Airlift and new tourism development
gavin eccles, Managing Partner, GE Consulting & Advisory, provides valuable insights on how destinations and airports need to be aligned with the new realities post-COVID.
The aviation sector is undergoing significant change, with a shift away from supply management and toward how to support demand development. Since the turn of the millennium, the growth of air services has been the backbone of tourism generation. Low-cost airlines from the US, Europe, and Asia have all collaborated with airports and tourism boards to support critical routes. Funds and incentives have been set up to help airlines decide on new routes, create demand, and ensure they have institutions and airports working with them to mitigate risk. Such incentives allow for the creation of partnerships and the belief that the airline and the destination/airport are working together to increase future demand. These kind of incentives can span three years or three seasons, and billions of dollars have been spent around the world to attract tourists. Will this be the case if the aviation industry is re-ignited? Is it still possible for airports and tourism boards to find the incentives needed to help airlines with their business cases and planning decisions?
Two sides of the same coin: The importance of connectivity is critical for any destination's vision. As a result, even the addition of even new route creates enormous trickle-down benefits. Destinations invest funds through incentives and their Tourist Boards and Chambers of Commerce to support the development of airlift, which in turn contribute to the government through tourism spend contributions. Hence, a strong route development scheme attracts tourists, and such spend is often greater than any incentive given to support the route.
So, for the past 20 years, we have seen many new routes that have brought a lot of tourism development to multiple countries and regions, and while we have seen significant growth in aviation, we have also seen a lot of new routes and tourism development. Prior to the COVID-19, both aviation and tourism sectors were witnessing tremendous success. It has never been clearer that aviation and tourism are working on the same side of the coin.
Road to recovery: It goes wihout saying that the aviation and global tourism industries have been on a sharp decline since February/ March 2020. The challenge is to stimulate travel demand. All airports and destinations will be considering how they will recover. Traffic for many airports will not get back to the levels of 2019 until the end of 2022 or early 2023.
it has never been clearer that aviation & tourism are working on the same side of the coin QUICK BYTE funds have been set up to help airlines decide on new routes