The current novel coronavirus outbreak has resulted in major industries across China suffering heavy losses and instability, particularly in the tourism services industry. Many businesses have suspended operations and many employees have been laid off. For example, a domestic catering giant, Xibei, has more than 20,000 employees and a monthly wage payout of 156 million RMB. Their crisis abated after the Shanghai Pudong Development Bank gave them 430 million RMB in credit. Another example is the cruise ship Princess Diamond, which was once a ship that people yearned for. After experiencing dozens of cases of the new coronavirus infection, it refunded passengers in full and the parent company’s market value fell by 6.6 billion US dollars.

The tourism services industry has been completely disrupted in China and beyond. The threat of closing down is real for all parts of the tourism industry as its cash flow turns negative. The coronavirus epidemic has resulted in a new type of economy, called the “housing economy”, in which people are staying home and transferring the majority of consumption to online platforms. For example, logistics, takeaways, e-commerce and online education have experienced blowout growth. However, as tourism is a type of experience economy, the effect of the “housing economy” has been extremely cruel because the main activities of tourism cannot be transferred into our homes. Although some museums have launched programmes to provide online exhibition experiences, such as “Guobo invites you to the cloud exhibition” launched by the National Museum, such use of online tools is limited for the entire tourism industry, and do not meet the public’s real need for tourism. Therefore, the challenge for the tourism services industry is to evaluate the impacts of the “housing economy” and then formulate strategic deployment plans for a quick recovery after the epidemic.

Direct impacts of the “housing economy” for the tourism industry

▪ Suspension of tourism business for now and short-term growth after the epidemic

Due to the “housing economy”, the tourism services industry has been temporarily suspended. Some tourism SMEs might even be eliminated due to cash flow problems. This has triggered real anxiety among SMEs about their survival.

Many experts have pointed out that based on the tourism recovery figures after SARS in 2003, tourism might experience blowout growth when the epidemic ends.

This is because the public’s enthusiasm and demand for tourism will have been greatly suppressed during the epidemic and may surge after its end. If the current situation gets better and ends before May, the Golden Week holidays and the summer holidays will bring about a positive turnaround in tourism. However, the tourism services industry should be more cautious about such growth. Firstly, tourism growth after the epidemic might not be at such a large scale and might not last for long. The epidemic has completely changed the public’s attitude towards tourism consumption and preferences. Unlike SARS 17 years ago, tourists in the current era are much more sophisticated and rational. In addition, advanced information and communication technologies have enabled tourists to have much more choices. Therefore, after the epidemic, tourists’ decisions about tourism may make different product/service and geographical choices.

▪ Growing demands for healthy lifestyles and related products/services

After the virus outbreak, healthcare will become an important focus. Many people have started to reconsider their lifestyle and family relationships. Healthy diets, healthy lifestyles, sports activities, nature and related keywords will become popular in searches on online platforms. Under these circumstances, health tourism, fitness tourism, sports tourism and food tourism (particularly those promoting healthy diets) will be up and coming areas in tourism growth.

▪ Attention to family time and changes in family values

In the “housing economy”, people are spending more time with their family, and are starting to reflect on their family relationships and values. After the tourism industry recovers, the major type of tourism growth will come from family tourism. Accompanying elders, children-centred vacations, catered holidays for the nuclear family, and romantic trips by the husband and wife are examples of this type of tourism. Thus, tourism industry development should emphasise such functions.

▪ Reflections on man and nature

The epidemic has made people realise the importance of nature and the ecological system. The relationship between humans and nature is regularly discussed and reflected upon in the tourism industry. For example, eco-tourism, green tourism, and even ‘slow’ tourism which contributes to sustainable development, will have considerable growth. In addition, other relationships derived from the dynamics between humans and nature, such as the relationship between humans and others, and between individuals and society, will also be valued. Thus, social tourism, volunteer tourism and tourism that focuses on social values will greatly increase in the near future. The benefits of nature will surely arouse the public’s enjoyment for rural tourism as well. The combination of natural education and children-centred activities with rural nature will be suitable for the new market.

▪ Continued pursuit of outbound tourism and niche markets

In fact, before the epidemic crisis, the number of Chinese tourists in niche markets had already greatly increased over the past ten years. After the epidemic, Chinese tourists will continue to pursue niche market tourism activities. Tourists will be more diverse and willing to explore diversified tourist destinations and activities. For example, for outbound tourism, Chinese tourists will continue to explore emerging destinations around the world such as South America. In addition, some countries that have aided China during the coronavirus epidemic, such as Russia, Japan and the UK, will surely be favoured by Chinese tourists.

Suggestions on the recovery of the tourism industry

▪ Prepare for the restart of the tourism market

First, our epidemic is not completely over. Therefore, the tourism industry will face a period of stagnation. This requires that tourism enterprises need to be ready for a restart later. During the current period, tourism enterprises need to replan their strategic operations for the restart, such as consideration of adding new emerging markets, or new types of tourism activities, in order to meet emerging needs after the epidemic.

▪ Policy support and assistance from all parts of society

At such a difficult time, tourism enterprises need to seek help and assistance from the government, banks, and society, when necessary. Policy support should be direct and efficient with tax rebates, compensation funds, direct subsidies and so on.

▪ Improving safety and emergency measures

Tourism enterprises should put “safety” and “emergency measures” as their top priorities in the recovery. The tourist emergency support system needs to be comprehensively improved when the tourism industry completely recovers.

▪ Social responsibilities and rebranding

Corporate social responsibility should be core content when building the image of tourism. Enterprises should pay attention to the construction of social responsibility in all markets. The positive build-up of social responsibility develops a long-term and sustainable brand image for tourism enterprises. For example, initiated by Ningbo Culture/Communications and Tourism Bureau, 63 tourism attractions in Ningbo promised to give free access to any of China’s medical workers in 2020. Many people on social media have commented that they would like to visit the city after the epidemic ends. During the outbreak, some hotels have bravely stood up to provide free accommodation for medical staff fighting against the outbreak. These actions might not bring direct profits to enterprises and destinations, but they do become an important basis for building up positive and memorable images and brands.

▪ Put “culture” as a top priority

The restart of the tourism industry needs the support of “culture”. Products with intrinsic cultural significance and meaning will be the winners in the tourism market after the recovery. Tourists should not just leave and take home photos and souvenirs, but rather leave with special memories and deep reflections about cultural heritage, customs and culture, natural education, and even simple philosophies on people. These reflections can last for a long time and tourists will return again and again. “Culture” should not be forcibly added into products and services, but rather should be based on realism and creativity.

▪ Smart tourism with the help of technology

With the development of information technology, smart tourism should be developed. After the epidemic, tourism enterprises should make full use of the advantages of information and communications technology. The digitalisation of most tourism services will facilitate tourists’ information searches and accelerate their decision making processes. It will also help to accelerate the growth of new business models. For example, the Palace Museum and Tencent have developed on a small online application game, naming as “Touring the Imperial Palace”.

In conclusion, the epidemic has both advantages and disadvantages for the reconfiguration of the existing tourism services industry. Tourism enterprises should neither just focus on the misery of the situation right now, nor wait for the expected blowout growth without doing anything to prepare updated strategies. Tourism enterprises should be strategically developed for the recovery in order to achieve sustainable progress.