ITB Berlin 2013 mirrors increasingly dynamic trends in the global travel industry
Cape Town Tourism was one of 10,000 exhibitors from 188 countries doing tourism business at the Internationale Tourismus Börse (ITB) Berlin. The ITB Berlin Convention, celebrating its 10th anniversary this year, has grown into the world’s largest travel trade show, featuring leading international speakers and analysts. Cape Town Tourism attended the ITB Convention to bring the newest and most relevant trends and developments back to the local industry in Cape Town.
Here are a few of my observations that are of particular relevance to Cape Town and South Africa.
Over the past 60 years, the tourism sector has grown to become a pillar of the global economy, driven by political co-operation, social change and far-reaching advances in technology, both in communications and infrastructure.
It is clear that the international tourism industry has undergone a profound transformation. The advent of the internet and access to new information technologies has generated a significant change in international tourist patterns that, coupled with the recent economic crisis, has resulted in the restatement of tourism models.
While some of the joy has been taken out of living and travel because of political, environmental, social and financial challenges, travel remains a priority, a desperately needed respite, and in today’s fractured world, people are seeking to “put the joy back into living and travelling.”
However, the era of mindless consumption is over. Most consumers, especially from South Africa’s established tourism markets, now want a simple, sustainable and self-sufficient life. The way that people travel has changed significantly. People hunger for community and want to get involved in causes larger than themselves. They want to engage in more meaningful conversations and relationships. They want to get off the bus, linger and get lost in the hearts and homes of the places they visit – enriching their lives, not with material wealth, but with meaningful experiences.
We’ve seen how global growth has lost momentum across the developing world. Most analysts believe that the global economy (and therefore the tourism industry) will never reach the same growth levels that it experienced during 2007/8.
The USA, for instance, will experience gross-domestic-product growth of 2% to 2.5% for the foreseeable future, compared to growth of more than 3% in the past. And even China, the global economic power that it is, has slowed. Instead of GDP in excess of 12%, the metric is now below 8%. The monumental shift in the global economy is having a dramatic impact on the travel industry.
There is an increased need for personalisation and consumer-mindedness, with travellers demanding centre stage in the planning and buying of their next trip. Destinations and companies that provide flexibility, personalised information at the touch of a button and people-centred authentic experiences are the ones that will stand out from the crowd during the next two years. There has been a surge in last-minute impulse-driven bookings, shorter stays and more frequent trips closer to home. These trends are forcing the industry to become more flexible, change booking and cancellation policies and invest in digital marketing and communications solutions.
IPK International (a leading global consulting group responsible for the publication of World Travel Monitor® the world’s largest international tourism market study with more than 500 000 participants) anticipates a 3% worldwide growth in tourism for 2013. They also predict a further divided tourism world with a 7% growth in tourism demand in Asia’s emerging markets, moderate growth of 2% for Europe and 0% growth for North America. Social media will gain even more relevance for tourism with 14% of outbound European travellers using it as a source of travel information.
- Europeans are increasingly leaning toward city trips, and took more trips in 2012 than in 2011.
- In terms of last year’s holiday types, Europeans most frequently took sun-and-beach holidays, although growth of just 1% was achieved.
- With the rise of new mega-cities and urban tourism accounting for 80% of the world’s travellers, there was strong growth in city trips, which increased by 13% in 2012.
- Non-Euro countries are booming, with Russia leading the pack (14% growth), while large-source markets are stagnating with France showing no growth and Germany and UK only 1% growth. Crisis countries like Spain, Portugal and Greece are weakening further with negative growth.
- The German travel market remains positive with 329-million domestic and outbound trips in 2012 (+3%) and now accounts for 45% of the entire travel market.
- Mobile saw a dramatic increase during 2012, especially in the travel and tourism industries with 75% of the world's population now having access to a mobile phone. Around 16-million Americans booked trips via mobile in 2012, a 33% increase on the previous year. Adults spend more media time on mobiles than on newspapers and magazines combined.
- While the world’s population is ageing, affecting the future choice of tourism activities and destinations, new world travellers are getting younger. A large percentage of Cape Town’s visitors from our traditional source markets are of the baby-boomer generation (ages 49 - 65) so tourism products and destination offerings need to cater for an ageing key source market while also catering for younger travellers from our growing new source markets.
- As far as new markets are concerned, China is now third on the list of outbound tourism spend and is on pace to rank ahead of the US for the first time in history, with nearly $100-billion in tourism spend. Substantial growth in outbound tourism is expected from Russia and Brazil – currently ranked seventh and ninth respectively in terms of outbound tourism. Helping fuel the emergence of these new players is the value of their respective currencies. During the next five years, emerging world currencies will be trending up while the US dollar and the British pound sterling will post only moderate growth. The Euro, on the other hand, is likely to struggle and could even weaken.
Continuous innovation has to become part of the fundamental DNA of the destinations and tourism companies that will ultimately survive. Companies and destinations constantly have to rethink their strategies, keep innovating through processes, promotion, improved facilities and infrastructure, and by taking some risks in order to gain ground on their competition.
Perhaps the biggest hurdle in the global macroeconomic recovery is consumer confidence. Violence and political unrest has dominated headlines in a number of popular destinations like Egypt, Greece and South Africa – which led to travellers staying away in their droves. Travellers from around the world are much less likely to travel if they lack confidence in the social, political and economic foundations of the destinations they wish to visit. This is significant for South Africa at a time when the country has seen a burst of negative international publicity around violence and labour unrest. In an industry where perceptions are determining factors in travel decision-making, it is important to understand and counter-address economic, political and social stability and its effect on inbound tourism.
I believe that 2013 and 2014 will be years in which tourism (and its affiliate public and private partners) should be hunkering down to put some serious strategy into action in a long-term vision for the decade and beyond. The support of our national, provincial and local governments is pivotal to the success of tourism. However, tourism should not only be concerned with attracting visitors to our shores, but more importantly be recognised and used effectively as a vehicle to improve the lives of the people who live here. Accolades, awards and global recognition mean very little if they come at the expense of our environment, or our residents and their prospects for the future.
Tourism will only weather the storms of global financial, political and environmental uncertainty if it is to appeal to a number of different markets through well-packaged, quality-driven tourism propositions in several source markets, new markets and within our own domestic market.
As a destination South Africa has to be future-fit to ensure our relevance and effectiveness in world that has changed forever. We need to build on our reputation as a destination that is responsible, sustainable and one that offers non-generic, authentic, people-centred experiences.
Importantly, we have to position tourism as a major economic engine and a viable career for inspiring young leaders – the kind of leaders we need to guide us through tumultuous change to a brighter, sustainable future.
Nostalgia is the worst business model. Never waste the opportunity that comes with a crisis.