In the lead up to the Future Hospitality Summit (FHS) Saudi Arabia, we asked a number of industry partners how they see the future of hospitality in the Kingdom of Saudi Arabia.
The manner in which the global tourism industry and consequently the hospitality sector will recover from the ravages of the last two years is a multi-billion dollar question.
Trying to second-guess the consumer decisions potential travellers will make is a fraught business at the best of times, but after a period of sustained – and unprecedented – restrictions on movement in all regions and nations, predicting how people will now go about booking travel for holidays or work has become an enormously difficult task.
The early indications were not encouraging.
In the second half of 2021, as travel restrictions began to be lifted, airlines reported millions of potential travellers were declining to book trips because they had little confidence the restrictions would not be reimposed before they could fly, or because they had encountered difficulty understanding how restrictions at their destination might affect them.
Given the nature of the low margin/high volume business model all passenger air carriers operate, finding ways to encourage potential travellers to overcome this understandable reluctance to book has unsurprisingly become the aviation industry’s number one short-term concern.
Failure to find a way to get people flying again will rapidly take on an existential dimension for carriers already severely financially damaged by the pandemic as governments become less and less willing to go on providing the kind of large-scale financial support that has sustained them since 2020.
Likewise, hospitality operators – amongst the businesses worst hit by the COVID-19 crisis – have less margin for error than perhaps they have ever had. Success in the coming months will depend on investing significantly – and correctly – now to meet renewed demand for travel in a post-Covid reality.
But what will that demand look like? Where will it see travellers wishing to go? And what sort of experiences will people seek now that increasingly freedoms they previously took for granted are returned?
These are fascinating questions. But finding answers to them is far from straightforward.
The emergence and importance of ‘authentic’ destinations
Over the course of the first quarter of 2022, signs of vitality within the travel industry have returned, increasingly vigorously.
More and more the sector is seeing two distinct types of travel booking. The first is a preference for much longer-term planning than was the case pre-pandemic, whereby travellers hope they will encounter fewer travel restrictions if they book to travel next year, or even later.
The second is last minute bookings, where travellers are able to exercise sufficient agility to quickly act upon favourable travel rules or Covid rates. US travel site Kayak recently reported it had seen a fifty percent spike in searches for flights within a seven day window.
Interestingly, it is the rise of what I deem to be ‘authentic’ destinations that have been amongst the most marked trends of what many are already calling the post-pandemic era.
These destinations are sought by people who in their travel choices are opting for long haul over short haul in a desire to feel the thrill of an authentic cultural adventure – be that in the presence of culturally-authentic buildings, meeting local people or having authentic cultural experiences.
UK-based travel operator G Adventures has reported that so far this year only 18 percent of global travellers say their preference is to travel short haul on their next dedicated vacation, and that instead people are actively choosing to book travel to what they consider to be remote, underexplored and brag-worthy destinations.
International holiday rental firm HomeToGo has likewise reported significant rises for 2022 among American travellers searching bucket-list global destinations that are renowned for their authentic cultural offerings, including Tuscany (up 141 percent compared to 2019), London (up 266 percent), Rome (up 237 percent), Paris (up 185 percent) and the South of France (up 88 percent).
These trends are significant because they are clearly suggestive of a reordering of travel priorities occasioned by the realities of the Covid years. Evidently, in response to the common feeling of confinement and boredom felt during lockdowns, there is now a yearning for experiences that deliver an authentic connection to tourists with a host culture.
It is clear that these new tourists are deeply interested in using travel to learn about history by immersing themselves in destinations that are considered to be of deep cultural significance. This I think explains why booking.com has reported a 60 percent increase in inquiries about travel to destinations including Egypt and Norway, for example.
We have also seen an increased preference for people to travel together with friends and family, rather than breaks to escape them. It is clear that people want the opportunity to reconnect with the people they love in new and interesting settings.
Destinations must now prove to prospective travellers that they possess an intrinsic, authentic, cultural value to capitalise on this new demand, and bring back guests to our hotels and restaurants.
As Group CEO of one of the Kingdom of Saudi Arabia’s flagship giga-projects, I may be biased, but I believe Diriyah is the perfect destination for tourists seeking this cultural authenticity. It offers a chance to connect with centuries of tradition and culture in a country that is still a mystery to many people.
These are exciting times for the global hospitality industry. People want to travel, perhaps more than ever. Already, there are forecasts that bookings could come close to surpassing 2019 levels globally by the end of the year.
These travellers seeking a culturally authentic destination will drive much of those bookings. We are proud to soon be in a position not only to welcome the world and to showcase the very best of Saudi Arabia’s rich heritage and culture, but also to play a key forthcoming role in the re-emergence of the international hospitality industry.
