Apple Leisure Group’s executive chairman Alex Zozaya gave an overview of the challenges ahead in an interview with Miguel Calzada for CTN TV last week. He spoke from the perspective of the largest tourism company in the Dominican Republic. Under the ALG umbrella, AMResorts is the largest hotel operator in the country and its affiliate tour operator Apple Vacations is the largest serving both Dominican and Mexican market
During the interview, Zozaya addressed the issues in these Covid-19 times. “It will pass, it will take time, and we will make it,” he concludes. These are several of the key points he made:
• Forget Europe, the long flights will discourage travel, too much inter-European competition. Instead focus on North America. The US is the country’s main market. Expect Canadians to travel again in the winter.
• Business travel, and the meetings, conventions and incentives segment will be the most impacted. Meetings using technology are here to stay. According to WTTC, business spending is 8% of Dominican travel market.
• There are opportunities to capture market share that would have taken a cruise. He said the cruise ship segment will be the most affected and will take the longest to recover.
• Tropicalize, but don’t invent the wheel. He recommended adopting harmonized international hygiene and prevention protocols so that the customer knows what to expect in a travel experience. “What is affecting recovery is uncertainty. This can only be combatted with consistent information,” he says.
• Surveys show 72% of people want to travel again, there is much pent-up demand. And most people said they want to travel to beaches. Sounds encouraging, yet…. “I am realistic. One thing is that they want to travel and another is that they can afford to travel,” he says. The connectivity needs to be there and affordable fares.
• In a first phase of recovery, customers will be ranking countries by how they have dealt with the crisis, how prepared is the country for a new outbreak, what to expect in hospital care.
• Opportunities to reopen by regions and paired cities, establishing travel corridors or bubbles. “In the Dominican Republic it is important that we look outside the island. What are the pairs of cities in specific markets that we do business with, what alliances with airlines can be carried out to reopen flights and that they be profitable?”
• Health protocols need to be pragmatic, effective and cost effective for both companies and consumers. “No one is going to travel if they have to wait out a two-week quarantine,” he points out. There is the experience of Asia and how its travel recovered after the Sars virus. Technology was used to test people at airports without people noticing. Touchless technology needs to be widespread.
• Once a vaccination is out [expects it to be another year and a half], or an effective cure, then people will relax and protocols can be less strict. “Traffic will recover, but it will take time for travel to be affordable for all,” he says.
• Promotion is fundamental. There is a need to invest in marketing and promotion more than ever in history. “We need to grow the demand,” he says.
• Preclearance. He says that the US government’s approval for preclearance for the Punta Cana International Airline could be the country’s biggest competitive advantage. “Many countries would cut their veins to get the US government to authorize preclearance for them,” he says. “It is another filter, and helps.” Preclearance makes it possible for travelers to clear US Customs in the destination.
• New investments on hold. In February 2020, AMResorts had broken ground for the construction of two resorts in Miches. Zozaya says there will be many projects in the industry that will not take off for now.
• Reality check. It will cost more for hotels to reopen than to keep the hotels closed. Hotels that are closed still have to pay heavily for maintenance, security, operations and energy. Zozaya expects hotel chains that operate multiple properties in the country to start with partial openings. “All groups will go opening one of three hotels, three of six hotels, by clusters and phases,” he says.
• Bottom line: “The [travel] experience has to be very good.” The feedback of the first guests, regardless of whether they are Dominicans coming by land, has to be good and expectations need to be met for the virtuous circle to begin.
• Reality check. Hotels will need to offer outstanding deals. “Value for money will be important in the short term,” he says, especially for domestic tourism. The domestic traveler is especially important in the short term.
• Lower taxes, reinvest in promotion. Tourism companies are seeking fiscal incentives from the government to wade the August to December first phase of the recovery. “If these mechanisms are not there, the hotels will not reopen until November,” he says. Hotels could open for the domestic market in July, but then they would lose heavy in September and October. “There needs to be the stimulus to oil the machinery,” he says. He makes the point a large part of the pay of workers in the industry is pegged to sales and tips. The tax stimulus would make it possible to reemploy people.
• The role of the next President. In the Dominican Republic elections are scheduled for 5 July 2020. Zozaya says the next President has to become the face of the country and main promoter of the destination.
• Again, don’t reinvent the wheel. Urges the government to see what has worked and not start from zero. Says experience of other countries is that slogans and campaigns were not changed. Don’t disrupt what others have done because were carried out by a government of a different political party, he warns. “Build on what was done well.”
9 June 2020