In a matter of weeks, we’ve seen the world turn upside down. After Covid 19 dealt the travel industry a massive gut punch, we’ve seen travel change like never before. Consequently, social distancing is the new normal, travel marketing is now centered around cleanliness and wearing a mask is mandatory on most flights. Tourism accounts for a major chunk of overall GDP for many global economies. These economies are now tasked with walking the tightrope. On one hand, they have to maintain the safety and security of their residents. On the other hand, they would see their economy suffer without tourism. Many tourism dependent economies are now looking to bounce back in a post Covid-19 world. However, how will they recoup lost revenue? Will they target only the rich and wealthy?
Travel Marketing: Targeting the Rich
In the pre Covid-19 years, we were all rightfully celebrating the democratization of travel. However, we could well see that tide recede as tourism dependent economies target the rich. Richer customers spend a lot more than the average traveler. It gives destinations the opportunity to earn more money by admitting fewer visitors.
Thailand continues to be a favorite for many global travelers. However, Japan Times reports that Thailand could well be on course to do exactly what I just discussed at the start of this post. Skift reports that Thailand’s tourism numbers are down 80% this year compared to 2019.
Thailand’s tourism-revival strategy is to target big spenders seeking privacy and social distancing in the COVID-19 era, rather than try to attract a large number of visitors.
The article quotes Thailand’s travel marketing strategy as elucidated by Thailand’s Tourism Minister:
One person can easily spend as much as five by staying at the finest hotels, he said, adding that full and free travel should become a “thing of the past”. If we don’t use this chance to create the most benefit for the industry, Thailand will lose out. This is an opportunity to reset the entire tourism system.
The Pundit’s Mantra
It isn’t surprising that Thai authorities are using this as an opportunity to also reduce overcrowding at many of their popular destinations.
However, this could well be a short term trend in many other countries as many economies look to recoup lost revenue due to Covid-19. Also, richer people traveling more often in the short run could well be a function of the economic conditions as well. As the economy bounces back, we’ll see more people willing to spend their disposable incomes on travel.
As destinations reopen for travel, I won’t be surprised if certain destinations simply target more affluent customers to achieve two goals. Firstly, fewer visitors would be less crowding at popular destinations. Secondly, wealthier people will spend more compared to other income segments.
What do you think about the democratization of travel? Do you think that travel will still be easily affordable and accessible for everyone in a post Covid-19 world? Tell us in the comments section.
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A wealthy couple might spend the same or maybe more than ten backpackers put together.
But they are also only consuming a 5th of the services.
What will happen to the other 80% of hotels, restaurants and tourism operators and staff who fill them?
After all a rich couple: They only need one hotel a night, One tour guide, only visit one restaurant a night, take one tucktuck to get home. Etc. When pre pandemic this would all be multipled by 5.
Every destination would vastly prefer a much lower number of rich tourists than a gigantic throng of penny pinchers. I don’t necessarily disagree with the desire but trying to actually pull it off is another story. Add in a short timeframe and a global pandemic and the odds become truly daunting.
As a side note, rich and wealthy are the same thing, so saying both, while fun, is kind of like saying giant huge.
Hi Christian,
Thanks for reading. If the economy cannot sustain itself on domestic travel, we could see such economies resort to targeting the rich. There’s also a conservation aspect to it. If the industry can pull off a good chunk of revenue with fewer visitors, they wouldn’t mind it from a conservation aspect as well. Think of city/countries which have a single airport and have a high % of GDP from tourism. Bigger domestic travel markets like the US, China and India will still be able to sustain due to their size and the increasing number of domestic travelers.
Btw, not that it matters much for the purpose of this post, but Robert Kiyosaki actually defines rich and wealthy differently.