Partner at GainingEdge, Rod Kamleshwaran, discusses the steps which have already been taken to boost the MICE sector's recovery, and raises the high probability that businesses have to find ways to press on even without the assurance of a vaccine
IATA reports that passenger numbers in 2020 will drop by 55 per cent, to 2006 levels, and may not recover to 2019 levels until 2024. STR predicts that USA hotel RevPar is unlikely to return to 2019 levels before 2023.
As the crisis is unprecedented and still evolving, the MICE recovery period remains uncertain but full recovery seems unlikely before 2024. The pace and level of the recovery will vary by region and segment. Recovery will be in stages. We can expect a long transition before the New Normal.
On July 30, UNWTO reported that 40 per cent of destinations have eased travel restrictions. On the same day, WHO issued guidelines for resuming travel saying travel bans cannot be indefinite.
We are now in a Transition Phase where economic activity is resuming in a world inclusive of Covid-19. This phase will last until widespread vaccination, probably not before 2022 when the New Normal without the virus begins.
The relates primarily to March through May after the Covid-19 pandemic was announced spurring a global lockdown. This led to the closure of borders and most economic activity. In many countries, non-essential activities ceased for up to four months.
Past crises were confined to smaller segments of the world. Not this time.
On April 6, WHO reported that 96 per cent of all worldwide destinations had introduced travel restrictions. IATA reported a 94 per cent drop in air traffic for April 2020. Venues across the world shut down with many converted into a quarantine centre, testing centre or temporary hospital.
June marked widescale relaxations in restrictions allowing domestic market activity in many countries. In the same month, some destinations began opening up to regional markets.
The reopening is not just of countries that have suppressed Covid-19 but also those with high active cases and so with the risks of second waves of infections and re-imposition of lockdowns.
Europe leads the opening with 41 nations, 20 in the Americas, 13 in Africa, 10 in Asia-Pacific, and three in the Middle East. Of the 87 countries to ease travel restrictions, four completely lifted all travel restrictions – Albania, Maldives, Serbia and Tanzania.
Meanwhile, 115 destinations including Australia, Canada and India continue to keep their borders completely closed.
For China and US, countries with strong domestic bases are leading the recovery pack with weekly hotel occupancies of up to 55 per cent and 48 per cent respectively in late July. STR is reporting other regions at barely 20 per cent.
MICE sector recovery is led by domestic events. Protocols include contactless registration, thermal scanning, face masks, elevated hygiene and social distancing. Social distancing is easier to handle with exhibitions than conferences. With the virus under control, China, South Korea, Taiwan, Hong Kong and Germany are leading the return of large-scale events with exhibitions.
Many events have turned to virtual or hybrid formats in the short term. The importance of digitisation and flexibility of venues has escalated. Multi-location events where in-person events in different regional locations connect online to form a larger global event are growing. This is appealing in the current phase as attendees lack confidence for travel and large gatherings.
Can the MICE industry do more in transition knowing the risks of second waves of infections and re-imposition of lockdowns?
The New Normal
This once-in-a-century pandemic has challenged us to completely re-evaluate how we think, live and work. It is having a dramatic impact on geopolitics, technology and social attitudes. Technology has proven fundamental to coping with this disruption.
There is a strong relationship between the unemployment rate and tourism. Hence, at some point, consumer behaviour will be dependent on economic, not health factors. After borders are wide open and consumer confidence in safe travel has returned, economics will influence demand.
There will be significant shifts in the MICE industry in the post-Covid-19 era. Some will be structural. Some will be temporary. Some are already in place.
In-person interaction remains powerful and unlikely to be replaced by virtual events in a dominant way. Most events will return as in-person events, but a high portion will be hybrid events.
Digital trends will accelerate. Consumer exhibitions will embrace virtual event formats more readily than trade exhibitions. Many meetings will not fully return to pre-Covid-19 levels.
Venue offers will include in-person, hybrid or virtual options with enhanced technology infrastructure and flexible rooms. Virtual tours for venues will be the norm. Virtual event software will improve at a rapid pace. New accreditations and quality standards on hygiene will be normal.
Solutions for crowd monitoring, electrostatic sprayers to disinfect surfaces in function rooms and public spaces, automated self-cleaning machines for escalators, and enhanced air filtration systems for ventilation will be promoted as safety features at many venues.
Venues will need to assess both â€śhardwareâ€ť and â€śsoftwareâ€ť readiness for this New Normal.
Even after a vaccine is found, it may take a year or more before worldwide vaccination and the confidence for mass travel returns. A consensus is emerging that the virus will be here for a while and the world has to figure out how to live with it.
Rod Kamleshwaran is a partner at GainingEdge, and leads the Convention & Exhibition Centre Development advisory team. His expertise is in the development and asset management of hospitality assets â€“ convention & exhibition centres, hotels, and casino integrated resorts. A specialist in mixed-use developments, Kamleshwaran has advised government and private sector clients on projects with a completion value exceeding US$20 billion.