Accenture’s Emily Weiss says business leaders must navigate uncertain times through the lens of future recovery scenarios
Guest Post: Uncertainty does not call for inaction in the battle for survival
Emily Weiss, managing director and travel industry sector lead at Accenture says business leaders must navigate uncertain times through the lens of future recovery scenarios
We all know travel demand has plummeted in the face of the pandemic.
Accenture’s COVID-19 consumer research found that 43 % of consumers are still cautious about re-entering society to resume normal activities.
So with some restrictions tightening again, many travellers are not ready to take a flight or stay in a hotel room.
With a 60% to 80% decline in tourist footfall expected this year, the global travel and hospitality industry is experiencing enormous losses.
The industry’s future is in flux. Leaders have critical decisions to make in uncharted territory. They can only look forward. There are many questions but one every leader is asking: How do I respond to this new reality?
It goes without saying that they must execute the day-to-day business.
They need to manage costs with precision, price well, and invest in the right assets at the right time.
These are qualifying actions for survival. However, there are winning actions that go beyond these non-negotiables.
These next-level moves are the difference between passively riding out the virus and actively seizing the first mover advantage in the new landscape.
These actions are grounded in several key areas:
Traveller experience. Develop stellar experiences across the travel journey—from dream and book to stay, loyalty and beyond.
Regain customer confidence with contactless and personalised experiences that serve their needs and address health and safety concerns.
Workforce excellence. Take care of your people, so they can take care of your customers.
Build a fit for purpose workforce with the right size and shape, leveraging analytics and AI to establish a more effective, efficient and satisfied workforce so employees, and the business, can adapt quickly to change.
Retail in travel and hospitality. Take a page from retail. Develop a merchandising engine and front-end platforms to extend products and services, diversify revenue beyond the hotel room, streamline purchasing processes, and build loyalty.
Travel intelligent services. Eliminate organisational data silos for better decision making and improve collaboration with ecosystem partners.
Tap into cross-organisational data insights and travel indicators to sharpen responsiveness, improve operational performance and customer experiences.
Intelligent operations. Use the latest technology to automate and simplify back-office processes, reduce costs and improve operational efficiencies with consistent and repeatable processes.
Living systems. Migrate legacy IT systems to cloud-based architectures and use technology as a catalyst to break organisational silos.
Improve performance and boost resilience while providing a platform to support ecosystem collaboration and speed and scale innovation.
Recovery strategy and sustainable growth. Withstand ongoing volatility by restructuring the business portfolio and the balance sheet.
Rethink and diversify the revenue model, operating margin streams, and the profit engine to meet objectives for business and environmental sustainability, driving growth over time.
Very few companies can pursue all of these themes with equal vigour in light of today’s cash, resource and capacity constraints.
It means setting clear priorities. In fact, the pace and sequence of these actions depends on how leaders expect the future to unfold.
Without a crystal ball, this is a daunting proposition. Even so, this is exactly the kind of decision making that savvy executives engage in all the time.
The stakes are especially high, and the unknowns especially overwhelming. Yet the ability to take action amid so many unknown – and unknowable – variables is at the heart of outmanoeuvering uncertainty facing the sector.
To help the industry navigate the current climate, we believe leaders need to look through a lens of four future recovery scenarios.
These scenarios are based on our analysis of Accenture proprietary and publicly available data.
They reflect potential outcomes and impacts from key external factors that influence global travel and hospitality demand; vaccine availability and virus containment, governmental and societal response, consumer sentiment and behaviours and the economic climate.
Each of these scenarios paints a distinct picture of recovery and includes priority actions:
- Remarkable recovery: Companies must act to take full advantage of a burst in pent-up demand, which largely returns to 2019 levels by 2022;
- Collective coexistence: Along with the world, travel companies learn to coexist with the virus through discipline and containment, and travel makes a tentative return;
- Market mayhem: Amid permanent volatility, companies must shrink and refocus on remaining areas of demand to survive. Some companies fail;
- Darkest days: The uncontrolled virus upends the industry, and companies must radically rethink their business models. Many fail.
Leaders must now decide which future they will start planning for and what that means for their business. One thing is clear.
Uncertainty doesn’t call for inaction. This crisis has created a new imperative – to take stock and take action to reset the business around the best ways to survive, and ultimately, realise sustainable growth.
Travel and hospitality as we know it may not be coming back, but a new era is just beginning. It remains to be seen who will survive to tell the tale.