6. Design:

Buying hotels is a long term game. A 20- year time horizon drives developments so most investors looking to acquire or develop are unlikely to impose changes on physical structures until things are clearer

7. Investment:

In recent years investors turned to hospitality as an alternative to retail and offices. Now the risk is that they may turn away to logistics, delivery companies and IT driven companies.

Despite all of the above, the future shape of the industry will be exciting driven by a global and ever-growing tourism industry and a fundamental desire for people to meet people and enjoy themselves. We look forward to playing a part in in resolving the current challenges and the innovation that follows it.

We welcome your views and comment. Do contact us on 00447785 514831 or info@arcconsultingpartners.com to discuss any issues arising from these thoughts which we will share with our panel (see below) who we thank again for their active participation and input.#stay positive #pathtoreset #travelandhospitality

Mario Bodini, Richard Bursby, Douglas Grant, Liz Hall, Dexter Moren, James Munro and Gerard Nolan.

 

Photos by Lubo Minar on Unsplash        and   Michael Shannon on Unsplash