The Indian tourism industry finds itself in the eye of a storm. The tourism story that once boasted of soaring booking volumes, large conferences and events, sold-out venues, celebrity speakers and double-digit growth has witnessed a total collapse. The reality now is one of low occupancy, reluctant travellers, limited spending, varying state health protocols and a decline in events. And, it is this last aspect that has the travel trade extremely worried.
Events have been the core driver of corporate travel in the last decade. Ranging from conferences to rewards programmes, the fundamentals have been the same. Specifically, travel paid by the office to appealing destinations—and travel, which for the most part, people were very happy to undertake. As corporate events grew, companies specialized in event-based travel. Profits for the travel trade rose. Entire venues were constructed with a sole focus on corporate events and there was no looking back. Because, until now, when it came to the office-goers and corporate events, there were only two options. Namely: to attend or to decline. Very few declined. That has now changed. A third option has now come into play—‘phygital’ events.
The term phygital found its way into the lexicon during the coronavirus pandemic and refers to events that are both physical and digital. A phygital event is a live event that is streamed online or recorded and shared. As such, it gives one a chance to attend remotely and derive benefits similar to attending in person. An option that was simply not available in the past.
On how successful phygital events are or can be, there are arguments on both ends. One side claims that physical presence can never be replaced by remote interaction while the other side claims that the benefit and costs of attending remotely far outweigh the benefits of physical presence. But what is undisputable is that phygital is here to stay and will be the way forward.
For the travel industry though, this poses a huge challenge. Corporate travel benefitted from these events and this was a segment that was highly profitable and growing. Further, corporate budgets compared to individual budgets tended to be higher and thus provided better volumes and margins for travel providers. These very margins are now impacted—both by lower volumes and also compressed margins. Moreover, the destinations that were conducive to live events invested in the set-up over the years and many do not have the same infrastructure that is demanded for digital events. Which means that overall, they lose out.
And if that wasn’t bad enough, there is also now the fear of the COVID infection, which is leading to office-goers showing reluctance to travel. As a result, events that were once sought-after by senior management have few enthusiasts. Consequently, there are fewer networking opportunities, less pressure to attend, and lower attendance. And, this further impacts the travel trade as the more senior clientele demanded higher levels of service and also became a magnet for more people.
Industry veterans point to the fact that the phygital trend is here to stay. As the pandemic has led to an exponential growth in digital interactions, people are now much more comfortable with platforms like Zoom, Microsoft Teams and the likes. Phygital events are also logistically much easier and loved by finance departments as the associated spends are a fraction of the in-person meetings. Finally, they open up the event to a much larger audience and as such make for a more global reach.
Post-pandemic, events will no doubt come back and corporate travel will pick up, but not in the shape and form as before. Because in the grand scheme of things, where one weighs convenience, costs and consequences, phygital has opened up a third option. An option to attend without being there. An option that gives you all the talking points without any of the hassle. An option that until now was simply not available.
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