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Cruise ships stuck at sea, airlines going into voluntary administration, borders closed and travellers racing deadlines to get home. There’s no doubt the travel and tourism industry was an early victim of COVID-19. But what does recovery look like? Tourism expert Professor Sara Dolnicar from UQ’s Business School explains what the tourism industry of the future might look like.
Transcript –
Planes, trains and a whole lot of pain: Tourism and COVID-19
Ginger:
G’day, you are listening to Seriously Social. This is the podcast where we use the lens of the social sciences to help us consider how Covid-19 is impacting Australian society, our relationships, human connections and societal structures. We get experts from the social sciences to delve into all those nagging pandemic questions, whether it’s aspects of your own life you’re wondering about or queries about the wider community. With me now is Sara Dolnicar. She’s a professor at the University of Queensland’s Business School with expertise in tourism. Sarah is also a fellow of the Academy of the Social Sciences in Australia. Thank you so much for joining me.
Sara Dolnicar:
My pleasure, Ginger.
Ginger:
Wow. The tourism industry took a belting in the pandemic, so some people are saying tourism is dead. How are you looking at this with your expertise?
Sara Dolnicar:
It’s interesting. We hear so many opinions now and most of them are very apocalyptic in its outlook. Really I think a lot of what’s going to happen is hinging upon whether we find a vaccine or not. If we do not find a vaccine, then the tourism industry is going to have to radically reinvent itself because suddenly safety is a serious concern. We can’t move freely, and movement obviously is the basis of our ability to go on holiday and go on vacation. If however, we do find a vaccine in the near future, then potentially we might return to our old normal faster than we expected.
Ginger:
Do you really think that’s going to happen though? Because say something like going on a cruise after these terrible incidences where the virus was just spread and so many people died as a result of being on those ships, that fills me with absolute terror.
Sara Dolnicar:
Yes. I don’t blame you, but tourism is very interesting? Why do people engage in tourism as customers, as tourists? Because it makes us really happy, right? It gives us joy, it creates pleasure, and as humans we crave that. So tourism, therefore, is actually a very, very resilient sector. Questions like this arise often if there’s a disaster with an aeroplane. We have an aeroplane crash. And then the discussion arises, will people fly again? Will they ever fly again? And guess what? The next time they book a trip, there is the cheapest carrier and they fly again. So our wish to engage in that really, really pleasant activity actually manages to overcome a lot of that fear that we perceive.
Ginger:
But what is going on in our brains? That seems quite crazy to me, for example, that you rush out to get a plane ticket because they’re cheap after a huge plane crash, or that you are going to go on a cruise despite the fact that we now know that a virus like Covid-19 can be spread all over a ship and it’s very hard to contain.
Sara Dolnicar:
Oh absolutely. And that’s why social sciences are the most fascinating thing ever, right? Because humans are just not rational beings. Human just do not sit down and calculate the likelihoods of things going wrong. But humans make, if you want a wrongly bias decisions, one of the well known biases is optimism bias, right? Where we are convinced it’s never going to happen to me. So the same question you asked about the cruise ship, you could ask every smoker, right? Why would you rationally choose to smoke if you know it’s going to increase your chances of dying of lung cancer?
Ginger:
So let’s for argument’s sake say that the pandemic ended, we had a vaccine, are we all then going to rush out and buy tickets? Are we all going to go to Hawaii straight away? What is going to happen in terms of tourism do you imagine?
Sara Dolnicar:
Well, I imagine that there will definitely be changes. I think the scenario where there is no change is very, very unlikely and we already see those changes. So the main change I see will be procedures. In Hong Kong you might’ve seen that they already have a pod where a human walks in and gets full body sprayed and disinfected. They don’t use those for travellers at this point in time, but they may well.
