If the tourism industry doesn't want a replay of 2019 overtourism, they need to adjust their strategies and tactics.
There was a travel boom this summer in Europe. Famous destinations and attractions were more crowded than ever with tourists. Destinations, tour operators and communities have been trying to adapt to the tourism surge.
VisitBritain CEO Patricia Yates and Intrepid Travel CEO James Thornton talk about strategies and tactics that can be effective for spreading tourism beyond hotspots and to lesser known areas. They also discuss the impact of climate change on tourist choices and expectations for Asia’s outbound tourism recovery.
Yates shared plans to promote regions and locations that were involved in TVs and movies, while Thorton expressed an interest in investing in destinations that were “off the beaten path.”
(See the video and transcript below)
Dawit Habtemariam: So we’re here to talk about themes around destinations in this new era of tourism we’re in right now. So it seems like 2023 is a lot like 2019. Europe was very popular, many destinations and hotspots essentially surpassed their 2019 levels in terms of visitation. Patricia, what was this summer like for Britain in terms of tourism?
Patricia Yates: We’re really focused on growing value rather than numbers. There’s been a lot of talk about visitation. So what I would say the success has been is we’ve seen people coming, spending more, staying longer, exploring more of the country. And that’s really where we’re trying to shift our tourism industry. So we get people out of London, they get those real authentic stories, meet locals, try local food. So it’s not just about point-to-point airlines and leaving people in London.
Habtemariam: There’s been a richer spread going on.
Yates: Yes, and the American market, which I have to say is driving the recovery in Britain, really strong growth and it’s great talking to the tour operators over here who are talking about the new destinations they’re going to, like Wrexham. I wonder why. And they’re taking people there through the winter because, funnily enough, no one thinks Britain has great weather. So the expectation is fairly low, so you can extend the season quite easily. A tip for you.
Habtemariam: Speaking of weather, James, so you mentioned in your presentation about extreme weather, like heat waves and whatnot. So are you seeing that changes traveler booking behaviors? Are travelers changing their plans to avoid extreme temperatures? What are you seeing?
Thornton: I think 2023 was the year that really travel was back in the sense of the whole world being open again. So I live in Australia, we’re a bit slower to get up to the curve, so I think every American, Brit, or Australian was in Europe this summer and just desperate to get there and enjoy the summer. But what increasingly people experienced when they got there was, it was hot, it was expensive, it was crowded.
And what we’re starting to see now at Intrepid, as people head towards 2024, is bookings into those shoulder season windows. People that have the flexibility, that can travel, bookings are up 88% into April and May for Europe next year, September and October busiest months that Intrepid actually operates globally as a company. So I think you’re going to start to see more people move away from those peak periods. I think that the work and leisure element and that hybrid working environment that people have will also help facilitate that too. And people are starting to be more conscious of their footprint, particularly younger generations, and they want to get away from those peak tourist sites and into more of those off the beaten track places.
Habtemariam: It seems like people are getting, I don’t want to say more complex, but they’re just getting more… They’re adapting to the realities of our changing climate.
Thornton: Yeah, I think so. I think people want to work for and buy from companies that are truly sustainable, and they increasingly want to have more experience as much as they possibly can, and the climate crisis is impacting them. When they see that there’s big fires happening in parts of North America or Europe, it is changing their travel plans accordingly.
Habtemariam: You mentioned earlier regarding the extreme weather. So a big theme of this whole forum is adaptation to a changing climate. It seems that it is correct that more travelers are coming to a cooler Britain to avoid hotter temperatures all around.
Yates: The Gulf visitors have always been very loyal. They come to London during the summer to escape the heat. But I think the question for us is what can the National Tourist Board do that helps the industry? And as you were saying, filling those shoulder seasons. Actually the peak season does itself. What difference can we make? We can drive business into those shoulder season, so that gives a longer season, spreads the load, and actually creates year-round jobs, so it becomes a sustainable industry to work in, and an industry that people want to work in. Because for us, the challenge this year isn’t getting people to come. The challenge is how do you make a profit when staff are hard to get, energy costs are up, food costs are up? So looking at some of those supply issues, how can we get people, young people, who want to come and make tourism their business.
