Sergio Cagol: We are not in an on/off situation
Echoes of the Journey: Hello Sergio. Please tell us a little bit about your work, expertise and your current activities.
Sergio Cagol: First of all, thank you for inviting me and for having me here. I am a technician, I studied engineering but I moved to tourism and communications more than 15 years ago. Nowadays, I mainly work with destinations and hotels, helping them to use technology and communication to stay in the market. From my personal concern and belief about the climate crisis, in the last several years I’ve dedicated my work to transition to a more sustainable management and development of tourism, which is now my main area of interest.
EJ: We are currently in the middle of an unprecedented global crisis. How should tour operators and hotels act now?
SC: This question is difficult to answer because, as you mentioned, we are in the middle of something which hasn’t happened before so nobody can be really sure what to do now. At the same time, nobody knows how things are going to change and what is going to happen in the next few weeks or months.
I believe now is the right time to plan for the future, preferably long-term, since it is hard to predict what will happen in May, let alone this summer. We are not in an on/off situation – it did appear in four or five days but it will be a slow and long process to disappear. Therefore, tour operators and hotels can start thinking about the 2020/21 season now and afterwards make short-term decisions.
The best way to use the time now, in my opinion, is to try to reorganize themselves and to learn something from this crisis. Another idea is to communicate with their clients but not trying to sell anything, it is absolutely not a moment to sell. I still receive newsletters from some hotels which offer discounts or try to persuade me to book. That is wrong. The best idea is just to be in touch, tell people what you are doing, how you confront the crisis and that you are ready to welcome them once the crisis is over.
EJ: We have seen examples from hotels in Milan and Florence about the initiatives to diminish dependence on OTA in their sales, some even suggesting complete shut-down for these channels for the rest of 2020. How do you see these ideas and which changes do you observe in the future?
SC: The problem with Italy, at least, is that there are only a few big players and lots of small family-run hotels. There is no cohesion and no connection among them. OTAs have always been in a situation to manage the rules on the market, and my personal opinion is that it is not going to change significantly once this situation ends.
As soon as the tourists begin to move, hotels will be in a big crisis and will try to find everything possible to start working again and using OTA, like Booking.com for example, will be the easiest and the fastest solution. These companies will probably be better prepared and organized than individual hotels, and I’m sure that Booking.com will manage this crisis better than accommodation providers and will come out with some solution.
Airbnb, for example, is already preparing funds to support hosts to go through this crisis which is more than hotel associations are doing at the moment. The point is that big online channels like Expedia, Booking, Skyscanner, Airbnb and so on, are in position to do a lot more than a single hotel.
This initiative from Milan has more than 200 hotels so far, but for Booking.com this is nothing. Unfortunately, but it is the reality, for them this number is nothing. I really do hope that hotels will start working together and will try to find joint solutions, but as soon as the market starts to function again, I’m afraid they will look for OTAs as the most efficient and easiest solution.
At the same time, I would not be surprised if it gets even worse in terms of dependence on OTA for distribution.
EJ: Do you have any good examples from Trentino Alto-Adige with respect to the response to the current situation?
SC: A good example can be “Pineta hotel”. They decided to shut down before the emergency was declared as a result of the fact that many people from Lombardy and Veneto decided to come skiing when the virus occurred in their regions.
At the beginning of epidemia, when we still were not sure how the virus was spreading and how many people were affected, various hotels and destinations were inviting people from other regions to come skiing in Trentino Alto-Adige. “You are home because your children are at home”, they used to say, “come skiing while the schools are closed”. As a consequence of these movements, our region was heavily hit by COVID19, with some villages having up to 5% of population infected.
When the next season comes, will people remember this? Would tourists choose other destinations due to this situation? We cannot know now. That is why the aforementioned hotel is a good example, because they decided to close for health reasons and for the good of everyone, nonetheless one decision like this is difficult for an entrepreneur.
