When thinking about tourism and travel, we commonly think of things like boarding planes to exotic destinations, and booking adventurous activities overseas. However, tourism has historically been much more local, with more than 7 out of every 10 tourism dollars spent domestically (World Travel & Tourism Council). In fact, in many parts of the world, spending on domestic tourism is an even more significant source of revenue than the money that comes from international travelers.
Embracing domestic and local tourism, when residents of a country travel within their country, is an important customer segment for tour and activity businesses to tap into to help stay afloat during and recover from, unexpected crises like the novel coronavirus pandemic. Domestic tourism has long been able to help cushion the effects of a crisis when international travel is strained, and we will see this historical trend continue in the aftermath of the current crisis. It’s more important than ever to take a deep dive into the nuances of your local market, shift your offerings to focus on domestic tourism, and set yourself up to capture this lucrative market segment.
History & Benefits of Domestic Tourism
There are fewer barriers to entry. The travel industry has long been driven by domestic tourism thanks to its ease (no passports or visas required), ability to boost the economy, and potential for new employment opportunities and cultural education. In terms of spending, there are only three regions in the world (the Caribbean, the Middle East, and Southeast Asia) in which international tourism spending makes up a larger portion than domestic spending. Everywhere else, domestic spending reigns supreme. Over 82% of spending is domestic in Latin America (World Travel & Tourism Council), and domestic travel in the U.S. grew by 1.7% in 2019 (U.S Travel and Tourism Association). This type of travel has important benefits and advantages that are essential in the midst of a global crisis.
Time of year is less important. International travel is often based around seasonality – meaning visitors plan trips during a specific time of year when travel to that location is most favorable – either because of the weather, or time off from commitments like work and school. A domestic traveler can pack up and leave for a long weekend much more easily than an international traveler, and in that way domestic tourism does not rely as heavily on seasonality. Steady domestic tourism creates a sense of stability for tour operators and others in the travel industry alike.
Traditional tourist locations are less relevant. Local or domestic tourists also tend to travel to places that are off the beaten path rather than key international tourist highlights, helping distribute the benefits of tourism more evenly throughout the country. Doing your part to promote domestic travel (more on this in a moment) ensures that revenue and other benefits of tourism are not concentrated in a handful of popular tourist destinations.
In times when foreign tourists are staying away, like during and following the coronavirus pandemic, domestic tourism is an ideal way to keep a destination going strong and support the local economy. Additionally, generating interest in tours and activities domestically helps position your location as a must-visit destination for international travelers since they can see that your operations have been running successfully among locals.
Domestic Tourism Following the Pandemic
Domestic tourism has already proven essential in sustaining and developing the travel industry, and we predict that it will play an even more important role as lockdowns and travel restrictions lift. As the number of new cases comes to a stable, low rate, governments may lift the lockdowns while keeping cautionary measures in place, such as requiring face masks in public. In this instance, domestic tourism is likely to be the first to pick up, and while it’s very hard to predict when the industry will get back on track, it’s never too early to start preparing for that time.
According to a recent survey by LuggageHero, more than half of Americans are still planning to travel between May and September of this year (2020) as long as their destinations of choice do not remain in quarantine, and 21% will choose domestic travel. People will likely stay close to home, opting to take road trips or enjoy staycations rather than cruising or flying. And due to the volatility of the economy, we may see people choose to take a long weekend rather than a classic two-week summer vacation. These may seem like small steps, but they’re steps in the right direction as we see travel and tourism make a comeback.
Another trend to watch associated with a rise in domestic tourism is an increase in online bookings. Online distribution platforms are likely to help operators get faster access to bookings, and a well-integrated distribution network could help make the recovery process smoother. As uncertainty is likely to remain present for weeks or even months beyond the end of lockdowns, being fully flexible on booking conditions should help bookings pick up faster.
Reach Domestic Tourists After the Coronavirus Outbreak
Hopefully we will see the demand for tours and activities skyrocket when people are allowed to leave their houses and have some much-needed fun. During this time, keep in mind that your typical customer base might look a little different as locals turn to nearby activities that they possibly hadn’t considered before.
If you usually target foreign visitors, think about ways to reach your domestic travelers through special discounts or creative tour offerings designed to take locals off the beaten path in their own hometown. Remember that appealing to domestic tourists could involve teaching them something new about a place they know well or taking a different approach to a popular destination or activity. When creating deals for customers, keep in mind that offering added value can prove more lucrative than lowering prices. For example, consider adding free transportation options or meal add-ons to your regular tours and activities.
You can also partner with other local businesses to boost the economy and create combo offerings to draw in locals – such as bike tour and brewery events, or food tour and wine tasting combination experiences. Keep cancellation policies flexible as uncertainty around the pandemic may remain for some time. If you’re able to offer insurance to allow people to make changes to their booking, do so.
Remember, we will travel again despite times being difficult. In the meantime, domestic tourism remains a viable way to boost the economy and get your tours and activities back up and running when lockdowns are lifted. If you’re looking for additional resources to help you weather the storm, check out our guide to small business loans and tips for communicating with your clients during and after coronavirus.