Habtemariam: So shifting gears, so a big topic this year is the uneven source market recovery. Some markets are coming back stronger than others. Americans are traveling in full force this year, but Chinese tourism has not recovered to its pre-pandemic levels, and won’t be coming back for quite some time.
Patricia, so my question is, have you been focusing on other markets to replace the loss of Chinese tourism? Are key markets like India becoming a greater focus for you?
Yates: Our strategy at the moment is absolutely to invest where we see growth. So America, Australia, more than 30% growth, and Europe and GCC are the markets we’re going for at the moment. I would just challenge though longer term. Longer term, the growth in tourism comes from Asia. We think once China starts, it’s going to roar back, and you can see that British universities are still really popular with Chinese students and they have continued to come. The airline seats are getting there. We’ve now got approved destination status. So we are talking about a year possibly, but I think those Chinese visitors are going to come, and if you’re looking across the globe as we are, you have to think about how you’re going to harness that growth in Asia where you perhaps don’t have the historical connections you do with America and Australia.
Habtemariam: James, so Intrepid, it’s based in Melbourne, you’re based in Australia. What is the sense of the recovery of not just China, but the whole entire Asia region?
Thornton: Well unfortunately, unlike here in America, Australia went pretty extreme with its pandemic response and we were locked up for over two years. And so travel only actually came back in February of last year. So for Intrepid, our customers come from three core markets: North America; UK, Europe; Australia, New Zealand. America and UK and Europe was flying obviously in 2022, but for 2022 travel, Aussies just didn’t really have the confidence, and there certainly wasn’t the air stock to get out. And if there was, it was incredibly expensive to be able to do so. So 2023 has been the year that Aussies have returned en masse to destinations. I think we saw that through Europe, but key travel market for Australians is into Asia. And right here right now, Asia’s being obviously the slowest region to recover. Flight seats are still 30% down on pre-pandemic levels for Aussies getting out of destination.
We rely on China air capacity too, so 21% of air capacity in and out of Australia is relying on the Chinese airlines. At the moment, Chinese international capacity is 48% of pre-pandemic levels. So we’re really struggling. The price point is very high. What we’re seeing at Intrepid as a result, it’s lots more comfort, premium type passengers, the baby boomers who aren’t as impacted by some of the financial challenges. And that’s where our recovery is coming. But Australia’s rebounding much more strongly now as we head into 2024.
I think the other thing for us is China is an interesting market, but there’s some geopolitical challenges at the moment. Obviously China, America, definitely Australia, China. We are looking to India. We think India’s a very interesting market at Intrepid. It’s the fastest growing middle class in the world. I think the biggest airline orders in the world have come from India at the moment. Air India have just ordered 470 jets, I think Indigo500. So much air capacity against that market, and I think we can provide great experience to those Indian customers. And clearly you guys at Skift do too, given your focus.
Habtemariam: Yeah, a big mega-trend for this year was that it was going to be the new China, for sure. So let’s talk about distributing tourism right now. So antidotes to over tourism, we want get away from ever going back to 2019 ever again. We don’t want to be like that. So my first question for you, Patricia, I know a major focus of Visit Britain is to spread tourism beyond the hotspots like London, where I get people exploring more of the country. You’ve been working at that. What have been the most effective marketing tactics, storytelling, to really get hidden gems in the minds of tourists?
Yates: I think you need a two-pronged approach. The first is, why should I go? So you have to tell the story that engages people and make them want to get there. And then the second thing is, how do I get there? We drive on the wrong side of the road for many places across the world, but actually we’re a small island with good public transport. So I think it’s that two stories, it’s the aspiration, and then it’s the practicalities of how can you do it.
Habtemariam: My next question I have to give to you, James. So when it comes to working with destinations or how you deal with these issues, how do you collaborate with them or think about them when it comes to creating more even spread, discovering new areas?
Thornton: I think anyway, you said we don’t want to go back to 2019 in 2023, and I was thinking about Europe this summer. I was in Rome, Venice, Dubrovnik, sure as heck felt like 2019. It was heaving everywhere you went, and it was, to be honest, not a great experience. So look, the fundamental base of what Intrepid does is, we take people off the beaten track to yes, experience the iconic sites, but to get under the skin of a destination, where’s the next destination? And it’s difficult for a tour operator that goes to over a hundred countries, because I can’t just magic up new countries left, right and center. So what we are looking to, particularly in places like Europe, is where’s the antidote to the packed Croatian coast at the moment? So we think Montenegro is exciting. We think Albania is a very interesting place at the moment where people can have great experiences, get a bit off the beaten track, see a new way of life and get that dispersion of income then away from those peak sites.