Sara Dolnicar:
We might find ourselves in a time where if we do choose to travel internationally, it may become very, very expensive because the carrying capacity of the plane is going to be lower. Because every airport is going to have multiple levels of protection to make sure people are safe. So will there be changes? Absolutely there will be changes in procedures. But will we stop travelling? I doubt it. Will the tourism industry stop operating? I doubt it. The importance to the economy of tourism is very, very, very high. It’s about 10% of GDP globally and one out of every 10 jobs. In some countries, it’s a lot more than that. So I think as soon as it is safe, the tourism industry will try to rebuild as quickly as possible.
Ginger:
Some people are talking about a kind of global reset in the tourism industry and what you described to me when we were chatting before this interview as a ground zero when it comes to sustainability, which is one of your real areas of expertise. What do you think? Are we really going to see this reset?
Sara Dolnicar:
I’m obviously very passionate about this particular area. My entire research programme currently is about how to make tourists behave more environmentally friendly. So I would love to see nothing more than a real reset and a real rethinking of the negative environmental consequences of tourism. People don’t realise because tourism is a very, kind of ‘romantic’ industry. If we talk about mining or steel production, the picture we get is not quite as romantic, but tourism in fact is the fifth most polluting industry on the planet. It contributes up to 12 and a half percent to global warming. It generates 8% of all of our carbon emissions. We produce 35 million tonnes of waste I could go on. All these pleasure we have comes at a huge, huge environmental cost.
Ginger:
I’m just so shocked by that figure, it’s incredible. Why do we never hear about that?
Sara Dolnicar:
Well, we do discuss that in our area of research all the time, but of course it’s logical for the tourist not to want to discuss it. Because remember, it’s your precious two weeks off. All year you’ve been working to earn that time off. You have in your mind the licence to sin. The last thing you want to hear from me is how it harms the environment. So we don’t want to really know how much it harms the environment.
Ginger:
I was watching one of your fabulous videos about trying to get people to opt, when they’re in hotels, not to have their room cleaned as often. And actually the measures that convince people to have their room cleaned less were very simple. So could it be Sara that we are not just resetting the safety and the cleanliness side of things, but it would be a perfect time to actually reset the clock.
Sara Dolnicar:
It would be a perfect time but I am very sceptical. The reason I’m sceptical is because… [even] when the tourism industry was going well and super healthy, that was not the primary concern. I would like it to be, but it wasn’t. Now we have much more existential problems. People lost jobs. Entire sectors are wiped out and do not know when or how they will get back on their feet. Again, that’s human nature. When it’s about survival, the good of the planet is probably not going to be the first thing on people’s minds.
Ginger:
A lot of people lost their jobs in tourism. It employs a lot of people. So what can you tell me about the current state of that sector in terms of employment?
Sara Dolnicar:
Well, the current state of the sector is devastating, absolutely devastating. And the important insight from this is actually that before Covid-19 hit we knew that the nature of much of that employment is very insecure. We were celebrating the gig economy. We were seeing the benefits and I’m not saying there’s no benefits. So you rent out a spare room in your house on a peer to peer network. Well, you can do that if you are maybe 55 and nobody wants to employ you. You can do that when you are a mother or father with five kids roaming around. So there are benefits of this kind of employment. But at the same time it comes at the price of having very little job security. And that’s what we saw. And we would have never predicted the extent to which it can hurt people when a real disaster hits. So devastating is the word. That is the consequence of this pandemic on tourism and hospitality, employment.
Ginger:
And the economic heat because of Covid-19 is massive. And one of the things that has done is show up this real weakness in the economy, which is a very casual workforce.
Sara Dolnicar:
Absolutely. I think that the real challenge for us – moving away from the environmental topic, but still on the topic of resetting the industry – and the opportunity if we are able to take it from this is to think about new employment models which could leverage some of the experiences we’ve actually seen unfold. If you think [about the fact that] Qantas cannot employ people, so they have to stand them down. At the same time, supermarkets are desperate for more people. Call centres need people. Interestingly, some of the base skills these people have are very similar. They need to interact with humans. They need to be able to problem solve, they need to be able to deal with complaints. So maybe thinking of it as a tourism and hospitality workforce is conceptually wrong. Maybe we need to train people to be really, really well trained for the service industry more broadly so that when these kind of situations emerge, they have another home quickly and they’re just not unemployed in a queue.
