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In the UK, a report by Airlines UK predicts long-haul and domestic routes will suffer the most in the next year, unless the government waives Air Passenger Duty (APD) for 12 months (one of the demands of TTG’s #SaveTravel campaign): the number of long-haul destinations served from the UK could still be down by 27% in July 2021, compared with July 2019, without government action.
In this environment, how should destinations approach airlines to give them the best chance of winning back key routes?
The ASM paper suggests that while destination leaders may have “limited influence” over airline decisions, they can manage their regions and marketing to maximise “the likelihood that air service will return, or even grow” after Covid-19.
The report acknowledges that destinations face a “daunting challenge” of adapting to a “fluid travel environment” and changing consumer travel desires and priorities.
Report author Lee Lipton, who is ASM’s senior vice-president, aviation strategy, says: “The key thing is to be organised as a destination and have a plan.”
Practical steps
ASM urges destinations to “refresh” their strategy on airline routes in the wake of the pandemic, noting trends such as consumers wanting to stay closer to home and anxieties about the health and safety measures in destinations.
In the current travel environment, destinations will have to work more closely with airlines, particularly in communicating changes, such as health and safety protocols.
Having knowledge of an airline’s network and strategic goals can also pay off.
“The more a destination can understand the world from the airline’s perspective, the easer it is to talk to that airline, and the more likely the destination is to present a business case that will see a positive outcome,” says Lipton.
Similarly, destination marketers need to “deepen” source market knowledge and should consider creating a taskforce, including local tourism businesses, to lead the recovery process.
Lipton says it is worth destinations having a “reflective moment” to consider whether all traditional source markets are likely to remain strong post-Covid. “Destinations may concentrate on traditional markets and that will be appropriate in many cases – Barbados, for example, has a very strong market and brand awareness in the UK,” he adds.
But destinations should “not be too ambitious” about the return of routes and frequencies to pre-Covid levels, says John Grant, chief analyst at aviation data firm OAG.
“Airlines will slowly rebuild,” he adds. “A daily service with a respectable load factor will build airline confidence rather than a sparsely occupied three-times daily operation.”
Incentivise and innovate
As the pandemic continues, destinations will have to become more creative and invest more to secure the return of key airline routes.
Lipton says incentive schemes for airlines will have to “support longer development periods”, and suggests destinations could work with hotels and restaurants to provide free rooms and meals to air crew as one way of cutting a carrier’s operating costs.
Airlines will be looking for ways to “de-risk” the cost of routes through partnerships with destinations, adds OAG’s Grant.
“They are looking for collaborative partnerships,” he says. “It may, in some cases, become an auction of airline capacity, but airlines need as much support as possible and building long-term recovery plans with airlines will be crucial.”
But it’s not just about directly supporting airlines. Destinations’ marketing efforts will also have to find eye-catching ways of attracting consumers to rebuild demand and confidence.
There are already signs of this happening with several destinations subsidising the cost of holidays (see panel, below).
Planning is very difficult for everybody in travel at the moment, but destinations still need to act decisively if they want to put themselves in the best potential position to win back key airlines and routes in 2021 and 2022, otherwise they risk losing out to better prepared competitors.
How some destinations are trying to revive their tourism industries
Canary Islands
The Tenerife Hoteliers Association (Ashotel) has taken the loss of flight capacity into its own hands by purchasing an Airbus A320 aircraft, which will be operated by One Airways. Flights are due to start for winter 2020/21 with both domestic and international routes under consideration.
Sicily
The Italian island has been running a €50 million campaign offering foreign tourists incentives such as paying half their airfare and for one-in-three hotel nights, as well as free entry to museums and archaeological sites.
Mexico
Resorts in Cancun are trying to tempt Brits back to the destination through its Come to Cancun 2×1 promotion with offers such as two free hotel nights for every two paid nights, or a free stay for two children when two adults book.
Japan
The Go To Travel initiative has been designed to stimulate domestic tourism by subsidising holidays by up to 50% for both day trips and multi-day breaks.