Conversely, getting into Sardinia as an antidote to the south of France. When you’re thinking about Asia as a destination, Japan: seems like every last person wants to go to Japan for cherry blossom season coming up. We’re doing quite a lot of promotion and work in South Korea. And again, that’s often led by television shows that might be on and where interest is. We often find demand stack statistics peak even where the Bachelor is being hosted or where White Lotus is being filmed next. So that again plays a bit of a role too, but ultimately you’re trying to get diversity of experience.
Yates: Can I just say, I think film and TV globally is such a huge draw, particularly for Gen Z, and it can transform places that have never been heard of that suddenly… Castle Howard after Bridgerton got a 3000 increase in Gen Z people looking at their website wanting to go there. So it transforms places, that image on the screen. And with media groups like Netflix that is a global audience nowadays.
Habtemariam: That brings me up to my next question actually. So when it comes to your strategy for spreading out tourism, how do you incorporate that fact of people just being so influenced by movies and TVs to spread toward… Is that a big part of your…?
Yates: Well, funny enough, yes, we’re looking at our next campaign, and obviously secretly in this room I’ll say that film and TV, we’re looking at that being a major driver. We’ve used Harry Potter, the Bond experience, so we’ve got good links with studios in the past, but really ramping that up and telling the story of Britain through film and TV, and we still have such a rich bed of stories to come. Wonka is coming out this year with Willy Wonka, the prequel of it that was filmed around Bristol. So we’ve got great destinations that people can come and be part of a film set.
Habtemariam: For James, when it comes to developing tours or adventures, how have you played off these to get people to spread out, when it comes to…?
Thornton: I think the key thing for us is our customers are always looking to get to new, untouched destinations. Which one is the one that’s going to be new and trendy? Many people have traveled to South America and been to Peru and done Machu Picchu, but how can I then get into the Amazon? How can I get from Rio Janeiro down to Buenos Aires? That seventh frontier of Antarctica. So I guess we’re always looking at working with local destinations, and we have 28 destination management companies ourself around the world, to try and encourage that diversity of income, that diversity of spread, because I think people are always looking for where’s that new wow place that’s coming? And particularly with the Gen Z environment and Millennial, they want to get there before anyone else and then show off on social media about it. So I guess we’re trying to tap into both culture, but also then market opportunity, too.
Habtemariam: People always want to be at a famous set.
Thornton: Always, always.
Habtemariam: Like, hey, this was filmed in a certain show.
Thornton: And I think the other thing is people increasingly don’t… When they go to Barcelona, it’s not necessarily Las Ramblas and going to the main market. They want to find the market that the local person is going to, they want to buy food in the local way, even if they can’t speak the language. They then want to go and eat it and make it in a destination where they couldn’t otherwise get access to themselves and be able to tell their friends about it. And that’s really what Intrepid is all about: getting people off that beaten track, having the local experience, and providing that real connection with each other.
Habtemariam: So that brings me to my next question. So this is for both of you. So when it comes to considering the needs of locals and communities, how do you work with them and consider their needs when it comes to getting them ready for tourism, when visitors arrive? Can you go into…?
Yates: I think that’s the next challenge, is how do you balance tourism businesses, visitors, and local residents? And that’s something we are working on. And you can see coverage, Cornwall saying, we don’t need any more visitors, but actually Cornwall’s had a rather soft summer, and so suddenly there’s a realization that actually you need visitors, because they keep the pubs and the restaurants open that everyone goes to visit. So I think it’s telling the story of why visitors are important in a way that connects emotionally and isn’t just about the money, and then working with local groups to make them part of the answer, so that they’re the people that are hosting and are cooking meals, and are going to tell the story of the gardens and what they do in that local area. So I think that’s an area where we absolutely have to step up. And that is a key part of a sustainable industry.
