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The future of the travel industry

05 Apr 2022
The future of the travel industry

For the past decade, Bangladesh has been a regional force in terms of growth managing to lift itself from the least-developed country category. This became possible for a number of drivers like the RMG sector, foreign remittances, etc. However, going forward, the need to diversify the economy is immense in order to sustain this growth. Strengthening other dormant sectors is a necessity more than a choice. With the natural beauty of the Sundarbans, one of the largest mangrove forests in the world, and Cox’s Bazar Sea Beach, the longest in the world, and many more, the country’s tourism industry bears huge potential for catering to local and foreign travelers big time 

Tourism’s contribution to the national economy:

The contribution of the travel and tourism sector has been on an upward path since the year 2000, even though there have been significant ups and downs. In 2019, the sector contributed 4.4 percent of the GDP.
The World Travel and Tourism Council (WTTC) predicts that by 2023 Bangladesh’s tourism sector will employ about 1.7 million workers, roughly 4.2 percent of the country’s workforce. The World Economic Forum (WEF) reported in 2019 that 97 percent of the tourists are of local origin, making Bangladesh an unpopular travel destination among foreigners.

However, the country's domestic travel spending saw a decline of 33.9 percent – from Tk 686.5 billion in 2019 to Tk 453.8 billion in 2020. Meanwhile, foreign tourist spending in Bangladesh dropped by 59.7 percent in 2020 – decreasing from Tk 30.3 billion in 2019 to just Tk 12.2 billion in 2020.

Underlying challenges:

Bangladesh is a challenging destination for travel enthusiasts due to the shortage of real-time information. Travelers are often not aware of much cheaper options of transportation and accommodation, ending up paying more than they should.

In renting hotels, tourists don’t have the scope to compare their requirements and the charging fees due to the lack of online presence of many hoteliers. In many cases, making phone calls is the only medium of communication, which is, ironically, responsible for most occurrences of miscommunication. Practically, the entire tour planning process is time-consuming and out of the control of the travelers, which are some of the key discouraging factors to travel in Bangladesh.

The COVID-19 pandemic has upended the global tourism industry through long periods of shutdown. Not only was international traveling at a halt, but the local supply-side was affected as well. Prolonged lockdowns drove away many small and medium tourism businesses from the market as they could not cope up with the new normal of taking activities online.

Food delivery, ride-sharing, and courier services flourished during the pandemic by taking their businesses online. This enabled the consumers to compare prices in a transparent manner and opt for the best option. Although lockdowns have been lifted in most tourist destinations, both abroad and local, there are certain COVID-19 restrictions put in place by the authorities.

There is a growing need among travelers to know about these restrictions and travel agencies could capitalize on this demand by providing necessary information online, raising their digital reputation. This is a good learning opportunity for the tourism industry that can help sustain it in times of shock.

Changes were present globally:

However, big global travel agencies envisioned the change quite a long ago. Travel giants like Airbnb, Trip.com, Booking.com, Expedia Travel, etc. digitized their services gradually and are now present online on the whole.

A report by market research firm eMarketer forecasted an 11.7 percent rise in worldwide digital travel sales by the year 2021, 3 years ago. Although the eMarketer forecast didn’t materialize, thanks to the pandemic, the global travel industry has changed radically since 2019.

The current online travel market size is near USD 450 billion which is estimated to go near the USD 700 billion mark by 2026, according to market research by Ireland-based market research agency Research and Markets.