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Tourism businesses have had to bear the brunt of the Covid-19 lockdowns, travel restrictions, crowd-size limitations and curfews – more so than any other industry. Not only that, but over the past 18 months they have also been subjected to a constant stream of dire predictions that business travel will never be the same again.

 

Given the ravages of the third wave and the realisation that the vaccine roll-out might not prevent a fourth wave, it is perhaps understandable that predictions of the end of face-to-face business, and therefore business travel, sound compelling.

 

The widespread idea is that leisure travel will almost certainly recover and surpass its pre-Covid levels. People enjoy travelling for its own sake, and by now there is so much pent-up wanderlust in the rich world that holiday tourism is set to boom once the pandemic is over.

 

But not business tourism. According to the doomsayers, the traction gained by virtual meeting technology platforms such as Zoom, Microsoft Teams and Google Meet during the pandemic spells a substantial decrease for business travel. Many of the routine face-to-face meetings by executives and sales teams before 2020 will in future largely take place virtually.

 

Not so fast, says Anton Roelofse, regional general manager at Business Partners Limited, who believes that the grim forecasts that business tourism has peaked in 2019 are overstated.

 

The main driving force that will get the business traveller back on the road faster than most people think is competition. “It is all very well for a corporation to have a brand-new minimal-travel policy, but as soon as they lose the first contract to a competitor who had gone to see the client face-to-face, the policy goes out the window,” says Anton.

 

This dynamic is even stronger among small and medium businesses who simply cannot afford not to travel. Their entire business can depend on one or two contract which they often maintain through personal relationships. Replacing business travel with virtual meetings therefore never really featured as an option for SMEs.

 

Guest houses and other business-travel service providers could therefore consider targeting their marketing in the immediate future towards small and medium business owners, who are bound to be on the road before corporate travellers return.

 

Anton says sales people are just one part of the community of business travellers. Another subgroup, consisting of inspectors and site-maintenance teams, have never stopped travelling at all. Then there are visitors to industry conventions, which have been severely curtailed by the pandemic. Again, Anton is optimistic that regular industry conventions will return sooner than most people expect. 

 

Expos and conventions are the lifeblood of industry where players converge to spot the trends, build relationships and do business. They are networking events that simply cannot be replicated online. 

 

Conferences, where academics, public servants and society leaders and activists gather to discuss ideas and policy, may be slightly slower to return because they don’t have the same intensive competitive dynamic driving them as do expos and conventions. 

 

The past year has seen several experiments with virtual conferences, some of which may survive in future as small online symposiums, but they are not the same as real-life conferences with their rich networking opportunities. It may take a little longer, but conferences are bound to return to normal, says Anton.

 

Intra-company travel, where executives from the same multi-branch companies travel to meet each other for team building and collaboration might remain subdued while corporations experiment with remote working and virtual team building. But generally travel budgets are too small a part of most businesses’ expense profile to keep much of a lid on intra-corporate travel.

 

Maintaining a sense of team over the internet may be possible among corporate colleagues who already know each. But as more new colleagues join the team, the pressure starts building once again for face-to-face get togethers.

 

There is no doubt that the collapse of tourism over the past year and a half has been devastating to many businesses in the industry, but the hardship is certainly temporary, says Anton. He predicts that revenue streams for many tourism businesses such as restaurants will probably hover at 20 percent below 2019 levels for the next few months, but will continue to increase. By 2024 at the latest, the South African tourism industry should be thriving once again.

About the Author: Anton Roelofse

Anton Roelofse is our Regional General Manager for the West Coast Business Unit (Western Cape and parts of the Eastern Cape). He has been with our company for 35 years working and has supported thousands of SMEs through our finance and investment support programmes. In his role, Anton manages an investment portfolio of about R1 billion. Anton is a family man and enjoys a balanced lifestyle which includes sport, leisure time in nature and he is even known to enjoy the odd theater experience. Anton is our go-to-spokesperson for business turnaround strategy, business finance and hospitality and tourism industry articles.

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