Changes to industry structure and customs needs offer an opportunity for those who embrace change and prepare now, says trivago chief executive Axel Hefer
Society is facing unprecedented challenges, yet we need to look ahead to the recovery period and how best to serve our customers and leverage opportunities that may open up. The COVID-19 crisis is different from anything we’ve seen before. Never has an industry come to a complete halt within a few weeks and it would be naïve to assume the world will go back to normal, or the normal we were once accustomed to, anytime soon. Travel behaviour and patterns will change and the severity of the crisis will force many travel companies out of business. The change in industry structure and changing customer needs are at the same time a big opportunity for those embracing the change and preparing for the new normal now.
At trivago, once we acknowledged this and ended paralysis, we allowed ourselves to look forward by asking what the customer will want from the travel industry in the future. And with this perspective, trivago has identified key areas it is focusing on to best weather COVID-19 and emerge ready to conduct business once it is over.
Accept that nobody should travel for now:
Until the first wave of infections are under control nobody should travel and as an industry, we need to accept the consequences this has on the travel business. You might have neither customers nor revenues for quite some time. We have communicated early to our customers that they should refrain from travelling and stopped marketing wherever possible.
Stating the obvious – minimize your expenses and keep your liquidity. Anything that is not critical should be reduced to the absolute minimum. Secure any additional financing you can obtain. It is crucial to prepare for a long time of no, or very low, travel activity and ensure that you have the financial means to restart once things gradually recover.
Prepare for the recovery:
What will the customer need once things are improving? What are the first trips they will want to make once they feel safe to do so? It is important to picture the customer in this future moment. It gives your business focus and allows you to zone in on something you can control. You need to make sure that your offering is adapted to the changed reality, and not just your product offering, your communication strategy might need adapting. We need to use this lock-down time to prepare and adjust. As an example, we believe that regional, short trips will become much more important for quite some time. Individual and regional offers will become much more attractive and feel more secure than international and group travel.
We are facing a lot of uncertainty right now. How long is the lock-down going to last? When will travel restrictions be lifted? Will there be a second wave of infections leading to lock-downs again? How much government support will be given? All these things are uncertain and new information is coming in daily. To support your organisation, it is important to picture a realistic future as it provides alignment and distracts from the depressing present. As things are changing, you need to constantly adapt and pivot your hypothesis. Stay open minded and don’t fall into the trap of wishful thinking, everything is possible as there is no precedent for this situation and even the most capable politicians will follow a trial-and-error approach to a certain extent.
Look at the opportunity:
Despite all the challenges that are ahead of us, the crisis is also offering a big opportunity to the industry. We are facing a complete reset – everything will restart, customers have to be convinced and won again and those who meet their needs best will strengthen their position in the industry considerably. Fundamental challenges such as how to handle sustainability in travel can be thought through during the months to come to restart as a stronger and better business.