Ginger:
It’s an amazing idea, isn’t it? Because it would actually build in a kind of resilience rather than what we have at the moment, which is as we just said, a real weakness of a casual workforce. You’ve written a really interesting paper about this Sara, and what did you conclude when you were analysing the workforce in this way?
Sara Dolnicar:
I was fortunate. I worked with two young colleagues here at the University of Queensland because I’m not an expert in workforce, but they are, in fact, one of my colleagues did a PhD on the gig economy. So we decided let’s just have a think about it. And we allowed ourselves the freedom of a social scientist to think what in an ideal world could this look like. And we do think in an ideal world we would train people to become outstanding service workers.
Sara Dolnicar:
Then, there are many, many sectors in the service industry. [This thinking about training tourism workers differently] goes as far as supermarkets, flight attendants, [it] could be aged care, or out of home care or call centres. If we train people really well to be good at the base skills that are needed in all those sectors, and then over the years they acquire more sector specific skills and maybe even more role specific skills, it gives them the depth, but it also gives them the versatility. Then, with relatively little switching costs, they could move across the different sectors. That would be a very constructive way of moving forward, which would not depend on emergency payments by government. We would try to actually manage this process within the services industry.
Ginger:
One of the things you mentioned briefly just there a couple of minutes ago relating to the gig economy was about Airbnb, which you also have an interest in and have done a lot of work around, what has happened to Airbnb?
Sara Dolnicar:
Well, Airbnb has always fascinated me right from when it started. People are willing to just check into someone’s spare room – so many aspects of this is just remarkable. I’ve studied it for a while and then Covid-19 came, and Airbnb bookings are down 96%. This phenomenon was defined by exponential growth and not only by the growth of Airbnb. Think of the millions of people who have become micro entrepreneurs. Not only the hosts, the cleaners who were cleaning, the linen companies that were supplying, the gardeners, the pool carers, the companies that have become intermediaries who actually help owners with the hosting. So millions and millions of people are hanging off this exponentially increasing sector and suddenly it’s all over.
Sara Dolnicar:
One thing that’s interesting is the drop. But to me that was not the most interesting bit. The most interesting bit is what will happen now to the nature of the beast? Because the nature of the beast originally was Mom & Pop opening a spare room. Then it becomes so commercially attractive that investors moved in, right? And they just went in and they said, “I’m buying this apartment and I’m going to repay my mortgage by renting it out on the short term market.” And we saw more and more of that, more and more. And the implicit assumption was it’s never going to stop growing. It’s just going to keep growing. We just keep buying properties and just get more investor hosts. And suddenly it’s all gone. And suddenly we have all these investor hosts paying bills, not having any revenue. So there’s a real chance that Airbnb will move back to its original ethos.
Ginger:
So that’s really interesting, isn’t it? Because you had these giant disruption and you saw local councils all over the world trying to govern this. You saw the outcry from the hotel sector and now these giant disruptor has obviously been disrupted by the pandemic. Are we going to go back into hotels? Are the likes of you and I, if we ever get out of lockdown, going to still stay in people’s spare rooms, are we going to be worried about hygiene? What’s going to happen?
Sara Dolnicar:
I’m not too worried about demand. I think the moment we can travel, again, the demand will be there. I’m more concerned about supply. The Mom & Pop houses will still be in business. They will still make their room available. But what about all those investors? They are suddenly thinking, “Well, hang on. There’s a lot more risk involved in this business than I knew.” So I don’t think that this whole sector has a demand problem. It’s going to have a supply problem because potentially fewer people are going to play this investor host game.
Sara Dolnicar:
The point of regulation is an interesting one with Airbnb because the public discourse about Airbnb was very, very much about who’s regulating how, are we going to prohibit this? Are we going to regulate, are we going to settle at a upper limit? Are we going to have licences? And again it’s flipped…We might see a world where public policymakers or policymakers in charge of tourism will try to desperately find ways to encourage people to rent out short term. It is truly mind boggling because the one event, especially in peer to peer accommodation, has just meant such a seismic shift for regulatory needs.
