In Uncertain Times, Savvy Leaders Make Bold Moves
As we navigate through 2024, the travel and tourism industry finds itself squeezed between two formidable pressures: on one side, the global turbulence of elections, geopolitical tensions, and extreme weather events dominating headlines; on the other, the technological disruption brought by AI-powered trip-planning tools, along with increasingly powerful intermediaries in the travel planning process. In this landscape, uncertainty emerges as the only constant.
As someone who's weathered ups and downs in many industries, I can tell you one thing with certainty: now is the time to be bold.
The global stage: a perfect storm
2024 is shaping up to be a year of unprecedented global activity. With over 50 countries holding national elections, representing nearly half of the world's population, the political landscape is in flux [1]. Add to this the ongoing geopolitical tensions and the increasing frequency of extreme weather events — 2023 saw a record-breaking 28 weather disasters in the U.S. alone, each causing over $1 billion in damage [2] — and we have a perfect storm of uncertainty.
Historically, research has shown that U.S. domestic leisure travel growth rates tend to slow during presidential election years [3]. This year, while travel indicators appear robust, we're bracing for unique challenges:
- Advertising saturation: The deluge of political ads is driving up costs and depleting inventory for traditional media buys.
- Budget volatility: Leadership changes often lead to budget reassessments, potentially impacting tourism funding.
- Political fallout: Travel bans and boycotts resulting from political decisions can have unintended consequences on local communities.
The destination organization dilemma
In this climate, destination organizations often find themselves in the hot seat. Budgets are scrutinized as candidates debate government spending and housing prices. CEOs spend more time defending their organization's value instead of creating it. It's a frustrating cycle that diverts energy from the impactful work that benefits our communities.
The bold path forward
It's tempting in times like these to retrench, reduce spending, and stick to tried-and-true strategies. However, my experience has shown that the leaders who emerge strongest are those who lean into uncertainty and make bold, calculated moves.
This is our moment to be proactive and uncompromising in demonstrating our value. In an industry without a traditional cash register, this means doubling down on what we do know for certain:
- Double down on data: In an industry without a traditional cash register, reliable data is our lifeline. Invest in robust data analytics tools to fuel decision-making and demonstrate value. In a recent report on destination readiness, McKinsey recommends destination leaders across the globe use data to manage and forecast visitor flows [4].
- Optimize for quality: In a competitive advertising landscape, focus on attracting quality visits that have the greatest net impact on your community. Make community support part of your message — recent research shows that 69% of travelers consciously want the money they spend when traveling to go back to the local community [5].
- Tell your unique story: Cut through the noise and ad clutter with optimized campaigns. Let your destination’s characteristic attributes shine through. Take a page from Claude Molinari because he thinks your next vacation should be Detroit.
- Focus on the fundamentals: Safety and value for money significantly outweigh the impact of politics when it comes to choosing a destination, according to hot-off-the presses research shared at this week’s U.S. Travel Summer Summit [6]. Lean into your local advantages.
- Embrace innovation: Consider adopting emerging technologies like AI-driven personalization to enhance the visitor journey. A report by the World Economic Forum suggests that digital transformation could create $305 billion in value for the tourism sector by 2025 [7].
A ray of hope in the variability
Recent data from our integrated data model reveals an intriguing trend: while year-over-year median occupancy rates remain relatively flat, there's significant variability across destinations. This suggests that regardless of your current position, there's ample room to improve market share.
Conclusion
The road ahead may be uncertain, but my experience indicates that opportunities increase in times of uncertainty — savvy leaders who make it through tough times are those who lean into uncertainty with bold, defendable, data-driven strategies to make the right bets. Let's make some waves.
[1] Foreign Policy Magazine. (2024). "Elections to Watch in 2024."
[2] National Oceanic and Atmospheric Administration. (2024). "Billion-Dollar Weather and Climate Disasters."
[3] Travel Weekly. (2019). "If 2020 Is Like Other Presidential Election Years, Travel Growth Will Slow."
[4] McKinsey & Company. (2024). “Destination Readiness: Preparing for the Tourist Flows of Tomorrow.”
[5] Booking.com. (2023). "Sustainable Travel Report 2023."
[6] U.S. Travel. (2024). “Exploring the Intersection of Politics + Travel Behavior: An Overview of New Survey Results,” presented at U.S. Travel Board Meeting.
[7] World Economic Forum. (2017). "Digital Transformation Initiative: Aviation, Travel and Tourism Industry.”
