Can Staycationers Save the Tourism Industry?
According to the World Travel and Tourism Council, 25% of jobs worldwide are in the tourism sector. The proportion is arguably higher in UAE and its that time of year when the majority of job-holders (i.e. those in other industries) feed the tourism industry with their travel plans. In light of recent news from major airlines operating out of UAE’s airports and their staff count, this number is bound to fluctuate in the coming months. In tandem, travel restrictions globally appear to be loosening up only marginally, making travel even more and more unpredictable, costly and difficult to commit to – let alone plan.
As a highly seasonal and price-sensitive market, every aspect of the tourism supply chain is struggling from airlines and OTAs, to airports to tourist sites like Disneyland and tropical beaches. As we’ve seen in the UAE, residents have resorted to staycations in lieu of traveling and this trend seems to continue well into the summer and beyond. This has come as a relief to the local tourism industry and residents really needing a break from the stress this year has brought. In recent weeks, we have seen the hospitality sector in the UAE capitalize on this: either by limiting day passes and up selling stays when access to resort facilities was restricted to in-house guests only to restaurants stringently accepting bookings only and capping both capacity and time diners can stay. These regulations, put in place largely for the public’s safety, has not deterred consumers.
In order for the industry to sustain itself and weather the storm this summer, what other options are available to them? The airports are starting to welcome passengers with a 14-day quarantine which could provide an opportunity for hoteliers to covert these mandatory isolation into retreats and a new form of staycation. Alternatively, those in self-isolation at home could benefit from takeout and catering options that established restaurants may be able to provide – like a quarantine culinary experience delivered to your home.
For any product launch to be successful, especially in speculative markets that we will be operating in for this summer and beyond, our market research can help answer the following questions:
- What are the cuisines that will be popular in this product offering?
This is the eternal question that is at the fore front of menu planning for restaurateurs. It is even more complex in a culturally diverse market like the one we operate in. While ethnicity no doubt plays a major role, we have seen how cultural exposure can also affect cuisine decisions for diners and menu planners. In parallel to considering cuisine, one must also ask to what extent proximity plays a role. Certainly, proximity drives a lot of decisions when commuting is a challenge.
- What are the price points potential customers are willing to pay?
Initially, after weeks of confinement, residents with financial stability were eager to book (and in many cases overbook) hotels. Time will tell if this trend will continue and how long hoteliers can ride the wave. On the dining side, price points will be a bigger consideration and residents eat out more frequently than they book staycations. Again, restaurant managers are advised to be strategic in their pricing and not focus on short term gains which may reverse the covers per day quickly.
- Can hotels in Dubai and the Northern Emirates attract repeat customers for staycations?
This will depend largely on international travel restrictions and how many residents still have a sense of job security. As our syndicated study indicates, a concern for hygiene standards and fear of exposure to the virus does not seem to be a significant deterrent and only impacts decisions for a small percentage of our sample.
- Will staycationers and/or customers opting for a culinary experience at home be brand loyal or do they prefer diversity?
For staycationers, length of stay will be the determining factor. Short/weekend stays may be inclined to be brand loyal and solely rely on the hotel’s outlets. Longer staycationers, particularly if they are in quarantine will value diversity more. As we are now in the middle of summer, 4 months after the outbreak of the pandemic, looking at the interests of incoming tourists and their appetite for diversity may be indicative of how and which restaurants recover faster than others.
- Above all, what is the market size for either product offering and any others?
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