Sounding Off: State-industry alliances could be the best pandemic recovery route to take


McKinsey

“Governments have an opportunity to reimagine their roles in providing data infrastructure and capabilities to the tourism sector, and to investigate new and innovative operating models.”

Quote from consultancy company McKinsey in a story on PhocusWire this week on the government’s role in COVID-19 recovery.

Each Friday, PhocusWire dissects and debates an industry trend or new development covered on our site that week.

Unusual times call for unusual changes to how things are normally done.

There have been plenty of discussions over the course of the last six months that point to an opportunity for the travel industry to hit the reset button.

Whether it’s with the industry’s approach towards overtourism, shaking up hotel distribution or surviving as a startup, there is plenty of talk about using periods of inactivity or change to think in different ways.

McKinsey’s proposal for vast state intervention in the travel, tourism and hospitality sector is arguably the most ambitious idea yet. But it is not without merit, by any means.

One of the planet’s biggest, dynamic and most important businesses, contributing $9 trillion to the global economy, is set to struggle a prolonged period of time.

A vaccine is clearly one of the critical elements of the recovery jigsaw, yet it is unlikely to be implemented at the scale required to put the industry back on the footing of 2019.

Thus why the idea of governments, regional authorities and other public bodies getting involved in strategic decisions and running the infrastructure that could underpin a reemerging sector is one that should be considered.

Without that assistance, brands (lest we forget, in normal times, competing brands) are unlikely to collaborate to the extent that McKinsey proposes.

In other words: they might be reluctant to make the strategic investments in technology and ideas that benefit others at the same time, such as the “revenue-pooling” for hotels in a destination.

The reality is that the industry might not have much choice – it’ll need more than a handful of airline bailouts and stimulus packages that will expire over the course of the remaining four or so months of 2020.

An idea that puts data-centric planning tools, centralized coordination of recovery efforts and an understanding that the industry is greater than the sum of its parts, has to be an option.

Pessimists will note there are likely to be too many factors conspiring against such a fundamentally complicated and revolutionary set of proposals.

But if such ideas are ignored, there had been be some other ones on the table.

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