Thornton: I think for Intrepid, Intrepid is a certified B Corp. So I don’t know if you’re familiar with the B Corp movement, but I think Patagonia is the most iconic purpose-led organization. So Intrepid is part of that movement, and what it is, it’s for-profit businesses trying to benefit all stakeholders. So I have a responsibility to, of course, look after my customers, look after our people, but critically look after communities and the environments within which we operate. So we use the supply chain methodology where we’re trying to make sure that we’re working with lots of smaller, independent businesses in destination to make sure money gets to grassroots levels. Fundamentally what we do is going off and having local meals in local restaurants, staying in local accommodation, not using Western chain hotels, for example. Using the local transport as much as we can as opposed to our own privately chartered buses.
And by doing that it means the majority of the money stays in the destination, and when the majority of the money stays in the destination, it’s making the biggest possible impact to local communities. Now the thing you have to be careful of as a tour operator that carries hundreds of thousands of people around the world is that you make sure that that dispersion of income is very real within destination. So you can’t just use one cooking school in Delhi or one home stay in Ho Chi Minh, otherwise you can really mess up the communities within destination itself. So it’s dispersion of income and trying to get as much into local hands as you possibly can.
Habtemariam: We have time for questions from the audience. So question for you, Patricia. You didn’t mention the Commonwealth. Would that be a focus for travel, for getting a source market? Would that be an opportunity to grow?
Yates: What I would say is that the attraction of Britain for most people is its history and heritage. And the downside of that is that there’s no sense of immediacy, so you need people to come now. So when we’re focusing on getting growth back, which we have been since COVID, you go to the markets that are easiest. That tends to be America, tends to be Australia, Europe, because it’s closer to us. So it’s people that have a shared love of that history and heritage that you can work quite quickly. If we’re looking at the future, we have to appeal to markets that don’t have that sense of shared history and heritage, and we have to think, what do we have that works in those markets? And actually film and TV does still work in those markets. So it’s really thinking about what works for those customers in those markets that makes them aspire to come to Britain, and will then get them on the plane.
Habtemariam: Got another one. For both of you, okay. More actually for Intrepid. So how do you balance wanting to show new destinations versus customer demand for must-sees, because you want to tour include the UK without Big Ben or London?
Thornton: Intrepid, we barely run any trips in the UK. I love the UK, I’m from there, but it’s not a core destination for us. Patricia’s already doing a fantastic job without us, but I think you’re always trying to find that balance between the iconic sites, and people want to see them and they want to tick them off and they want to get the iconic photo. And what we try and do at Intrepid, just brutally is get you there first thing in the morning or last thing at night away from the crowds, but critically we’re trying to take you to the places you wouldn’t otherwise have seen for yourself. And we know through very intensive customer feedback, we got 50% feedback from every single customer who travels with us, and we know that the highlight of the trip wasn’t actually going to see the Taj Mahal, it might’ve been staying in a unique local palace or having a meal with a local family they didn’t expect to.
Facilitating experiences that you wouldn’t be otherwise able to do by yourself. We also know that that interaction with the group, that connection with each other, 65% of our travelers are solo travelers, that antidote to the loneliness pandemic that I talked about at the start. A key thing of what Intrepid does is bring people together and one of the highlights of the experiences is that group interaction. So for me it’s not necessarily the iconic sites. Yes, people want to see them. The repeat travelers to Intrepid, they’re traveling with us because of the experience we bring, not necessarily that iconic site that they’ll be able to tick off.
Habtemariam: So for you, Patricia. So what about visa regulations and the ease of opening of borders from countries which contribute to the economy, for example, India?
Yates: There’s lots of talk about India at the moment, and whether visa is going to change there. What I would say is that I have staff in India who are Indian, they work with the visa people and with Indian tour operators to make sure that our visa people understand that the process that they’re operating, the impact it has on tour operators. So there’s a direct conversation there that we convene and try to ensure that our visa offer and our processes are as simple as possible.
Habtemariam: The visa issue is definitely a slowdown. It definitely holds back a lot of travel for a lot of…
Yates: Britain’s just introducing an electronic travel authorization in Qatar, so that’s a trial of that. That had a visa waiver scheme. But the ETA is cheaper. It lasts for two years for multiple visits, and I think that will be a real driver of travel from the Middle East. So there are obviously new ways of looking things and trialing out new visa applications.
Habtemariam: So we’re out of time guys. Thank you so much. Thank you for this chat.
Thornton: Awesome, thanks.
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