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Tourism firms need to adapt post-Covid

July 21, 2023
in Business
Tourism firms need to adapt post-Covid
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Photo: 123RF

The tourism sector is being told it needs better strategy, more investment and must be prepared for takeovers if it is to thrive in the future.

A report by Westpac industry economist Paul Clark said adaptability would be the key to the sector getting the best financial returns as the challenges post-Covid start to mount.

Clark said tourism businesses would need to be more analytical to spot changing trends in the industry, devise strategies to take advantage of the opportunities and capture them.

“To thrive in this environment, tourism firms will need to better sense opportunities in their operating environment and organise the resources they need to grab them. They will also be able to transform themselves in order to capture the added value from these opportunities.”

Clark said tourism firms should be boosting their analytical capabilities, leveraging off existing tourism connections, making sure they engage with customers and step back from day-to-day operations to give thought to changes.

“Achieving this will not be easy. This is a sector dominated by small, operationally focused firms that struggle to keep their heads above water even in the good times. Under-resourced, they often do not have the capacity to quickly adapt and innovate.”

He said one way to bring about change more quickly, although it would be more disruptive, would be through rationalisation of companies and creation of alliances.

“That would create economies of scale as well as boost investment capacity levels, both of which are necessary if tourism firms are to make more of the opportunities in their operating environment and transform their operations.”

Clark said he was not convinced by calls for the sector to concentrate on getting higher value and returns from better off tourists than high-volume, low-spending backpackers and the like.

He said the sector survived and thrived on all types of overseas visitors.

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