EFTI: “Companies will no longer be managed solely in terms of economic impacts

How to cope with uncertainties, opportunities and trends in the post-pandemic era? Painting images with future-oriented scenarios and planning roadmaps for sustainable growth are inseparable from the most resilient organisations. That’s the motto of the European Tourism Futures Institute, a specialised centre in future research and destination planning for companies, leisure and tourism. We spoke to the Head of Department, Stefan Hartman (pictured below), about forward thinking scenarios and what the pandemic has laid bare for meetings and events.

What picture do you paint of the future of tourism and business travel in these first steps of recovery?

During the COVID-19 pandemic, we did a scenario study trying to understand what the key drivers of change were. At that time, we thought about the impact it would have on businesses, whether there would be a long-term recession and what consumers would do. So we created a framework with a business-as-usual scenario. On one hand, we had unusual businesses that were rethinking themselves with consumers behaving very differently. On the other hand, we had businesses with no major changes in consumer behavior, but pioneering sustainable actions. We saw that during the pandemic, some businesses remained stationary without major disruption and changes in thinking. Within the first two months, companies – particularly event companies – were already fading due to reckless investments, very small profit margins, sometimes with little financial capital. And the first companies that went bankrupt were event organisations. The mentality of going back to the old ways is still very dominant, because that is where the multi-year contracts, the business ties and the long-standing projects are. Even from the consumer’s point of view, the old routines still influence a lot of the decision-making.

So, what were the key takeways you drew from that study?

If you are heavily dependent on certain types of cash flow, you will be more exposed to threats in times of crisis. And if consumer behaviour were to change with fewer or no business trips at all, this could only lead to the "survival of the fittest". Which would therefore lead to a strategic decision to reorganise your focus, questioning all your routines, experience and modus operandi. In the “old normal”, these companies felt in control with endless streams of travel and the assumption that nothing bad could happen. Now, the question, especially for business travel, is how long it will be before we are back to business-as-usual. And this will be very different by sector and destination - while some are already returning to their normal speed others are still struggling immensely. We already see companies that are not going to wait any longer for recovery and are already looking for alternatives. Many companies had to diversify, transitioning to online formats or even to other segments within tourism; others feel undecided about returning to the old normal or embracing disruption. There will definitely be a massive return to business, but in the long run it will be more tied to trends and updates.

“Sooner or later, you will be faced with the question of what you are doing for us in your community.”

What trends and new behaviours will be adopted to revive activity around the MICE industry?

I think the most important one is the discrepancy in consumer behaviours. After these two years, many people will return to business travel intensively, but others will be more selective in their choices. Today, we see several examples of offline concepts being transposed to online-like webinars. Some larger companies recognise that digitalisation is an effective way forward and will try to diversify their services and outsource them. There are great examples of individuals who have started their own online event agencies capitalising on new business opportunities. They now can compete with larger convention centres because they replicate some smaller conferences with new online resources. Even many of these convention centres are creating in-house studios equipped with high-end technology to diversify their portfolio. Between the spectrum of people who want to travel and others who don’t, these new companies have to strengthen their delivery across the board. If you travel to a business event, the experience will need to be completely efficient from now on. Participants will come to value human interaction and the overall experience of the event more, as the outcomes of these actions can now be complemented by virtual meetings. Three years ago it seemed unrealistic to hold an online conference, but today it is part of the everyday life of organisations.

Do you think that the role of consumers could overlap that of citizens? Are we willing to make sacrifices to rebuild an events industry more in line with today's world?

We have to take a closer look at traveller behaviour in this post-pandemic period. The hotels are sold out, the airplanes are full again and the destinations have become overcrowded just a year after the vaccination started. Consumers also demonstrate a need or desire to get back to business as usual. We need to meet again and this somehow goes against the idea of building back better. I always thought the post-pandemic drop in travel was a myth. If we don't change consumer behaviour and the way the industry works, we will be back to seeing over-tourism in the blink of an eye. This will no longer be tolerated by citizens − in Amsterdam, for example, over 30000 citizens used a public petition to ask for a maximum number of tourists per year. The same thing will happen to convention centres, because it will be quite difficult to accept events that do not comply with CSR regulations from a government point of view. A convention centre of the future will be more strategic in matching its events with the local business profile. This impact will be within reach of civil society that has become more discerning and demanding.

“There will definitely be a massive return to business, but in the long run it will be more tied to trends and updates.”

Did sustainability have a real weight in changing mentalities here?

It’s in line with sustainability but it’s more of a liability issue, as the industry will have to take greater responsibility for the city and its inhabitants. Companies will no longer be managed solely in terms of economic impacts, as social and environmental impacts will now have a greater say. This is a totally different proposition from what we have seen before − changing the perspective of impact. It is a matter of time, it seems to me, before we welcome a public perspective on regulation that specifies and reorganises the way we admit and bid for events. We will see differences there in where the industry is regulated and perhaps this will create a geographical shift towards larger events. The Netherlands does not host the Olympic Games because of its regulations for example, since the concepts of impact and investment are intertwined. This frame also influences the image of a destination. When people start questioning this need, the logic behind the events industry will also change. Destinations that intervene earlier will be better prepared and have a greater advantage. This will perhaps change the very model of cities, neighbourhoods and urban reforms, as it will be in everyone’s interest to follow a common path with government legislation.

How do you see strategic urban planning and tourism destination governance based on data management?

The data-driven policies used today are not good enough. Most destinations only position themselves in tourism around number of visitors and direct impacts. A company can be at the forefront of decision-making by obtaining as much information as possible about direct and indirect impacts, even before governments enact a series of regulations. I see there’s a need for data, but especially economic data − a new layer of profit margins, expenses, etc. I’m involved in some data projects where we monitor businesses, visitors and residents collecting elements about the added value and citizens’ perspective on the visitor’s economy. Looking at the results, I conclude that there are great discussions about balance of interests, tourism spillover, community management policies − something like the “doughnut economics”, an alternative business model focused on balancing the needs of people and the planet far beyond mere implementation of GDP. Data offers a different way of looking at performance targets by taking into account the industry’s contribution within the place where it operates. Sooner or later, you will be faced with the question of what you are doing for us in your community.