Uncertainty and volatility have become almost ever-present words when we talk about management in the 21st Century. A few days ago I revisited a paper that McKinsey Global Institute prepared in 2019 for the World Economic Forum, which pointed out an intensification of disruption, caused by the shift of the centre of gravity of the economy to the east, the changing patterns of globalisation through the growing importance of digital, the acceleration of technology and the ageing of the western population, which generate the polarisation of inequalities and pressure on the environment.

Tourism has grown practically uninterruptedly since the middle of the last century, driven by technological developments that have significantly lowered transport costs and created instruments that have brought travel supply and demand closer together, allowing tourism, more than an economic activity, to establish itself as a consumer good of growing importance and even a value of the society in which we live.

The pandemic caused by the SARS-CoV-2 virus has had a marked impact on certain sectors of economic activity and has almost paralysed global tourism, leading to a 75% reduction in international travel, setting the sector back 30 years, representing a loss of US$ 1.3 billion in exports and putting at risk more than 100 million direct jobs in the sector.

Looking back over the last 20 years, the tourism sector has been affected by major economic and social crises. The emergence of terrorist phenomena, beginning with 11 September 2001 and with repercussions in tourist areas all over the world, health crises such as SARS in 2003 or the economic and financial crisis of 2008/2009 constituted major challenges to the growth of the sector, but from which it quickly recovered.

Covid-19 had, however, a more significant, I would even say overwhelming impact, with a drop in demand 11 times greater than the crisis of 2008/9, as it affected two of the fundamental elements for the dynamics of the tourism sector - consumer confidence and the freedom of movement of people.

Uncertainty is, today, a permanent challenge for tourism sector agents. Uncertainty about the beginning of the recovery of the sector, about the time needed to restore the pre-pandemic levels and about the structural transformations that this health crisis will produce in the demand preferences, as well as the associated economic impacts.

In fact, the environment in which destinations and tourism companies take their strategic decisions today is unparalleled in recent history and can only be compared to the Second World War, when, as now, the world was facing other challenges of greater magnitude.

The Covid-19 pandemic acted as an accelerator for the transformation processes that were on the agenda of every entrepreneur in the sector as the next challenge to address.

From one moment to the next, the use of technology became indispensable in the relationship and contact with the customer and even in the provision of the service itself, as necessary conditions for the business to develop. Soon, virtual assistants, digital menus and other forms of contact with the customer became common practice in most tourism businesses.

On the other hand, consumer behaviour has changed, not only because of the restrictions imposed on them, but also because of changes in their behavioural patterns. The change in labour relations and the emergence of teleworking had long been described by organisations such as the World Economic Forum as factors with the potential to alter consumer habits and preferences. With Covid-19, this possibility was tested and in many cases successfully, and may accelerate the process of permanent adoption of new work methodologies, generating new forms of relationship of individuals with their jobs, with their usual environment and with their way of experiencing free time, enclosing opportunities for diversification of services by tourism businesses.

Finally, this will probably be the first crisis with economic impact in which sustainability has not left the agenda, a relevant sign that environmental concerns are relevant to the society in which we live and that producers and consumers will have to incorporate these principles and practices in the modes of production and consumption behaviour.

This scenario of continuous disruption brings with it significant challenges for leaders and their teams.

Firstly, the imperative of digital transformation, integrating technology into every aspect of the company's life, adjusting its business models, transforming its internal processes and improving its relationship with the customer. According to INE, in 2020, only 46.9% of the companies in the accommodation and catering sector in Portugal had a website, which illustrates the tremendous path to take in the digitalisation process that goes far beyond that.

On the other hand, in a context of a sharp reduction in decision-making time, the ability to efficiently use data in management and in value creation will be a powerful competitiveness factor that companies will not be able to do without in the near future.

Finally, the importance of innovation as a fundamental practice that provides organisations with the capacity and agility to introduce new products and services in a constantly changing environment, improving the experience of their clients, managing their resources more efficiently and maximising operational results, thus generating greater value for society.

Article published originally in Publituris Hotelariamagazine

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