EJ: Italian government has proposed a series of measures to help the tourism and cultural sector. Some associations have already stated that this will not be enough and that the State needs to do more. What do you think about these plans? Will they be sufficient?
SC: They have done one really important thing in the beginning, when the situation started to get serious – they made it possible for the hotels to maintain the employees without a need to dismiss them while the same employees continue to receive payment (Cassa integrazione). This solution was good for the start but it was not enough.
Tourism is an important sector in Italy, it contributes to 13% of total GDP – when visitors come they do not stay only in hotels, they go to restaurants, do shopping, rent bikes or cars, etc. Plus, Italy receives high numbers of arrivals from abroad which have important economic value. We are probably one of the few countries in the world which do not have a Ministry for tourism while tourism is having such a significant place in the national GDP at the same time. Because of this, we need more actions. First steps are good but they are not enough.
EJ: Fiscal incentives to travel within Italy are mentioned as well, to incentivize Italians to spend vacations within a country and not abroad.
SC: Yes, this is something the tourism sector is asking the government, and it is fine as well, but not enough. I believe that this year people in general will probably travel to places closer to their homes due to the fear of a new virus burst out. Staycation is an expected decision when people are not sure about the health situation in other countries.
Moreover, we need to take into consideration two facts: firstly, people are not working, companies are closed so financial issues are present. Secondly, many people are taking holidays now since children do not go to school, so the question is will they have enough time later during the year to travel?
Generally, when conditions are “normal”, in Italy, many companies are closed during the summer, especially during August, so it is time for holidays and traveling. Will these companies close as well this year after being closed for two months or so in March and April? To answer this we need to wait and see how the situation develops. Whatever the outcome is, it will not come fast.
EJ: Which actions do you foresee for the renaissance of the Italian tourism once the pandemia is over?
SC: As I said before, we are not in an on/off situation so we cannot expect that at the end of May we are just informed that lock-down is over and everything is coming back to normal. Furthermore, the end of quarantine is not going to happen at the same time in all countries. We do not know when the USA or Germany will open their borders for example, and both of these countries are important foreign markets for Italy. Pandemia did not start at the same time in all countries and the situation is getting worse right now in the UK and the USA.
Therefore, I don’t see it easy as it will be a long period for coming back from the crisis. This year will probably be the year to survive and maybe think of strategies for the future. Some people say that ENIT (the Italian national tourism marketing agency) should start campaigns abroad and promote the country.
How should this campaign be developed? There is a huge problem in Italy regarding competition, since regions promote themselves individually instead of working together with a joint effort. Lombardy, Veneto, Trentino Alto-Adige or Sicily, they all have their own management, their own funds and promotion.
Probably during this year the question will not be why should a traveler choose Italy instead of Spain or Turkey, but if they are going to travel at all. For some, local tourist arrivals will save the situation until some point, but it is not a solution for everyone. Just think about the luxurious hotels in Italy, will they be able to sell their service to the Italians? Or destinations which rely strongly on international demand, like Garda lake. It is difficult to imagine that Italian tourists will easily substitute almost 20 millions of overnight stays by foreigners.
EJ: Do you envision any major change on the demand side? Do you see any particular type of destination or experience which could benefit after this situation?
SC: I expect two situations to happen. The first are shorter trips to closer destinations, in a risk-free environment, with lower budget for vacation and last minute solutions. This is a short-term scenario in which some aspects related to tourism will become less important and probably sustainability is going to be one of those. People will simply not prioritize it.
In the long-term, on the other hand, I do expect that people will connect the current situation with our behavior in the last 20 or 30 years and how our approach to life has impacted the environment, climate and planet in general. For this reason, I do believe that next year sustainable tourism will have a fresh restart and will become even more important.
At the same time, those who have started with sustainable experiences in the past will finally start to grow as a business, and this kind of offer may be a solution for the crisis in the future. Who has invested in the sustainable development of the tourism sector will finally become successful.
