The Future of Hospitality Is Space: A Zanzibar Case In Focus
Every travel or hospitality article you read is going to start just like this one. All of us must premise anything to do with the future of travel with the reality of the coronavirus, what it’s done to the industry, and to the way in which we seek travel value from now on. Many analysts and authors address the “future of hospitality and tourism,” but few think outside the conventional box.
Questions arise from the dislocation effects the COVID pandemic has caused. Hotels around the world have adjusted to the so-called “new normal,” but not very many have gone all-in, considering that the industry has been completely transformed. Most business people, in general, seem to be biding their time so that business as usual can go on. And buzz terms like “sustainable practice” are still not much more than trendy marketing ploys. So what will most travelers expect in the coming years? Are all-inclusive experiences dead? How will alternative tourism evolve?
First, let’s take a look at the dogma out there. This report from the IMF concerning island tourism and the pandemic effects is a perfect example of siloed thinking in practice. Here, the experts talk about “reigniting tourism” for countries heavily dependent on the sector for GDP. Even their inclusion of alt-tourism sectors like eco-tourism, only act as add-ons to existing frameworks/strategies. The report even reveals how the IMF and other entities are prepared to throw in the towel if a reboot of past tourism economics cannot be accomplished.
“Finally, should the reduction in travel be longer lasting, owing to changes in tourist preferences or economic scarring, some tourism-dependent countries may need to embark on a long and difficult journey to diversify their economies.”
Yes, the report Tourism in a Post-Pandemic World concludes with in the finality of the matter. A more in depth look (PDF)from Skift Research and McKinsey & Company from by back in 2020, does a better job of illuminating the current and future situation. If you do the deep research, it quickly becomes obvious that a return to pre-pandemic operations is going to be impossible. We are in a paradigm shift, one that will bury traditional thinking deeper than any archaeologist can dig. While all-inclusive and other pre-pandemic travel will go forward in profitability, expecting growth in this sector is suicidal without significant changes. The following passage from the report’s executive summary helps frame my arguments here, as well.
“…travel companies should seek to understand their customers as microsegments, not monoliths. Travel is, after all, deeply personal. Second, travel companies should widen their view of what constitutes the customer journey and design the next set of thoughtful customer-experience interventions. Third, companies should design new, perhaps unconventional partnerships that restore travelers’ confidence and set this global, fragmented, capital-intensive industry on track to financial sustainability.”
Another report by McKinsey, cited by Skift, revealed that adventure travel had seen (at the time of the report) the fastest recovery during the peak of COVID. This trend was already in the mix before the pandemic, but now this form of alt-tourism will boom. Needless to say, hotels in locations well suited to outdoors adventures will see bookings spike even in the off season.
The report goes on to suggest that travel companies should take advantage of the opportunities now present in order to “embrace and preserve their crisis-induced agility and nimbleness for the long trip ahead.” More importantly, the report frames the future with a short discussion on a segment that was already growing before COVID. The market for “vacation rentals — particularly those catering to roomier properties closer to nature “ fared a lot better than hotels did during the peak of the crisis. This is not rocket science. Social distancing was not simply a governmental and health safety practice that would be shortlived. In fact, the crowding issue came into prominence when we first mentioned “overtourism” years ago.
The big question where vacation rentals is concerned is whether or not an advantage over hotels can be maintained in the short, medium, and long term. The answer here is simple. Not if fleet-of-foot hotel operators can innovate and expand on their potential. While huge all-inclusives are certain to take a hit in the mid and long term, boutique operations and properties that can optimize for guest experiences will gain ground. “Space” is one concern, but the perception of exclusiveness and other factors play out well for some properties. Our colleagues in marketing here in Crete, have just expanded on this premise for an interesting market.
Revitup.direct, envisioned by EyeWide Digital Marketing founder Minas Liapakis, now manages the 16 room Sunshine Boutique Hotel Zanzibar in order to expand on already proven management practice. Liapakis’ companies have not just weathered the COVID pandemic. The numbers he’s shown me boil down to substantial client profits even in this crisis. When I learned RevitUp had begun managing the Zanzibar hotel, I asked Liapakis the obvious question, “Why now?”
“The pandemic forced us, like so many businesses, to rethink our strategies. And we had to think fast. We’d already substantially increased another Zanzibar hotel’s profitability, even in the middle of the crisis. So, carrying what we learned and practiced forward, was only a logical step.”
RevitUp multiplied the profits of SEVI Boutique Hotel Zanzibar by a factor of 3x, we learned previously. And now, given the trends mentioned, I am really surprised Liapakis and his partners are being so conservative in managing only one Zanzibar hotel. He showed me bookings in the run-up to prime season yesterday, and to be honest, I was shocked. Booked at 107 percent for yesterday? A big factor in all this is the size and configuration of these hotels. Sunshine Boutique has 16 rooms that are really suites or more abtly, bungalows when all is said and done. The illusion and the reality of being given more space is just there — big time!
Think about it, the pandemic is still going on! Liapakis will probably hate me for telling, but COVID has put us all in tough love mode. Anybody not able to shift on the fly is about to be in big trouble. Here in Greece, the government is forced to take drastic measures to get everyone vaccinated. Russia and other nations are on this same threshold.
These boutique operations can also leverage their advantages to cater to expanding segments. A good example, the so-called digital nomads, are also discussed in the Skift report regarding the blurring of lines between business and leisure travel. Working remotely from a secluded white sandy beach in the Spice Islands has a kind of primal appeal that may fuel a coming tidal wave of profit for some. What if 80 percent occupancy immediately became 100 percent because of long-term guests? And for properties like Sunshine Boutique, located in nature wonderland, alt-tourism focused on nature and the outdoors should be a foregone conclusion.
Zanzibar, in particular, shows great promise for the short and long term. Authories there have already reported a tourism recovery since welcoming 188,798 international tourists in the first half of 2021, an increase of 19.8 per cent compared with the corresponding months in 2020. And most of these arrivals were from Europe. And peak season has not yet begun.
The IMF and most of the “bean counters” discussing the state of travel and hospitality are much too firmly entrenched in the past. Island destinations do not need to open fish canning factories and basket weaving enterprises to survive, they only need to innovate to serve the demand for better, more sustainable experiences. A quote by Matt Roberts, CEO of Vacasa via the aforementioned report serves here:
“I think this notion of space is a big one, and I think it’s going to be one of those enduring things. I think people are also discovering more of the benefits of being outside and incorporating outside travel.”
Finally, for those out there who find my analysis wanting or even suspect, this pandemic is not just another economic crisis or downturn. It’s a wakeup call that rings in tandem with the climate change crisis. Businesses that expect things to return to normal, are in for a big surprise. Take this fascinating new initiative (see Ad Week) called “Hate to Protect.” Tao Guides, which publishes travel guides committed to sustainable tourism, has created the campaign to discourage tourists from visiting certain destinations by posting negative comments to popular review websites. I can hear the collective whimpering, “That Greta Thunberg…”
And hoteliers though a bedbug review could hurt? What happens when all-inclusive guests start bitching about their toes being stepped on in the buffet line? Or, that deserted village down the road from the giant resort, what if that becomes a focus? If I were still in the PR business, I’d ramp up my reputation management department. I’m advising every resort owner I know to diversify, to innovate, and to figure ways to emerge from this crisis stronger than before. For Zanzibar, a few more obstacles and possibilities should be brought to the forefront. Overtourism being one discussion that is both a hurdle and a potential. But this is a separate discussion. I can say that the tourism stakeholders of the Spice Islands are well advised to focus on premium tourism rather than the budget segment. I focus on this in the next discussion.
