At Dexibit, we recognize the personal impact of COVID-19 on tens of thousands globally. We hope this article sheds light on its effects for attractions operators, including how to keep staff and visitors safe. Figures referenced below are correct at the time of writing (2 March 2020).
The visitor attractions vertical is experiencing growing economic impact from Coronavirus. Initially, this was isolated to venues shuttering in mainland China then Hong Kong, including the cancellation of Art Basel Asia, which saw nearly 90,000 visitors last year. Then came the impacts to venues dependent on Chinese tourism – at Dexibit, our clients impacted by these trends are finding attributable declines of between 4 and 16% depending on their proximity to Asia and for some countries, a double hit of not only tourists but returning international students returning after Lunar New Year missing from their visitorship.
With attractions globally facing uncertainty in the coming months, this article explores industry updates, suggestions on pivoting your marketing and operational strategies in the short term and methods for being able to simulate the effects of this and events like it in the future.
The global impacts of COVID-19 on attractions
Close to the epicenter of the virus stronghold in China, visitor attractions began closing their doors back in January. Forecasting potential economic losses of $175 million and a month after closing its resorts in Shanghai and Hong Kong, Disney shut the doors in Tokyo, a move echoed by Universal Studios Japan and Legoland Japan as the government ordered museums to close. Amongst a sea of shuttered entrances, Hong Kong Maritime Museum decided to stay open, only to be hit by collapsing visitorship anyhow – after 8,000 visitors this time last year, this February the museum hosted only 600.
Now, the international impact on cultural institutions and commercial attractions alike has entered a new phase, with international tourists, not just Chinese travellers, deciding to stay away – especially in virus hotspots where foreign governments are issuing travel warnings to their citizens. With Italy clocking 1,694 cases, the city of Venice is down 70% in international visitors to the tune of 800 million Euro, resulting in a ghostly feel for usually crowded iconic spots such as St Mark’s Square. Governments around the world are also issuing warnings against public gatherings, resulting in closures outside of Asia due to a growing domestic threat from the spreading disease. In France for example, where the government has banned gatherings of more than 5,000 people, the Louvre decided to close to protect visitors and staff given it easily sees a magnitude of that in a day.
There’s also the second tier of impact to revenue in visitor attractions – merchandise. For many venues sourcing souvenirs and other products from Chinese manufacturers, supply chain limitations are reducing revenue opportunity through emptying inventories – or at least, lower margins if alternate sourcing can be secured.
While the world waits to see if these measures will curtail the outbreak, the question on everyone’s minds in the industry is: how bad it will get? Spring break and Easter periods are on their way, typically a bumper time for many, followed by the summer high season in the northern hemisphere. At this stage, it’s hard to pick how steep the fall will be to international and domestic tourism, potentially to local entertainment markets and ultimately to forced shutdowns and predict how long it will last, then how hard it will be to rebound.
Revisiting your plans for 2020
This question has hit the industry right on budget planning season for most, throwing FY21 planning into uncertainty. One way to quickly ascertain how impactful the situation is for your venue right now is to look at your weekly year on year growth metric, to see if the trend on this number has started to decline (or if it was already heading downhill in January, whether it is declining faster). Many industry analysts are referring back to data from 2001 (terrorism) and 2008 (recession) to gauge how significant this event could be, while strategic leaders work to shape what various futures could look like by simulating different scenarios.
For example, this can mean looking at the level of all tourists, international tourists then Chinese tourists as a percentage of your venue’s visitorship (a call to action if you’re not already collecting zip codes and visitor origin on tickets, memberships or other means such as surveys or WiFi captive portal screens). Year on year in recent times, have these levels been increasing – were these growth trends an assumed contributor to your growth outlook? Within these, has a decline been felt in recent times – has the impact of Coronavirus already taken hold? What if individual elements that your forecast is dependent on are cancelled, such as nearby local events or a cruise ship docking – will this impact your numbers?
Through analyzing past data to understand visitors whose decision to come will be impacted, various outlooks can be simulated and expectations adjusted for an uncertain future. When using machine learning for predictions, the model’s output should be carefully observed as it starts noticing immediate trends and relying on recent over longer term historic performance, or as the almanac of what’s on in and around your venue changes due to cancellations onsite or elsewhere, helping your team to recalibrate and respond in a more agile fashion. This is where a hybrid approach bringing together machine learning and informed insight helps navigate unknowns while the world enters into an uncertain future. Forecast byproducts such as event uplift analysis (a comparison of forecast to actual during an event season compared to business as usual) can also provide insights on the difference between forecasts and actuals to help you track unanticipated influences.
Pivoting your marketing and operational strategies
In the interim, additional insights can spur decisions to pivot marketing strategy and operational actions to help make visitors more comfortable.
The low hanging fruit here is to redirect marketing budgets targeting travellers towards a local audience. Venues with a strong local membership or season pass holders will benefit from an easier channel with which to achieve this. Marketing messaging may change more to ‘staycation’, given all those locals in your city won’t be going anywhere on their holidays either, yet should still feel safer at home to explore entertainment options – needing careful attribution tracking to ensure effectiveness. Another option is to hit the pause button on advertising spend, or at least draw back and save it for later. If your venue is already experiencing considerable impacts, visitor acquisition costs will be rising sharply and may be better spent to hit a greater high once concerns ease and the market rebounds. All those tourists will probably still take their holidays, just later in the year – and it may be more effective to have the extra budget on hand to hit advertising channels harder when the time comes. Offers and discounts will also have a bigger part to play in 2020 to more aggressively recover attendance and spend where possible, throughout the rising Coronavirus concerns and after the fact.
For those with advance pass offerings, especially prepaid scheduled tickets, consider allowing guests to reschedule and issuing communications and invitations to do so (either free of charge or for a fee). This will serve multiple purposes – if your venue operates at capacity, this will free up short term inventory to be resold to avoid the lost opportunity of visitor spend from no shows, while building a trusted relationship with guests.
Clear communication to visitors while your venue remains open (such as a public statement on web and social, linked on the ‘visit’ pages of your website) will avoid any confusion if they are seeing press about other venues closing. For those guests who do make it onsite with you during this period, pay particular attention to engagement metrics such as dwell times, conversion rates and sentiment analysis to understand how visitors are faring. Special tactics such as hand sanitizers at touch points such as cafes or extra hygiene procedures and cleaning schedule transparency in restrooms serve double time to keep visitors healthy and happy in public places. Given the origin of Coronavirus in China causing instances elsewhere of discriminatory behavior by the public, visitor services staff should be briefed on how to spot and handle antisocial guest behavior, such as this commendable example by MOTAT.
Over the past few years, the visitor attractions sector has begun transforming from gut feel to insight inspired, making challenging situations such as Coronavirus easier to navigate. Since similar global economic impacts last decade, the industry is far better positioned in 2020 to tackle this uncertain future and to set the standard for handling similar international macro economic events in future.
The Global Association for the Attractions Industry (IAAPA) has pulled together a comprehensive resource center on Coronavirus at https://www.iaapa.org/iaapa-member-resources-coronavirus.