On the side of the demand, I expect that travelers will pay more attention to the places where they actually spend time, looking for less crowded locations and avoiding places where they are not able to “manage” the situation. Outdoor and nature experience in general should see an increase in demand, places out of the typical itineraries, without big hotel complex.
EJ: You said that sustainability probably will not be a priority for travelers or the sector in general in the short-term, but do you see this topic becoming one of the highlights in tourism management in the upcoming years?
SC: I strongly believe that even next winter sustainability will become a strong aspect in traveling and priority for businesses. As the offer is changing, so does the demand, so I expect as well the rise of demand for this kind of experience. For sure there will be attempts to do greenwashing, but I am confident that people will understand and recognize when this is the case.
Travelers will not expect that Venice becomes sustainable, it will always be crowded since there is only one Venice in the world, but people will stop going there if they do not want crowded cities.
EJ: You made a good introduction for our next question – do you see a possibility for places like Venice to change and reinvent themselves as a destination after this crisis?
SC: Tourism is a fragile sector, it is disrupted easily. Whether is it terrorism in Egypt, Turkey or Tunisia, or a health situation like the one we have now, you quickly go from something which can be described as “overtourism” to no presence at all. Sometimes the effect is local but sometimes, like now, it is global. Tourism flows are not easy to manage.
Quite often, tourism is managed by public bodies and Government, not only in Italy, and frequently lacks competences. Venice has a problem with numbers only because it was never managed well as a destination. It was always run with the idea that the more people come the better, and more income will arrive to the city.
My only hope for Venice is that the market will change. I can imagine less cruises coming there but only because the market will change and people will not look for trips with five thousand other travelers on the same cruise ship. I do not see this change as a result of destination management.
However, we currently do not know how the sector will be organized after the crisis and I cannot be sure that it will be organized better. In critical situations sometimes only the big players survive. Who knows if this time it will be like this and the big players take even bigger market share.
EJ: Trentino Alto-Adige has been recognized for its sustainable approach towards tourism development. Which lessons can other parts of Italy learn from the region and replicate them in their own tourism management?
SC: It is true that the sustainable approach here has been recognized widely. It is not perfect, but compared with other parts of Italy or other European regions, the situation here is very good. We are fortunate enough to have a versatile landscape, there are mountains, forests, lakes, and we are lucky to have the knowledge to protect it accordingly. There are many parks which protect the environment and many hotels were built responsibly with the intention not to damage the landscape.
We have understood that our landscape is the highest value we have for our visitors and we cannot afford to put it in danger. Previously there was no control over the numbers of ski slopes or mountains used for skiing. Over the years, the model has been changed to use less space. This way, less mountains are affected, there are less ski slopes and as a result of a good organization more skiers are coming.
Another thing that we have managed to accomplish here is that, even though the majority of the hotels are small and not part of hotel chains, the preparation, knowledge and quality of the service provided are quite good. People invest and prepare well for tourism since they have a vision where they want to arrive with their business in 10 or 20 years. This is as well supported by the region with education and training about important topics in the tourism sector.
EJ: What are some of the challenges for the tourism sector in Trentino Alto-Adige?
SC: The region is recognized as a skiing destination primarily and it is hard to guess how next Christmas season is going to go. Italy was the first country in Europe to be hit by the virus so we are seen by travelers as a risky destination. Do tourists want to come skiing and stay in line waiting for a ski lift if there is still fear about the virus?
We depend a lot on the winter season and skiing, and from my point of view, we need to start to decrease this dependence as this activity asks for a lot of resources and it impacts sustainability. In some parts of Lombardy, Friuli and Piedmont problems with snow are already present, in Trentino Alto-Adige not so much, but in 15 or 20 years will be highly visible. Climate change makes a strong impact and trying to maintain needed levels of snow is too expensive. Maybe this virus will speed up this shift, but we still do not have evidence on that.