COVID-19 has negatively impacted every sector of the global economy often resulting in job losses. With global travel restrictions only now easing and hotels reopening, the travel and tourism sector and consequently hospitality, are two of most affected sectors.
Based on the latest report issued by The World Tourism Organization (UNWTO) in May 2020, “Impact Assessment of the COVID-19 Outbreak on the International Tourism”, the COVID-19 pandemic has cut international tourist arrivals in the first quarter of 2020 to a fraction of what they were in 2019. International tourist arrivals dropped by 22 per cent in Q1 2020, potentially declining by 60-80 per cent for the whole year. This translates into a loss of 67 million international arrivals and about US$ 80 billion in receipts globally.
Based on the UNWTO report, the expected forecast for the overall international tourist arrivals for 2020 is projected to decline between 58 per cent to 78 per cent by year-end, assuming the lifting of travel restrictions and opening of borders by July and December 2020, respectively. This project’s a potential 100 million to 120 million direct tourism jobs at risk.
This places 2020 as the worst performance for international tourism since 1950 and puts an abrupt end to a 10-year period of sustained growth.
Based on the survey conducted by Colliers MENA Hotels team in April 2020, 79 per cent of hotel owners in the MENA region decided to partially or fully close their hotels due to low occupancy rates and 54 per cent of respondents expect the market to take about six to 12 months (from the start of recovery), for the hotel market to return to 2019 occupancy levels.
Even once the travel restrictions are lifted, the travellers will have to adopt to new “normal”, which will require COVID-19 testing, social distancing and many other ‘new normal’ practices and policies.
In this article, we highlight how the health and wellness sector can act as a catalyst to revive travel, tourism and hospitality sectors in the MENA (especially, UAE, Kingdom of Saudi Arabia (KSA), Egypt) region.
Introduction of health and wellness offerings are expected to not only revive travel, tourism and hospitality sectors but are also expected to provide sustainability to the sector by offering concepts identified in the report, which require both domestic and international tourists to stay from few weeks to months in hotels instead of few days.
Global Medical & Wellness Tourism Market
An important factor is to understand that wellness tourism is different from and larger than, medical tourism as presented below:
Global Tourism: US$ 5.3 trillion in size and 11.9 billion total trips
Global Medical Tourism: US$ 70 – US$ 80 billion in size and 14 – 16 million total patients/trips
Global Wellness Tourism: US$ 639 billion in size (projected to increase to US$ 919 billion by 2022) and 830 million total trips
Based on the latest available data, the Global Market Size reached US$4.22 trillion by 2017, representing a growth of 12.8 per cent from 2015-2017. To revive MENA travel, tourism and hospitality sectors, governments, private investors and operators will need to focus on beyond traditional medical tourism and spas and offer a wide range of services that encompass healthcare and wellness services highlighted below to achieve sustainable recovery and growth attracting local, regional and international tourists.
Back to basics
On 28 May 2020, UNWTO released a set of guidelines to help the tourism (and hospitality) sector to emerge stronger and more sustainably from COVID-19. The UNWTO guidelines highlight “the need to act decisively to restore confidence and, as UNWTO strengthens its partnership with Google, to embrace innovation and the digital transformation of global tourism.
“The guidelines provide both governments and businesses with a comprehensive set of measures designed to help them open tourism up again in a safe, seamless and responsible manner”.
Highlighting the importance of restoring the confidence of travellers through safety and security, the UNWTO protocols are designed to reduce risks in each step of the tourism value chain. These protocols include the “implementation of check procedures where appropriate, including temperature scans, testing, physical distancing, enhanced frequency of cleaning and the provision of hygiene kits for safer air travel, hospitality services or events”.
Based on an intimate experience in MENA, Colliers believes that provision of tertiary care healthcare facilities offering minimal care in case of emergencies will further boost the confidence of travellers to visit.
For main cities, such as Dubai, Abu Dhabi, Riyadh, Jeddah and Cairo, tour and hotel operators can affiliate with local hospitals that are known to provide good quality of care.
For resorts outside the main cities, similar to the coastal resorts in Egypt, Jordan, Oman, the UAE and more recently in KSA (Red Sea Project, Qiddiya Entertainment City and Amaala Red Sea Riviera) hotel operators may have to combine to provide the support facilities. This may take the form of shared capital cost to establish a suitable healthcare facility; as with hotel branding consideration could be given to healthcare brands that would enhance the attraction of the overall destination. Once established, to improve profitability, the facility would also serve the permanent catchment population alongside tourists and those owning holiday homes.
Another option for establishment of healthcare facilities could be Public-Private Partnership (PPP), where such facilities are considered as “public good” and governments provide regulatory and financial incentives to attract private investors and operators.
To make the tertiary care hospitals more profitable and hence attractive to investors and operators, other health and wellness “packages” could be offered as part of “tourism packages”. These have the additional positive impact on tourism and hospitality sectors as wellness tourists can often extend the length of stay.
Typical wellness packages would include beauty, cosmetic, weight loss, fitness/skills treatments, diet and nutrition, rehabilitation treatment (trauma, accident and mental health) and other health-driven wellness treatments.
Health and wellness sector can act as a catalyst to revive travel, tourism and hospitality sectors in the MENA region.
Introduction of health and wellness offerings are expected to not only revive travel, tourism and hospitality sectors but are also expected to provide sustainability to the sector by offering concepts identified above, which require both domestic and international tourists to stay from few weeks to months in hotels instead of few days.