The tourism sector, recognized as one of the most dynamic industries, is also highly vulnerable to economic, political, and social shifts. It faces an ongoing challenge – the fragility of destinations during periods of crisis.
This article originally appeared on Horwath HTL.
Destinations that adopt a strategic and diversified approach achieve greater resilience and maintain their competitiveness even in adverse scenarios. The key lies in building a “mix” that integrates various attractions and capabilities, reducing dependence on variables such as price, specific events, passing trends, or niche markets.
For example, Buenos Aires City has established a heterogeneous mosaic of cultural, gastronomic, historical, and international event attractions, such as the Book Fair and renowned concerts, complemented by a vibrant nightlife, solid infrastructure, and diverse culinary offerings. This balance allows the city to attract different segments: cultural tourists, business travelers, families, and young people.
Diversity builds resilience
During times of crisis, this diversity acts as a buffer, as the destination’s resilience does not rely on a single component but on a complementary set of attributes. Conversely, destinations that depend solely on unique elements—such as festivals, short seasons, or limited experiences—face a higher risk. When market conditions change or these components fail, the decline can be sudden, and the recovery much slower.
Recent hotel occupancy statistics from various destinations across Argentina vividly illustrate these observations:
Fuente: EOH, Indec, all categories
What about the categories of tourism products?
Within the sector’s offering, various tourism products are typically classified from high-end (high-end) to economy segments. High-end products, thanks to their elevated rates, which maintain profit margins even in challenging times, along with midscale offerings that operate with lean cost structures and focus on operational efficiency, tend to remain more stable. Conversely, the more economical or niche-specific categories are the most vulnerable, facing greater challenges to survive during periods of low demand.
Leveraging boom periods for strategic planning
The period of prosperity in the tourism sector presents a prime opportunity to define and strengthen that strategic “mix.” Investment in infrastructure, staff training, and diversification of the offer facilitate the transition from dependence to resilience. The goal is to create attributes that make the destination attractive in varying circumstances and for different tourist profiles, thereby consolidating its competitive position.
Sustainability as a strategic pillar
Sustainability has ceased to be merely an option; it has become an essential requirement in destination development. Integrating sustainable practices into planning and management optimizes resources, reduces negative impacts, and strengthens the destination’s identity. In an increasingly demanding market, sustainability is the foundation for building responsible, competitive, and resilient destinations capable of weathering future crises.
In conclusion
A destination’s resilience depends on a comprehensive planning strategy that promotes diversification, sustainability, and efficiency. Only a long-term vision, accompanied by coordinated actions, allows for risk anticipation, adaptation to change, and sustained growth. Investing in conscious strategic planning is undoubtedly the key to ensuring a solid and sustainable tourism future.
Diego Rodriguez Managing Director, Buenos Aires, Argentina
Since 2002, Diego Rodriguez has acted as the Managing Director of the Argentine office, assuming responsibility for the supervision of consulting projects and regional collaboration with other Latin American offices. Connect with Diego on LinkedIn.