Ginger:
So if you imagine the industry in five years time when this is all over, what is it going to look like?
Sara Dolnicar:
I think it will still be alive and well, but there might have been a bit of… There will be a little bit of a balancing out, right? This real spike of investment and investor hosts; I don’t think that will keep growing. I think it’ll be levelling out a bit. The Mom & Pop Houses will still be there and there will still be demand for that. I think there be a lot less of the real commercial short term rental business that what we’ve seen over the past five years or so.
Ginger:
And what about the entire industry, the tourism industry? How is this pandemic going to shape the future of tourism, not just in Australia but around the world? Like are cruisers going to disappear? Are we all going to go back to hotels? Are we all going to be paranoid about dirty planes? What’s going to happen?
Sara Dolnicar:
I think for starters it will be driven to a large degree by finding a vaccine or not finding a vaccine and how quickly, and that’s not the end of it. Covid-19 is actually not just Covid-19. It is the prospect of Covid-20 and 25 and 54, right? Suddenly as an industry we are aware that these things can happen anytime. And we understand the absolutely existential fatal consequences when it happens. So without any doubt, cruise ships, aeroplanes , whoever is providing a service will have a massive change in procedures.
Sara Dolnicar:
There are already robots running around airports and hotels, right? There is no doubt that’s going to change. Now the risk, which is a very structural risk to tourism, is that all those procedural changes will increase the price of the services provided. [Where] the price of the services provided increases to where we’re actually back at the point where tourism becomes a massive luxury good. That’s not a very attractive prospect. Before Covid-19 we were talking about social tourism and how we would like to give everyone the opportunity to enjoy vacation. Suddenly we may end up at the point where it’s becoming unaffordable for a large fraction of the population.
Ginger:
It’s almost like rewinding to say the ’50s when it was so unusual to travel, to go on a ship or to go on a plane and it was expensive and the ordinary person didn’t do it. The ordinary person might drive a couple of hours to the beach, but that was it.
Sara Dolnicar:
You’re absolutely right and I think that’s exactly where we will be immediately. The short term future will be domestic travel. As soon as we’re allowed to travel between states again or between New Zealand and Australia, there will be immediately demand. Why? Because we have been locked up for two months now. We are desperate for a vacation. So yes, domestic travel, road trips, no planes. I’ll sit in my car because I’ve cleaned my car and I’m going to drive two hours down to the beach and I’m going to stay there in something where I know it’s clean, whatever it might be. Whether I perceive an Airbnb to be cleaner or a hotel is my personal decision, right? But absolutely that will change and yes, it could well happen that international travel for the foreseeable future is unaffordable.
Ginger:
It’s kind of tragic actually in a way. Like when I think about say being a 19 year old and backpacking around the world, perhaps my children will never have that opportunity.
Sara Dolnicar:
Yeah. It is interesting times, isn’t it? It’s also interesting things we teach our children when we look at them and we say, “The most important thing I will teach you is to wash your hands.” And you think, “Wow.” Right? That wouldn’t be a thing my mother would have told me.
Ginger:
No indeed. Is there anything else that you want to say Sara?
Sara Dolnicar:
Yes. I would like to take the opportunity to say to make a more general observation, which is not so much about tourism research. In many societies we seem to lack respect for the social sciences and for the sciences. And we belittle them and we think, “Oh, that’s not a very wise investment of our taxpayers’ money. Then a moment like this comes and suddenly humanity depends on scientists developing a vaccine and on social scientists to guide policymakers how to change people’s behaviour, how to influence people to behave in the right way. I wish we could remember that because again, my theory is once we have the vaccine and life moves on, we may just forget how important the work of scientists and social scientists is.
Ginger:
Thank you very much for speaking with me today.
Sara Dolnicar:
My pleasure, Ginger.
Ginger: And thank you very much for listening to Seriously Social. If you like what you’re hearing, don’t forget to share our podcast with your friends and on your social channels and rate us wherever you get your podcasts from.
