How One Of The World’s Largest Industries Could Emerge Stronger From This Pandemic (Opinion)

Written by Gabriel Tan, a Forbes Councils Member

Before the COVID-19 pandemic, tourism had become one of the largest industries in the world, generating $9.2 trillion in 2019 and accounting for over 10% of global GDP and 334 million jobs worldwide. Despite being the hardest hit with various restrictions put in place to curb the spread of COVID-19, it is impossible to ignore tourism as it has become one of the fundamental pillars of economic growth and development.

Over the years, the industry has been experiencing a couple of major economic, social and environmental shifts that require a rethink, and COVID-19 only accelerated the need for change. The industry’s future is closely linked to how the sector can address these issues successfully.

Economic Issues

On the economic front, uncertainty is probably at the top of the list. There is a huge question about when tourism can recover and how soon tourism numbers can be back to where they were in 2019. According to the 2021 Global Hospitality Market Report, the Asia Pacific region accounted for nearly half of the hospitality market in 2020, making it the single largest region in the market worldwide. According to Colliers Hotel Insight Q1 2021, Asia Pacific tourism recovery is forecasted to reach pre-COVID levels in 2023.

Another concern also at the top of the list would be related to supply chain disruptions, and with an estimated $2-$4 trillion in revenue being lost to supply chain disruptions in 2020, it is obvious to see why this is so. According to Harvard Business Review, “The supply shock that started in China in February and the demand shock that followed as the global economy shut down exposed vulnerabilities in the production strategies and supply chains of firms just about everywhere. Temporary trade restrictions and shortages of pharmaceuticals, critical medical supplies, and other products highlighted their weaknesses.”

Social Issues

According to Euromonitor, close to half of the world’s population now consists of Millenials and Gen Z. Millenials are those born between 1980 and 1994, while Gen Z refers to those born between 1995 and 2009—both tend to be purpose-driven, more progressive compared to past generations and value experiences over material goods. This has contributed to the growth of impact-conscious travelers, according to the World Economic Forum, who ask new questions like, “How can I travel in a way that has a positive impact?” and “How many of my tourist dollars will stay in the local economy?”

In terms of tourism growth, a World Tourism Organization report shows that the Asia Pacific region has been consistently outperforming all other regions in the growth of international arrivals since 2005. This region is home to many countries with different cultures, languages and local nuances.

Just because two countries are next to each other doesn’t mean business is being conducted in a similar manner. Likewise, in tourism, what it takes to be successful in one country doesn’t necessarily make one successful in another.

Environmental Issues

The World Bank reported that unless urgent action is taken, annual waste generated globally is forecasted to reach 3.40 billion tons by 2050. Compared to the 2.01 billion tons generated today, that would be an increase of more than 70%. Leading the increase are South Asia, East Asia and the Pacific, with a forecasted total waste generation of 1.38 tons—more than 40% of the global number.

According to United Nations Environment Programme, human activities are the main cause of climate change. In particular, the concentration of CO2, which is largely produced by burning fossil fuels and accounts for more than 65% of greenhouse gases, is directly linked to the average global temperature on Earth.

A Powerful Solution: Sustainability Beyond The Environment

Old ways won’t open new doors. To solve the unprecedented problems faced by the industry, one powerful solution is sustainability that goes beyond just the environment and takes into account economic and social issues.

Sustainability And Economic Issues

To solve economic issues concerning uncertainties and supply chain disruptions, one could look through the lens of sustainability to consider long-term solutions with better value, flexibility and a more resilient supply chain. Working with like-minded partners and decentralizing manufacturing can help achieve these goals.

Sustainability And Social Issues

Sustainability can also address social issues whereby one could look at solutions that demonstrate actual positive impact in the local community.

• Consider localization. Localization is also another key element that can ensure more success in local areas. Making sure solutions put in place are locally cost-competitive also helps ensure the long-term success of the solution.

Sustainability And Environmental Issues

• Use biodegradable materials and minimize waste and the use of plastics. This should be a major consideration to address the current environmental emergency.

• Opt for in-country or in-territory manufacturing. This helps minimize global carbon emissions while also contributing to the local prosperity, thus creating a win for businesses, communities and the environment.

Economic, Social And Environmental Benefits Of Sustainability

Sustainability enables better cost- and risk-management in the midst of uncertainties, enhancing business continuity. Sustainability also appeals to Millenials and Gen Z, enabling positive impact which in turn translates to a better reputation and a better customer experience. Finally, sustainability provides everyone the opportunity to play a part in reducing waste and carbon emissions, thus ensuring future generations will be able to enjoy a better tomorrow.

Global Solution = Sustainability x Scalability

Given the global scale of challenges in the tourism industry, a global solution is required and sustainability on its own will not be enough to do the job. Sustainability must be combined with scalability to accelerate solution adoption and multiply the benefits. Having scalable, sustainable solutions can enable the tourism industry to emerge stronger, while also ensuring wins on the economic, social and environmental fronts, leading toward a brighter and more sustainable future.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s