01/10/2020 Opinion

Josep-Francesc Valls, Professor at Universitat Ramon Llull, Itziar Labairu, MsC ESADE, and Mara Franco, Assistant Professor Higher School of Technology and Management, University of Madeira

Strategic planning review of post-COVID destinations

Since the origins of mass tourism in the 1950s-1960s, travel has become the engine of regional development in most areas of the world, especially on the Mediterranean and Atlantic coasts. The tourist phenomenon has occurred due to the increase in international demand. Also, endogenous factors have largely been ignored, such as carrying capacity, the enjoyment of residents and nationals, social profitability, the creation of quality workplaces, cultural survival, territorial balance, the ratio of residents, second homes, national and foreign tourists and others. In most cases, strategic planning has been a result of growth in terms of number of tourists (López Olivares, 2002).

COVID-19 has drastically paralyzed the arrival of principal clients, i.e. international tourists. This factor will have medium and long-term consequences. It calls for a radical change in the destination-planning model and forces a profound revision. The category of the tourism and travel product has been modified: less demand, forced downsizing of the offer, a move away from massification towards more intimate experiences, greater interest in residents and local and national tourists, rethinking of the business models, offering higher salaries and radically applying sustainable criteria in the territory. We are in a period of rebuilding tourism (Blanco, 2020).

1. Scenario. Rather than seeking to implement a sustainable and innovative tourism model, the role of planning in the last 60 years has been mostly to set objectives for GDP growth, to organize Another aim was to modulate seasonality as much as possible and attract them, if conditions were right, to provide higher quality products. This tourism model has led to a steady increase in the overall number of international tourists (in Catalonia, from 17.9 million to 19.3 million between 2016 and 2019) and local tourists (from 17.2 million to 20.3 million). Average spending has risen from 960 euros per person to 1023 euros for international tourists; despite the drop in Spanish tourists, spending by Spaniards also increased from 253 to 269 euros (Idescat, 2020; INE, 2020). This success in the number of clients and in turnover, which has translated into an excellent GDP, does not hide two facts. The first is the low profitability of the tourism sector. Catalonia is the second European region in terms of the number of tourists (Eurostat, 2019); however, the hotel RevPar, for example, despite the fact that it has increased for this period, is 55.32 euros, an extremely low ratio if we compare it with other European tourist countries. In addition, it is even worse if we refer to bars and restaurants or other tourist services. The second fact is that the coastal destinations have been extremely slow to transform culture, work and leisure where tourism is a factor of transformation (Vera, López Palomeque, Marchena, Antón, 2011).

2. Revaluation of the national clientele. The international clientele has become the raison d’être of tourism since its origins. The flow of foreign currency has been the main attraction and the reason for the low productivity of tourism. But tourism must be refocused to take into account aspects such as the role of residents, the important impact of local and national clientele during and after the pandemic, second homes average destination expenditure, number of overnight stays, cultural and social sensitivity.

3. Key success factors. The key success factors for the management of tourism businesses are permanent innovation, training of talent, sustainability and comprehensive quality management (Valls, Neve, 2014; Valls, 2013). Permanent innovation not only embraces digitalization but also the creation and improvement of products and services and the entire value chain. If we compare tourism with the manufacturing industry, for example, it turns out that while spending on R+D+I for all services in Spain, including tourism, accounts for 49.1% of the total (compared to 45.6% for the manufacturing industry), the intensity of innovation is only one fifth (0.91% compared to 4.5%).

With respects to training, there are lower students in both secondary and vocational education (CES, 2016).

As for sustainability, two key elements for the viability and competitiveness of tourism are usually overlooked. The first is the economic and social element, that is, the capacity to create sustainable private business models in the long term; the sufficient size of the company for the market, the ratio of working capital to total income, the capacity to adequately remunerate all aspects, especially labor, and the social wealth of the environment, among others. These months of pandemic, we have seen the extreme weakness of a sector that has not been able to survive without income. In addition, the second is the cultural sector. The overcrowding of tourists since the origins of mass tourism has led to the depersonalization of the territory and the resented loss of differential elements of cultural identity, language, traditions and roots, gastronomy and way of life (Risteski, Kocevski, Arnaudov, 2012).

Quality, in which all the actors of the destination must be involved, is no longer about organizing the processes well, reducing the holes and obtaining 0 defects (Parasuraman, Zeithalm, Berry, 1985) but also about managing the experience integrally, understood as hospitality, satisfaction, commitment to consumers, trust and the construction of common values (Gallarza, Arteaga, del Chiappa, 2015; Treisder, 2015; Valls, 2013; Yeksel, Yuksel, Bilim, 2010).

4. Relationship between industry and tourism. In those post-pandemic days, the historical controversy surrounding the industry/tourism duality is reappearing in advertising, blaming the tourism sector for making society into a tourist attraction and becoming bloated. Although these are not incompatible sectors, far from it, as shown in the Tarragona-Salou area, competitiveness depends exclusively on each cluster and not on the GDP it contributes. The lack of competitiveness is a consequence of the tourism model applied.

5. Dimension of the companies. As an example, three ratios will allow us to know how the excessively small size of Spanish tourism companies undermines competitiveness. A) The level of debt in the Spanish hotel and catering industry in the short term is 13 points below the average for Spanish SMEs. B) The rotation of the working capital is negative with respect to the overall of the SMEs. C) Costs and returns in relation to sales volume are 10 points above the overall figure because of the intensive use of the labor factor (Blanco, Cuello, Ferrando, Fernández, 2020).

6. Public-private relationship. This relationship is widely known as the cornerstone of all planning, but mutual distrust remains. This relationship can only be understood if it is definitely strengthened through initiatives such as Business Improvement Districts, based on the collaboration between both. This is one of the most interesting fields of experimentation applied to tourism.

Bibliography

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